Data – the buzzword of the decade. The world understands its value, but the insurance industry has not only lagged behind in exploiting data, it has also created huge inefficiencies in how it is handled and exchanged. This situation needs urgent attention, but no single company is going to solve this problem – it will take collaboration.
The data that drives risk analytics has proven particularly tricky to handle and leverage. Right now, the standards the industry uses are decades-old property cat schemas – venerable workhorses that took the industry from an almost total lack of exposure data to a relatively high degree of understanding. They transformed how property cat risk is transacted, priced, and managed. But these old formats have run their course and if we want to gain meaningful efficiency, improve profitability, and pursue new opportunities beyond property cat. The industry needs an improved standard.
Fortunately, an intriguing possibility exists. Over the past several years, RMS has researched and built a comprehensive and flexible new data container called a Risk Data Object. This data specification can handle any type of model, any line of business, and any financial terms and conditions.Continue reading