Reinsurer Munich Re looks for data analytics and artificial intelligence as key tools to open up new possibilities for managing and covering risk, and for supporting insurers across the entire value chain. “At Munich Re, our goal is to pioneer digital solutions for the insurance industry,” said Doris Höpke, Member of the Board of Management “So we have been investing heavily in data analytics and artificial intelligence, in order to support our clients with innovative methods and new products,” she said.
The reinsurer stated that it is focused on combining primary insurers’ portfolio data with external public sources, such as site geography, building construction, weather, or socio-economic status.
Through the application of machine-learning principles, the company looks to discover hidden loss drivers and respond with loss-prevention measures or by adjusting pricing.
“This means faster claims estimates and handling, and better pricing as a result of improved accuracy in risk assessment,” Hopke continued. “Not to mention better loss prevention in the first place.”
In the area of motor insurance, for example, Munich Re helps cedants to manage their portfolios using its automated tool, ‘The Box’, which relies machine learning to predict expected damage. By adding external data to the mix, the loss estimates increase further in accuracy and loss ratios can by measurably lowered, the company claims.
