Loss ratios are like testicles<\/h3>\n
Case in point: an executive at one of the largest insurers told me that \u201cother\u201d is their most common cause for a claim. People (unlike bots) lazily tick that catch-all-box, rendering their data useless.<\/p>\n
Tons of useful data are lost too: often they\u2019re not machine readable; other times, it\u2019s the humans who can\u2019t read them (swallowed by a system whose architect retired in the 90s).<\/p>\n
The exec went on to say their \u2018loss ratio\u2019 was 54% (in other words, if you paid 85 \u20ac in premiums, they\u2019d spend\u200a, on average\u200a, 46 \u20ac on your claims). Among insurers, this passes for small talk, so he was a little taken aback when I countered that his customers have\u200a, \u200aon average, one testicle. I explained that knowing your customer \u2018on average\u2019 offers little insight. Worse, under the guise of a \u2018statistical fact,’ a generalized average often paints a misleading picture.<\/p>\n
A loss ratio\u200a – \u200athe gold-standard insurance metric\u200a – is no substitute for deep, textured and rich data. The very kind insurance companies are ill-equipped to collect.<\/p>\n
Digital divination<\/h3>\n
Some insurance buyers take time to understand their coverage, others don\u2019t. Is that predictive? What do our tech choices say about our risk profile?<\/p>\n
There are endless such questions, and in a fully digital lifecycle,\u00a0they all get answered<\/em>. Unlike traditional insurers, tech companies won\u2019t make do with a global \u2018loss ratio.\u2019 They will monitor the loss ratio per device, browser, and advertising campaign. They will compare the loss ratio of people who press hard on the screen, to those who don\u2019t; the loss ratio of those who bought insurance from home, to those who bought it on their commute; those who bought it at 4pm, to those who bought it at 2am. Not only will the machine answer all these questions, it will answer a myriad more we didn\u2019t know to ask.<\/p>\n Tech companies gather\u00a0thousands of times<\/em>\u00a0more data than traditional insurers, producing nuanced profiles of their customers, and remarkably predictive insights.<\/p>\n\t![\"\"](\"\/blog\/wp-content\/uploads\/2018\/01\/Untitled-1.jpg\")
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