Rajesh Narayan, VP of Product & Underwriting at ValueMomentum

Insurers can be competitive if they can be agile and this is about business agility. So in some ways the competitiveness is determined by the way you can respond to market conditions. The way you respond to market conditions is determined by the technology. The technology architecture determines how well that technology can play a role.

But in a large part if you also think about competitiveness it is regulator dependent and within that you can play a role in terms of some of the risk mitigation elements. So an underwriter for example can be looking at an underwriting workbench and capturing all the risk related information about a customer or an industrial firm or whatever they are underwriting at that point and bring all those data pieces together in front of them. If a new data source is available out there and the market conditions allow them to use that then all of a sudden they have that agility to bring that in quicker.

You can look at how do I protect some of these claim from happening. So you could have a device which looks at short circuits in a home and detects any issues, circuit breaks etc ahead of time or calls out high voltage situations. Or in commercial lines we’ve heard about grease buildup and there are sensors which can detect that. So grease buildup sensors again can be leveraged to reduce the possible losses which emanate from a particular insured company or individual. And what that means is that as you stay competitive because you now reduced your loss ratio.

Catastrophic risk can throw a wrench in this right because you can get a huge hurricane or a tornado or wildfire — any of these perils which can impact your profitability all of a sudden. And these are other ways to kind of look at your book of business closely through CAT modeling through exposure analysis and make sure that you’re not going to adversely get hit. You have a sufficiently diversified portfolio. You are not accumulating your exposure in any one segment or any one location. And those are other ways to stay profitable.