Reflections on the 2007 PCI Joint Marketing and Underwriting Seminar

PCI’s Annual Joint Marketing and Underwriting Seminar concluded a few weeks ago in San Antonio.  Attended by well over 200 underwriting, marketing, and other insurance business decision makers, the San Antonio conference again proved this annual session to be a powerful and valuable conference for all who attended. 

It was clear from both the session content and the avid interest on the part of the attendees that two key areas of interest to carriers were: the increasingly complex and competitive marketplace; and market demands specifically related to improved assessment and response to catastrophes (especially in regions of coastal exposure).

References to the Baby Boomer generation surfaced in many of the conversations throughout the conference—whether from the challenges associated with retiring insurance professionals, including agents, or as noted by keynote speaker and futurist, Jim Carroll, the influx of retirees into communities more exposed to hurricane, brushfire, and earthquake risks.

Other sessions focused on operational efficiencies including automating the underwriting process and Jim Lucker of Deloitte spoke in depth about the use of predictive models for taking commercial lines underwriting to a more reliable level.  

Not to be overlooked were the sessions focused on attracting and retaining the “right” business as well as optimizing sales, marketing and distribution management.

Since becoming a “location intelligence” professional, I can’t go anywhere without noticing maps and references to location information.  Throughout the conference I was struck by how often discussions turned to location.  Whether it was Jim Carroll mentioning the wave of retirees headed towards risk prone areas, Jim Lucker talking about understanding the distribution of risks as they relate to exposures, to Brian Quinn from Nationwide who spoke of how his company uses census, economic, and psychodemographic data in spatial analyses to understand market potential and identify the quantity and location of target customers.  As important as location has always been to the insurance industry, it seems that location intelligence has taken on increased importance in recent years. 

Another popular discussion topic at the conference was technology, especially web-services and Service Oriented Architecture.  This was particularly noteworthy as this PCI gathering is primarily a business conference, rather than IT-focus (like the PCI Information Technology Conference).  While there were a handful of carrier CIO’s and other high-level technology officers present, it was the business folks talking technology.

The two key observations I made were that: the insurance business folks have become especially tech savvy; and web services and SOA are increasingly the technical enablers allowing our industry to make the advances in operational efficiencies, enhanced underwriting and pricing, real-time portfolio risk management, CRM and delivery of better claims services.  With these too, location intelligence is able to play a key role, seamlessly integrating into the evolving insurance workflows.

Another reoccurring theme throughout the three days in San Antonio was the topic of data quality and the challenge of harnessing the power of the tremendous stores of data that insurance companies have at their fingertips. “If only we could put it to use” was a common complaint.  The old expression “Garbage In Garbage Out” (GIGO) came to mind.  This one fact has always been the bane of any analysis.  Anyone who has ever talked with me long enough to get beyond simple pleasantries has heard me half joke about my belief that “the computer was invented to expedite human error.”  Data quality issues usually result from human error at some point in a process.

Thankfully, when it comes to address and other location data, technology advancements have made the cleansing and validation of data much more efficient and effective. Insurance companies can utilize web services to move these processes forward in the business cycle, allowing them to better leverage their location data stores as an enterprise asset.

Futurist Jim Carroll insights such as “customers today are more likely to take their business elsewhere when they have a dissatisfactory experience…the customer today has and expects so much choice” and the “marketplace is changing so fast during this period of hyper innovation” that it appears the business of insurance has even more challenge and opportunity than it did just a few years ago. 

Mr. Carroll talked too about the fact that insurance companies need to understand that business clients are starting to value processes. Rather than looking at individual components or assets, Jim points out that carriers should understand that the nature of what they are going to be asked to protect will be process: not just individual assets but rather that combination of assets, services, and people that result in a service.

Overall, I left the conference reminded that the insurance industry I joined over 30 years ago is a lot more exciting than some people might think.