Reprinted from the June issue of Insurer Insights
Laura Doddington spearheads the Personal Lines Insurance Consulting and Technology Practice in North America. Her role involves daily collaboration with insurers to enhance performance. She blends technology solutions with consulting services, advocating for a holistic approach to technology integration in business operations. This combination ensures insurers leverage the full benefits of advanced software and strategic consulting.
Meanwhile, Lauren Finnis heads up the Commercial Lines Practice for Insurance Consulting and Technology in North America. Her role mirrors Laura’s but tackles the distinct challenges of commercial insurance, characterized by less homogenous data and diverse coverages.
Lauren’s approach emphasizes breaking down silos between different functions within insurance companies. She fosters collaboration among actuaries, underwriters, distribution specialists, claims strategists, and others to deliver comprehensive solutions. Her practice embodies the cross-functional teamwork she advocates for in her clients’ organizations.
Insurtech Insights caught up with them to find out more.
Tell us about your background and how you arrived at your current positions?
Laura: I’m an actuary by training, originally from the UK, but I’ve spent the last 10 years in North America. I began my career in pricing, leading pricing teams, and quickly realized the importance of how pricing can drive better business results across the entire organization. Over the years, I expanded my skills beyond pricing to various areas including distribution, claims, product management, digital, and marketing.
My passion lies in using data and analytics to transform businesses end to end, improving outcomes for both insurers and customers. I applied these skills extensively on the carrier side, working directly for insurers. Recognizing a broader opportunity, I joined WTW in 2023 to leverage my experience across the entire industry, helping more companies benefit from data-driven insights.
Lauren: While I began my career as a public accountant, I quickly transitioned into insurance and have spent most of my career in relationship management with customers and brokers on the carrier side. My focus has been on using data and analytics to prioritize and guide these relationships in the insurance space. While relationship management often relies on instinct, I believe data and analytics can significantly improve this process.
Throughout my career, I’ve developed customer and broker analytics, designed CRM platforms, and established data-driven relationship management processes. Additionally, I have experience in underwriting and have integrated a team of underwriters into our practice to collaborate closely with actuaries. This cross-functional approach has always been a key element of our strategy, leveraging the combined strengths of different disciplines to drive better outcomes.
P&C and specialty insurance are facing a lot of challenges from multiple areas. What are you both seeing on a day-to-day basis?
Lauren: On the commercial side, the vast product suite often creates challenges, as different lines of business tend to operate in silos. For example, people might think that Directors and Officers insurance can’t possibly share the same processes as Property insurance, adding unnecessary complexity for insurers. Additionally, no insurer has perfectly organized data, largely due to varying processes across product lines and numerous acquisitions over time.
“A major focus has been on better data collection and utilization across all functions, such as actuarial, to support data-driven decisions.”
Lauren Finnis | Head of Commercial Lines, North America, Insurance Consulting and Technology
A major focus has been on better data collection and utilization across all functions, such as actuarial, to support data-driven decisions. We assist carriers with data strategy and readiness assessments because, often, they jump into implementing CRM systems or policy admin systems without first addressing their current data processes, culture, and structure.
Laura: For personal lines, it’s no secret that performance has been poor over the last couple of years, with auto showing signs of improvement while homeowners’ insurance remains tough. The overall landscape has been challenging. However, some insurers have fared better than others, primarily due to their ability to quickly identify trends and respond accordingly. This has allowed certain carriers to outperform others despite the overall poor performance.
We are now at an interesting juncture where many carriers, who had previously “battened down the hatches” to reduce their footprint, are beginning to cautiously expand again. They’re trying to determine the best areas and extent of their expansion.
Another significant trend in the industry is the high ambition for analytics. While companies have invested in data science, they’re struggling to integrate these capabilities into their business operations effectively, meaning the potential value of analytics is not yet being fully realized.
How can technology help address these challenges that we are seeing? Are we on track regarding solutions that are going to help customers in the near future?
Lauren: I believe we’re on track, with solutions we’re implementing daily that address both current and future needs. We frequently discuss policy admin system (PAS) journeys with insurers since PAS is often a major investment.
The technology landscape has shifted towards ecosystems and modular approaches—using multiple interlocking platforms that excel at specific tasks instead of one monolithic system. We help carriers externalize rating from their PAS, which improves speed-to-market and keeps rate and rules changes in the hands of the actuaries rather than relying on IT to re-code everything.
This is crucial in the admitted U.S. commercial lines space, where insurers have struggled to keep up with rate need. Advisory bodies like ISO have introduced significant rate change plans recently, and decoupling adoption of the new plans from the larger PAS roadmap creates substantial savings for carriers.
“One major challenge for insurers is spotting trends quickly and having the right lead indicators. Technology can help identify trends faster, make rapid decisions, and deploy those decisions in real-time. ”
Laura Doddington | Head of Personal Lines, North America, Insurance Consulting and Technology
For example, WTW’s Radar technology allows insurers to analyze data, identify trends, make decisions, and implement them immediately or as quickly as regulations allow. This capability is a game-changer because the insurers who can respond fastest to trends are the ones who will succeed in today’s challenging market.
Gen AI is a big buzzword right now. What solutions are front and centre for both of you in relation to data analytics?
Laura: I think we’re starting to see real use cases for generative AI (gen AI) across the insurance industry. For example, it’s being used to manage complex unstructured data, or to create smart call centre scripts. However, we’re still far from a point where we can let gen AI operate independently without human oversight.
There’s significant risk involved, and the technology isn’t quite there yet. It’s crucial to continue investing in this technology now rather than playing catch-up in a few years. Alongside this, we need to build the right infrastructure to support gen AI—good data, governance, organizational structures, fairness policies, and monitoring practices.
