Solutions

Overcoming Confirmation Bias in the Insurance Industry

CoreLogic released its 2022 Leadership in Insurance Survey, which asked executives in the property and casualty insurance industry how they see the pace at which executing business transformation initiatives is happening in response to significant shifts in the risk landscape. The survey results showed a growing realization that data science, multi-peril analysis and automation are emerging as critical factors in reducing costs. Another finding is that many executives are dealing with confirmation bias, a type of cognitive bias that involves favoring information that confirms previously existing beliefs or biases.

Mick Noland – Insurance Survey Interview

In this insight, Mick Noland, CoreLogic’s general manager for Insurance Solutions, examines the responses and shares his thoughts on how data science and analytics will affect the insurance industry and help alleviate confirmation bias.

Some of the key insights and findings from the 2022 CoreLogic Leadership in Insurance survey include:

  • 89% of respondents say that the property and casualty insurance industry is operating in a more volatile environment today compared to ten years ago.
  • 70% of respondents say traditional actuarially based processes for assessing risk associated with property and casualty are not optimized to address the complexity of today’s market. 
  • 77% say the property and casualty insurance industry wrestles with confirmation bias with a significant percentage of underwriting decisions.
  • 84% of respondents say the property and casualty insurance industry struggles with confirmation bias with a significant percentage of claims processing decisions.
  • 90% of respondents agree that data-driven decision making is emerging as an important strategic factor in operating successfully in the property and casualty insurance industry.
  • 84% of respondents say a comprehensive mastery of data science is critical to avoid confirmation bias that can emerge from working with inadequate data sets.
  • 91% of respondents agree that high-quality data enables various departments to work better together to achieve desired business outcomes for their organization. 
  • 86% of respondents say that data science is playing a growing role in designing services within the property and casualty insurance sector.
  • 87% say that multi-peril analysis is playing a growing role in designing policies within the property and casualty insurance sector.

To hear more from Mick and CoreLogic’s perspective on the trends that are shaping the property and casualty insurance sector:

2022 CoreLogic, Inc. , All rights reserved.

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