Munich Re: faster claims estimates, improved accuracy in risk assessment and better loss prevention thanks to data analytics and AI

MUNICH, 22-Oct-2019 — /EuropaWire/ — Munich Re is launching a number of digital solutions aimed at making claims estimates faster, improving the accuracy in risk assessment and better loss prevention. The group is investing heavily in data analytics and artificial intelligence (AI), in order to support its clients with innovative methods and new products.

In general artificial intelligence and data analytics open up new possibilities for managing and covering risk. Experts at Munich Re combine primary insurers’ portfolio data with external, public sources, for example about site geography, building construction, weather or socio-economic status. Machine-learning principles are then applied to discover hidden loss drivers and respond accordingly, for instance by introducing loss-prevention measures or adjusting pricing.

Commenting on Munich Re’s digital solutions, Doris Höpke, Member of the Board of Management, said:

Doris Höpke, Member of Munich Re Board of Management

“At Munich Re, our goal is to pioneer digital solutions for the insurance industry. So we have been investing heavily in data analytics and artificial intelligence, in order to support our clients with innovative methods and new products. This means faster claims estimates and handling, and better pricing as a result of improved accuracy in risk assessment. Not to mention better loss prevention in the first place.”

Yet another example is “The Box” from the motor insurance sector, which supports cedants in managing their portfolios, by relying on machine learning (ML) to precisely predict expected damage. If then external data is put into the mix, such as weather conditions, accident statistics or socio-economic information, the loss estimates are becoming even more accurate and the loss ratios can be measurably lowered. “The Box” is entirely automated helping primary insurers to price more efficiently while bringing the costs significantly down.

In the data analytics, Munich Re’s initiative named “AQUALYTIX” is applied to water-mains damage. Over the past decade, more than half of all losses in traditional residential-building insurance is coming from water-mains damage. This represent a major problem for which no satisfactory solution has yet been found. Just like in the case with “The Box”, experts at Munich Re again mix the primary insurer’s portfolio data with external sources to gain a clearer picture of the situation. By relying on the machine learning, they can identify the risk drivers for individual buildings, and predict the losses for the coming year accordingly. In this way, primary insurers improve their portfolio management and and as a result their loss ratios as well.

Big data and the new technologies that process the large amounts of data are revolutionising the value chains across many industries – including in insurance. In order to keep an eye on the coming changes to the overall risk environment, Munich Re has launched its TechTrend Radar back in 2015, and has been updating it every year since. It provides a broad perspective on important tech trends and how they will apply to the insurance industry.

Media contacts:

Group Media Relations
Jörg Allgäuer
Tel.: +49 89 3891-8202
Mobile: +49 171 8384838
jallgaeuer@munichre.com

Media Relations North America
Jodi Dorman
Tel.: +1 609 243-4533
Mobil: +1 908 391-2427
jdorman@munichreamerica.com

Media Relations Asia-Pacific
Faith Thoms
Tel.: +65 63180762
Mobil: +65 83390125
fthoms@munichre.com

SOURCE: Munich Re

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