Verisk CEO on key challenges impacting the insurance market

As an experienced snowshoer, the daunting sight of steep slopes is familiar to Verisk CEO and President Lee Shovel (pictured). When you go out on a snowshoeing trek, and you go up the slope and you’re looking down, he said, you wonder, ‘How will I get there?‘The answer is simple but effective – it’s all about taking one step at a time and avoiding getting stuck in the destination.

It’s only when you look back that you realize how far you’ve come, he said, and that’s what happened when he reflected on Verisk’s stated mission to become “a better strategic partner for the global insurance industry.” Let’s check the progress. Shevell, who was appointed CEO in May 2022, took on the additional duties of President in December and highlighted how much he has enjoyed getting to know the business, its leaders and the initiatives being taken to support its mission Is.

“When I joined,” he said, “one of my visions – and the one I think I was probably most concerned about – was that we were a very good product organization, but better served by partnering with the industry. At, we have scope to become a better customer organization and connect at the senior customer level to understand their needs and the needs of the broader industry. As an organization, we needed to drive that dialogue and I knew I “There is a need to lead – to reach out and start those new conversations.”

Understanding what insurance companies want from their partners

Verisk was clear from the beginning about the opportunity to provide open and candid feedback to its strategic clients, using multiple channels, including CEO and CIO roundtables and individual client meetings. A pleasant surprise, he said, was how clearly customers outlined their desire to have strategic conversations with Verisk and to use the company’s resources to support their growing data, analytical and technology needs.

Insurance customers are looking for strategic partners that have the scale and expertise to tie these needs together and integrate them into their processes and procedures, he said. And they’re also eager to understand how their peers in the market are leading or taking advantage of technology and data change – and what they can learn from that. This is allowing Verisk to take on more of a “consultant” role at a strategic level, which is, in turn, opening up new ideas about how the firm can better serve the industry.

“In one of our conversations there was some frustration around legacy issues, which was important for us to hear and understand,” he said. “But during the second conversation, the customer requested that we talk to them about what we were doing for them, but also what we were doing for others that might be valuable to them.

“That was an incredibly impactful conversation for us because instead of ideas being pushed from the bottom up, it was a top-down mandate that I think enabled us to better serve the customer. And we’re going to do a six-month follow-up to make sure that we’re meeting our set expectations and ensuring regular interactions with our customers at a strategic and enterprise-wide level.

Challenges and opportunities facing the market

From those conversations, Verisk has gained a horizon view of the challenges and opportunities facing its strategic partners at this time and Shevell said there is no shortage of any of them.

The biggest concern is shared by many, he said, and it focuses on how inflation is affecting the insurance industry.

When discussing inflation, he said, it is easy to focus on first-order inflationary effects, but what is becoming clearer is how inflation is impacting supply chains in terms of disruptions and shortages. This, in turn, is introducing a level of delay in repairing the units which involves greater costs. The impact of these knock-on costs and disruptions needs to be understood at a local and detailed level as supply chain concerns are on the minds of customers, certainly from an ongoing risk loss and claims perspective, but also, on the underwriting side, it How this happens can be included in pricing.

There is also a strong regulatory challenge around it, he said, especially in the US where different states have different regimes and approaches to pricing. For example, California, by law, does not allow insurers to base pricing on any forward-looking assumptions, which creates significant challenges in a market where costs are changing so rapidly. Therefore, helping clients navigate that regulatory landscape to make the right underwriting and pricing decisions in their local markets is high on Verisk’s agenda.

“The third challenge is that all of our customers struggle to some degree with a data and technology environment that continues to change rapidly as we deploy much more cloud-intensive data infrastructure with an increasing number of datasets and analytical approaches ,” They said. “In almost all of our conversations, the impact of generative AI is a very active topic, as are how we can work with industry to safely explore the application of that technology across different dimensions of their businesses.”

The changing face of data and technology

Interestingly, he said, it is also this third shared challenge around technology and data where a real wealth of opportunities open to the market can be found.

Shevell said there has been a “generational change” in technology leadership at insurance companies. Even just 10 years ago, there was some concern and skepticism about the security risks associated with moving to a more cloud-oriented environment. But there is now a broad industry-level acceptance that, while cloud-based structures must maintain the highest possible security profile, they are very beneficial from an economic, analytical and operational perspective.

“Cloud-based infrastructures provide an opportunity for the industry to better price and manage their businesses using broader, more current and more dynamically managed datasets,” he said. “I think it’s also opened up new forms of insurance, the most immediate example being usage-based insurance, particularly on the motor side, where, as we’ve collected more data about driving behaviour, underwriters are changing pricing structures. “We are becoming more comfortable with developing usage-based policies.”

For Chevel and his team, helping clients navigate the challenges and take advantage of the opportunities facing the insurance industry at this time is what makes Verisk’s position in the market so exciting. Going back to the snowshoeing analogy, he said he looks back at what the business has accomplished and thinks, “Wow, did we really do all that?”

“We’ve come a long way,” he said. “But I don’t think you get there by taking giant leaps, but by making steady progress toward your goals. We’ve done a good job of outlining our team’s goals, and then everyone individually expresses their work toward achieving them.

“I think we’ve made great strides in realigning our purpose and putting the pieces into place. What I look forward to now is that we will be able to continue the great work we have done with customers and accelerate our efforts to help them take advantage of the opportunities we see in the market.”

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