“Many organizations are only beginning to see the benefits of machine learning, which can provide immediate value and quick wins. It’s important not to overlook these opportunities in favour of newer technology.”
Laura Doddington | Head of Personal Lines, North America, Insurance Consulting and Technology
While it’s tempting to focus solely on gen AI, traditional AI, like machine learning, still holds huge untapped potential. Many organizations are only beginning to see the benefits of machine learning, which can provide immediate value and quick wins. It’s important not to overlook these opportunities in favour of newer technology. It will also be increasingly important to focus on transparency and fairness, as this is becoming an area of regulatory scrutiny.
“Bias is a significant issue in both traditional and generative AI, and it’s not about finding point solutions. It’s about creating a culture that assesses the risk of bias at every step. ”
Lauren Finnis | Head of Commercial Lines, North America, Insurance Consulting and Technology
For commercial lines, we’re seeing advancements like claims triage models using natural language processing to handle unstructured data, such as legal briefs or claims notes, and identify cases that need early intervention.
We’re also seeing underwriting applications where carriers are testing tools leveraging large language models for underwriting guidelines. This makes it easier to answer questions about authority or approach. In product development, gen AI is being used for coverage comparison, scanning filings, and competitive research. The goal is to use gen AI to assist humans, not replace them. For example, in pilots for coverage comparison, we’re not looking for the machine to make recommendations but to organize information so humans can make better-informed decisions.
Let’s talk about WTW’s 2024 Advanced Analytics Survey. What sort of things has the research thrown up that will particularly affect both the areas that you work in?
Laura: We regularly conduct surveys on insurers across North America to gauge their use of analytics. The latest survey reveals that while insurers have significant ambitions for analytics, they’re not meeting those ambitions. IT bottlenecks are cited as the number one impediment. Adding more analysts and data scientists isn’t sufficient — insurers need to invest in underlying technology solutions for success.
Lauren: Another key finding is that analytics predominantly remain within pricing and underwriting, with untapped potential in other areas like claims, marketing, and distribution. While changing prices can be challenging due to regulation, there’s immense value in using analytics across the board. The ambition exists, but bringing analytics into other areas poses challenges.
Insurance is inherently data-driven, but legacy systems and challenges in data collection hinder empowerment in other business areas. Complex analytical techniques require people who understand both the tools and the insurance industry. However, there’s a shortage of professionals who possess this dual expertise. Companies need to prioritize embedding analytical practitioners into the business to leverage data effectively.
Bringing together data scientists and business professionals for collaboration is crucial. Without mechanisms for collaboration, extracting value from analytics becomes challenging. Bridging the gap between these two groups is essential for maximizing the potential of analytics across various functions within insurance companies.
What’s the solution? How do you get them to talk to each other to move forward?
Lauren: Early and intentional training is crucial for developing a broad foundation and mindset conducive to innovation. Prioritizing rotation and lateral movement in the early years allows individuals to gain diverse experiences and perspectives, fostering a culture of continuous improvement.
Creating cross-functional teams and fostering open communication through structural adjustments or committees is essential for facilitating collaboration and problem-solving across departments.
Laura: Cross-functional collaboration is key to building effective solutions. Business leaders must actively integrate data scientists and analysts into their teams to ensure alignment between technical solutions and business objectives. Technology plays a vital role in bridging the gap between technical expertise and business understanding. Tools that translate technical outputs into actionable insights for business leaders facilitate effective communication and decision-making.
As leaders in this space, what issues would you flag up to advise insurers?
Lauren: In the commercial line space, it’s crucial to shift the mindset that certain coverages are too specialized for widespread changes seen in other industries, like digitization. Despite perceived complexities, I’m confident that by breaking transformations into manageable steps, we can adapt successfully. We need to shed the notion that our business is too specialized for modernization and embrace new possibilities.
Laura: From our survey, three key recommendations emerged. Firstly, addressing data and systems bottlenecks is paramount. Insurers must invest in systems that enable sophisticated analytics deployment. Secondly, strategic organizational alignment around data and analytics is crucial. This involves embedding experts within the organization and prioritizing initiatives thoughtfully. Lastly, we advocate for the expansion of analytics beyond traditional areas. Directing attention towards overlooked opportunities can unlock significant benefits for insurers. These are three actionable steps insurers should prioritize now.
Which key changes in Commercial and Personal Lines P&C would you like to see happening soon in general that would help to drive the industry forward?
Laura: Firstly, natural catastrophes are escalating, demanding greater industry attention. Beyond pricing and underwriting adjustments, collaboration with governments and stakeholders is imperative to combat these challenges for both the industry and society’s benefit.
Another critical aspect is diversity and inclusion. While progress has been made, there’s still much ground to cover. Diverse teams strengthen our industry, and so we must continuously evaluate our leadership diversity and ensure inclusivity within our organizations.
Lauren: I echo Laura’s sentiments on diversity and inclusion, especially in the commercial line space with its multi-faceted market dynamics involving insureds, brokers, and carriers. We need to rethink traditional approaches and return to our objectives. Personally, I love golf outings, but the core reason they are valuable in business is that the captive time in a less formal setting helps to foster connections. There are other activities that can achieve these same outcomes, and people shouldn’t feel like they need to learn golf to succeed in our industry.
Moreover, as we face talent shortages and shifting workforce priorities, we must prioritize sustainability and flexibility to attract the next generation. Emphasizing insurance’s role in mitigating societal risks is crucial, reminding us of its inherent value in stabilizing and safeguarding communities amidst uncertainties. Ultimately, insurance addresses risks at the core, shaping how societies navigate uncertainties.
