Risk & Analytics

Looking Backward to See Forward

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What a crisp fall day to find oneself on the road astride a bicycle yesterday. In the North East of the US, there was just a whisper of fall in the wind, and still a warm burning sun. We are lucky where I live as we have a county sponsored ‘Bicycle Sunday’ where car traffic is shut down to give a safe two-lane highway to two-wheeled vehicles.

It was sublime conditions. It reminded me we are only a few weeks away from walk and bike to school day, so it seems a good time to bring up the topic of safety.

Cyclists have been having a tougher time out on the road for a variety of reasons. Besides the statistic of 8.9 percent increase in fatalities, there is also the informal statistic that when I started seriously riding, I didn’t know many people who had an impact with a car. Now it’s getting hard to find a fellow cyclist who hasn’t had a direct accident involving a car or truck. While I’m personally sure distracted driving is part of the problem, there is also the fact that there are simply more cars and more bicycles out on the road. In fact, cycling’s popularity has caused it to be dubbed by some as “the new golf,” as a business relationship sport. With this renewed popularity, cycling’s future on US roads will look different than it’s past. Therefore, as a risk pool, and individually speaking, risk simply goes up with every ride, and I know it. I wonder if insurance is accounting for this risk in any way?

This is not just true of cycling. There are other risks that are changing, like fire risk in parts of the US. The future is clearly not emulating the past in this case, too. Yet the way risk is assessed on individuals in P&C is not as dynamic a model or as predictive of the future.

With a world that is changing drastically on so many fronts, I wonder how long it will be that insurance leans primarily on historical data as an assessment of future risk. When it seems so evident that the future, with all its benefits, potential and – yes, risks — may not resemble the past in any way we might imagine. Therefore, insurance, like cycling, needs to make assessments based more on the road ahead than on what is left on the road behind.

One potential source of that data may be from smart phones and cars, data which could provide deeper analytics insights that could let me cycle even safer, through location and tracking that can calculate roads, traffic patterns and times of day that are most dangerous to recreational cycling.

Insurance can be a leader in gathering and sharing this type of data and helping protect drivers and cyclists – both of which are their insured — from accidents neither of them want to have. I’m hoping to hear how analytics might make us all safer at Insight2015 in a month from now, so my eyes are on the road ahead.

Program Director, Cross-Portfolio Services Strategy

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