Navigating Data Challenges to Optimize the Commercial Insurance Renewal Process - Veridion
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Navigating Data Challenges in Commercial Insurance and Optimizing the Renewals Process

Subscribe now and take the first step towards reducing churn and enhancing customer experience in Commercial Insurance at Renewal time.

The commercial insurance renewal process,

The commercial insurance renewal process,

is a critical time for both insurers and business customers, where accurate and up-to-date data is essential to ensure appropriate coverage and risk management. The goal of this report is to highlight the huge importance of decision-grade data to elevate operational efficiency, streamline decision-making, and enhance customer satisfaction during renewals.

A) Addressing Data Challenges for Insurers and Business Customers
  • Key Data Challenges Faced by Insurers during the Renewal Process
  • Implications for Business Customers
  • Analysis of Peak Renewal Periods and Churn Rates

B) Annual Business Data Dynamics and Their Impact on Commercial Insurance
  • Key Business Data that can change during a year and Associated Risks
  • Case Study: Overlooking an IT Company's Relocation

C) The Risks of Inaccurate Data in Insurance Renewal Processes

D) Improving the due diligence in renewal – Enable better risk monitoring with Veridion
  • API integration with third-party data sources for risk assessment
  • 7 Key Use Cases of Veridion’s decision-grade data in Commercial Insurance

Data challenges

can affect the efficiency and effectiveness of renewal strategies for insurers and create a time-intensive burden for business customers.

Our research indicates that an average of 45% of insurers’ commercial customers have data inaccuracies in critical areas, such as business activities and addresses.

However, these data challenges are not only impacting the insurers’ strategies but are also correlated with heightened churn rates.

The rise in churn

can be attributed to the compounded pressures of managing high volumes of renewals, coupled with the inherent inefficiencies of current data management practices.

Typical commercial insurance renewals happen in January or in June to July and the process typically starts 3 months before the renewal date. This is why March, April, and October are the busiest months and they coincide with significant fluctuations in renewals and churn rates. During these months, the volume of renewals consumes substantial resources, which during peak periods leads to a heightened risk of data-related errors and inefficiencies.

“The underwriter of the future is going to be much more data and analytic driven than they are even today. You see that happening right in front of us in the industry. And so, it’s going to be a much more tech-driven role as we move forward” – Kirstin Marr, President, Insurity Valen Analytics.

To effectively run the renewal process for a business customer, certain types of data sets are particularly valuable. This data provides a detailed understanding of the customer’s business operations, risks, and financial health.

Let’s analyze what the required data sets include and the risks of having inaccurate information:

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Business and Legal Information (Names, Year Founded, Industry Category)

  • Misidentification and Legal Risks: Inaccurate names, company types, and industry categories can lead to legal disputes and non-compliance with regulatory requirements.
  • Risk Assessment and Premium Miscalculation: Incorrect information in these categories can result in misaligned risk assessments and premium calculation errors.
  • Challenges in Claims Processing and Policy Renewal: Discrepancies can complicate claims processing and renewal processes.
  • Reputational and Fraud Risks: Consistency in the business name, type, and industry category across legal documents and public-facing platforms is crucial for brand recognition and trust. Discrepancies can lead to confusion among customers and stakeholders, damaging the business’s credibility.
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Financial and Operational Metrics (Revenue Estimates, Employee Count) 

  • Premium Miscalculation and Compliance Risks: Inaccurate financial and operational metrics can lead to incorrect premium calculations and compliance issues.
  • Coverage Adequacy Issues: Misjudged employee count or revenue estimates can result in inadequate or excessive insurance coverage.
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Location and Contact Information (Location Data, Phone Numbers and Email Addresses) 

  • Compliance and Coverage Gaps: Inaccurate location data can lead to non-compliance issues and coverage gaps. For example a business expanding into a high-risk area like a flood zone, if not updated, can lead to inadequate natural disaster coverage.
  • Operational Inefficiencies and Communication Barriers: Incorrect location and contact details hinder efficient policy management and effective communication.
  • Fraud and Reputation Risks: Misleading location and contact information increase the risk of fraud and can harm the insurer's reputation.
  • Cyber insurance - Missed Opportunities for Digital Risk Management: In today’s digital age, assessing a company’s digital footprint, including its website, is crucial for managing digital risks effectively. A business’s expanding digital presence, if unnoted, can overlook crucial cyber risks, which account for a significant portion of modern insurance claims.
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Industry and Insurance Classifications (SIC, ISIC, NACE, IBC, NCCI)       

