The world around us is changing rapidly, making it even more important to always stay up-to-date as an insurer. Partly for this reason, we at Veneficus regularly visit interesting conferences and workshops that have a refreshing look at the current market. This time it was my turn and I attended the first Insurance Data Science Conference at the Cass Business School in London.
The London conference brings together academics and professionals from the field to share experiences with data in the world of insurance and to discuss new technologies and applications. This resulted in a day full of new inspiration, insights and impressions. It surprised me that data science is already widely used by insurance companies. While the market is often seen as fairly conservative. For example, insurer Generali uses a forecasting model to determine the impact of fraud on operational loss and telematics data can better predict the claim behavior of policyholders than data based on their postal code and age.
Simplicity is key
What struck me the most is the upcoming trend 'Less is More'. Simple data models and analytical methods are winning more often from complex matter. It is important to note that it is not influencing the explanation power too much, but the outcome of the models can be better explained to the boardroom or customers. The problem with complex models and methods is that they are often difficult to explain. As a result, there is a risk that they will be seen as black boxes and are eventually not used.
A good development in my opinion. I believe that data scientist should always look for a good trade-off between the quality of the model and its interpretability. I also predict that this trend will continue in the future: people want to use data science, but also want to stay in control. And then it must be understandable.
At Veneficus we always ensure that we can explain our clients in detail what happens in our models and why we give specific advice. In addition, Veneficus always strives for a practical solution with added value for our client. 'Less is More' is therefore an on-going trend within our company!