Today, we interview Roger Ferrandis, Chief Operations Officer & Co-founder of Wenalyze. With more than 8 years of experience, he shared with us his vision of the Insurance Sector and its future, and the power of Open Data. Discover it now!
Could you tell us about your experience in the Insurance Sector?
I started in the insurance industry 8 years ago. At my first job, I was a community manager for an insurance e-commerce platform called Aimfri. It was like an Amazon for insurance sector, where the sellers were agents and brokers.
After that experience, I became a consultant for innovation and digital areas. I was elaborating reports for Innovación Aseguradora. This firm ranks every Spanish insurer by assessing their digital presence based on the user experience they offer on their websites, apps, social media, sales processes, etc.
This experience helped me gain a good understanding of some of the insurance industry problems. I then understood that some of the problems insurers face have a global scale. Among some colleagues from these past experiences, we saw that the data accuracy insurers had about their customers was very low when compared to other industries. We then started building Wenalyze, a solution that collects open data to enable commercial insurers to improve their data quality while automating processes.
How does the post-pandemic scenario look like? What changes have you noticed in the Insurance Sector in the last two years?
In my opinion, it has helped to speed up a cultural change. Today, almost every business is used to virtual meetings, which means we can save time and money in traveling. Getting used to remote work has also allowed some insurers to open themselves to partner up with start-ups from anywhere and therefore access a wider pool of innovative solutions.
From Wenalyze’s perspective, it opened huge opportunities. During these two years, many businesses have shut down, fired employees, changed their products, started selling online, or delivered. In sum, almost every business had a relevant change that affected their risk. This has a huge impact on commercial insurers, who cannot predict with such accuracy their gains and losses anymore. While updating information of a whole portfolio would be a very hard task to do manually, they have seen us as the perfect partner to properly assess the risk of their clients quickly and accurately.
What challenges and opportunities for Insurance Carriers do you see in the following years?
One of the main challenges carriers are facing is giving an answer to the current world situation. Wars, pandemic, and climate change are causing unpredictable losses they must cover on a global scale. I can see carriers moving towards ESG initiatives. However, it is still unclear what is their maximum potential on this topic.
Hopefully, in the future, carriers will compensate clients who are contaminating less to incentivize everyone to adopt net-zero policies.
In the space of startups and innovation, the main challenge in my opinion is cultural. Changing the way someone has worked for the last 50 years is not an easy task to do. Especially when that business has been profitable. It is hard to tell someone who’s been doing great to change something and assume a new risk. And insurers are logically the most risk-averse type of corporation you can meet.
However, the opportunities are still huge. The under-insurance gap we can see in every country is enormous. This means that every insurer has a great opportunity to increase margins and grow. We are seeing solutions responding to this issue, for example, allowing carriers to create micro-insurance products in a simple and fast way. Embedded insurance enables carriers to sell in alternative channels, or solutions that offer insurance on demand (pay as you use).
On our side, I can see the potential of performing a better segmentation. When carriers offer to every client the same premium and coverage level, it means they are losing many opportunities to adjust risk levels and increase margins. That is why data analytics solutions are more demanded than ever before. Analyzing data in a way we never used it before, allows us to have a better customer knowledge, and therefore, a more tailored way to serve them.
When you talk with an insurer, what is the most common concern they have about Open Data technologies?
Many insurers haven’t discovered the power of Open Data. The biggest concern they have, is whether the data is reliable. Since everyone can post anything on the internet it is natural to assume that the data we collect from it could also be faked or manipulated.
Our challenge here is to demonstrate the accuracy, validity, and power of Open Data we collect. Most insurers ask us to rate the reliability of the data we deliver to them. While we believe it is convenient to have a standard to guarantee data quality levels, we also do not find the same type of control in their current data collection systems. Therefore, we just need very basic data points to find huge rates of data quality improvement.
In your opinion, what is the future of Open Data?
Both, technology and open data are already available. Implementing them successfully is what will shape the future. The way corporates use open data will be different depending on the type of data and client. Data can be aggregated or statistical, or it can be related to one specific client.
When their clients are individuals, open data should only be used when having their explicit consent. When their clients are businesses, it is recommended to use open data to tailor products or understand better their potential risks.
The latest stage I can imagine is every corporate using automated decision systems based on Open Data with minor human supervision. Every industry will take its own time to reach this stage, but I am sure all corporates will get there eventually.
Why would you recommend insurers the use of Open Data?
Insurers built their businesses around data. They need data to decide what are the coverages and the premium levels they offer their clients. They also need data to decide under what conditions they will renew their customer policies. Every decision made by an insurer is based on the power of data. Therefore, it all starts with a collecting data process.
Most insurers are currently collecting their data in a manual way. Either their clients answer forms, or their agents fill them up for them. These forms are usually extensive, and the process is so manual that we usually find mistakes, typos, different formats, or just simple laziness that moved them to answer anything on the form.
At the same time, insurers collect data during the submission process and renew their policies every year without checking again. Some insurers are making their decisions based on data they collected 5 years ago. As you can imagine, almost nobody has the same they had 5 years ago. For these reasons, we have found that 60% of clients have data inaccuracies.
Open Data helps solve many of these problems since it allows us to automate data collection processes. Data available on the Internet also helps to have one of the most updated versions of the risk of those clients. Businesses are always sharing what they are doing on their website and on social media, and that helps us. I would definitely recommend insurers who want to be more efficient and make better decisions to contact us and discover the power of Open Data