  • Global and Regional Compliance Challenges: For businesses operating internationally, accurate classification in systems like ISIC is crucial to ensure compliance across different national regulations. Misclassification can complicate cross-border trade and expose the business to legal risks in foreign markets. Inaccurate classifications in these systems can lead to compliance issues in different regulatory environments.
  • Underwriting and Market Analysis Impairments: Insurance underwriting relies heavily on accurate industry classification to assess risks and determine appropriate premiums, as well as for market segmentation and developing tailored insurance products. Misclassification can lead to either overpricing or underpricing of insurance policies, affecting the insurer's profitability and the insured's cost efficiency.
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Technological and Product Insights (Technology Insights, Product Name, UNSPSC Classification)

  • Risk Assessment Challenges: Incorrect information in these areas leads to flawed risk assessments, particularly in cybersecurity and product liability. Insurers might offer a policy that either overestimates or underestimates the required coverage, potentially leaving critical risks uninsured or resulting in higher-than-necessary premiums.
  • Underwriting and Claims Handling Inefficiencies: Incorrect or outdated product information creates complications in the underwriting process, as insurers rely on this data to determine policy terms and premiums. This could lead to delays in policy issuance or renewal, and complexities in claims processing if the claimed loss involves products not accurately reflected in the policy.
  • Compliance and Operational Risks: Misrepresentation or inaccuracies in product data can result in non-compliance with industry-specific regulations, leading to legal and operational risks.
  • New product liability risk: A bookstore selling electronic gadgets would significantly alter its risk, needing additional coverage like product liability insurance.
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Sustainability and ESG Factors (ESG Commitments, ESG News, SICS Classification)

  • ESG Risk Profiling Inaccuracies: Lack of detailed ESG data leads to incomplete understanding of ESG risks, impacting underwriting and investment decisions.
  • Regulatory and Reputational Risks: Missing ESG information can result in non-compliance with emerging regulations and reputational damage. For example, a company found to be misreporting its environmental compliance could face public backlash, affecting customer loyalty and investor confidence.
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The renewal of commercial insurance policies is a complex process that requires precise data regarding a business’s operations, location, assets, and risks. Failure to update or accurately capture this information can lead to mispriced policies, inadequate coverage, and significant financial and legal repercussions.

If you want to:

Understand what are the data challenges faced by insurers and how can they impact the commercial renewal process.

Learn more about the risk of innacurate data in comercial renewal and the key business data that can change during a year in a company.

Expand your knowledge on how Veridion’s decision-grade data enhances risk assessment and underwriting in commercial insurance.

Explore the Key Uses Cases of Veridion decision-grade data in Commercial Insurance.

Subscribe with your email and you'll immediately receive a copy of the report.

“Navigating Data Challenges in Commercial Insurance and Optimizing the Renewals Process”

With this article, you'll unlock answers to
key questions, such as:

What are the data challenges in commercial renewal and how are they impacting the retention rate?

Explore the data-related obstacles that substantially affect customer retention, resulting in inefficiencies, a heightened probability of mistakes, and an absence of tailored service, all of which contribute to elevated churn rates.

What are the risks of inaccurate data in commercial renewal?

Deep dive into the critical data sets insurers must evaluate and how overlooking or misinterpreting this data can lead to making wrong decisions in risk assessment and premium calculations.

How to enhance due diligence and risk monitoring in renewal?

Learn more about how integrating advanced data management practices and external data sources, including third-party APIs, can provide a comprehensive and up-to-date view of a business’s risk profile.

How can Veridion’s decision grade data help your company optimize the Renewal process?

Explore Veridion’s decision-grade data, which enhances the insurance renewal process by providing up-to-date data for precise risk assessments and policy customization. Learn how API integration allows real-time updates, ensuring policy relevance and accuracy in pricing, while Veridion’s AI capabilities streamline the entire process from quote to bind, improving efficiency and reducing churn rates.

Subscribe now and embark on a journey towards a more streamlined and innovative commercial renewals process.

Our report will provide comprehensive insights and actionable strategies to fully leverage the power of decision-grade data in commercial renewals.

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