The risk manager of tomorrow: making data work for you

Data has always been a key tool for risk managers – and for their broker and underwriter partners. We are entering now a new era for data, which could prove a game-changer for the profession. The Industrial Internet of Things, whereby interconnected devices are used to enhance manufacturing processes, is transforming the way companies work, resulting in enhanced efficiencies and providing them with stacks of powerful data. And the ability to harness that data, to analyse it and unlock its potential will transform the way risk managers are able to perform their jobs.

AI AND DATA

Artificial intelligence is becoming part of day-to-day commercial life. And there are many ways in which AI is not just helping businesses to work more effectively but also to begin to manage their risks in a different way. A concrete example is our partnership with Parsyl, a platform that helps shippers, their clients, and insurers to understand the quality of the conditions that sensitive goods are kept in.

Sensors placed alongside cargo provide insights into the context of goods throughout the supply chain. The data that these sensors provide enables our engineers to make practical risk management recommendations to avoid or minimise losses.

It is the combination of data mining, that would be practically impossible for a human to achieve, with human powers of analysis and understanding that make innovations like this such game-changers for risk management.

It is possible to imagine how this could evolve to make those goods that are currently tricky to insure much more insurable.

Take vaccines, for example. Currently, when vaccines are in transit, it is possible to insure them – up to a certain point. So sensitive are vaccines to changes in conditions, and so important is it that they not be tampered with in any way, underwriters need absolute clarity of information about how the vaccines are stored throughout their journey.

Sophisticated sensors, data analysis and mining and risk engineering expertise could give risk managers a much better understanding about what happens to vaccines as they are transported. Not only does this have the very human benefit of getting more vaccines to those that need them, it also will reduce losses and make insuring vaccines a much more viable proposition.

RISK ENGINEERING

There are many other ways in which we believe that AI will empower risk managers and equip them with more usable, meaningful data. Take for example, property risks. The use of advanced technology should enable insurance companies to provide 24/7 risk engineering and loss prevention services to customers.

A proof of concept that we have been involved in is t o test placing a “black box” in highly fire sensitive areas of a customer’s premises.

This black box pulls data to populate a risk dashboard which gives constant updates meaning that maintenance can be performed as and when it becomes apparent that it is needed – drastically reducing the risk of loss.

Another area in which data analytics and AI will help risk managers is in industries where workers have stringent safety requirements. Wearable technology can feedback information to alert risk engineers and risk managers if there is potential hazard before something serious occurs.

THE HUMAN TOUCH

There are many ways in which AI and data are impacting our lives. But it is important to remember that they will never replace some human skills. Rather, we humans need to harness the power of these new technologies to be able to do our jobs better.

Risk managers have a hugely important role to play in companies of all types. These new technologies will, I believe, help them to push the profession of risk management into a new era.