MSM Risk Management is today warning that the insurance industry urgently needs to address resource allocation to boost profits.

However, effective resource allocation is not possible without good data systems, as MSM Risk Management managing director Thomas Coles explains, “After the disastrously expensive year the insurance industry has had, it is vital that it addresses the factors that are within its control in order to boost its operational effectiveness.

“Although the industry cannot control factors such as weather which raise claims, implementing more effective ways of gathering, analysing, storing and sharing risk data would be a simple aid to trend analysis accuracy. From this trend analysis insurers are able to risk engineer their portfolio of products and deploy resource effectively, as they are not tied up with risk data management and can instead use their skills more efficiently by formulating products.

According to MSM, good data governance is key. “Insurers using effective systems such as a single modern database to manage their risk data are also able to remove time-consuming process duplication, and reduce the possibility of inaccuracies being introduced into the data, as it is transferred between multiple disparate databases, Coles says. “This added efficiency and accuracy allows insurers to focus on their core business, benefiting from a deeper knowledge of their insured risk profile, which in turn will protect their profit margins and deliver value to clients.”

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