AIG on Monday plans to name Murli Buluswar to the newly created position at Chartis, its global property- and casualty-insurance business. The 40-year-old will oversee a research team that will draw in part on the immense collection of information the company has amassed around the world in the course of doing business.
The goal of the effort is to improve loss forecasts, reduce costs and devise more accurate pricing for insurance policies—even for big clients in the commercial-insurance field, where such analysis is relatively rare.
This so-called technical pricing has become common in recent years for some financial-services firms, including insurers that sell coverage for cars and homes. Companies such as car insurer Progressive Corp. and credit-card bank Capital One Financial Corp. have mined data in hopes of predicting behavior among groups of individuals.
Commercial insurers have been slower to take up the practice, in part because claims in some lines of coverage are far less frequent, much costlier and harder to forecast than, for example, car accidents.
"We have to come up with more creative ways to wrap our arms around large losses," Mr. Buluswar said in an interview.
The team may analyze the prices charged by rivals in new ways, seek new approaches to helping customers reduce losses and examine topics including climate change and the effects of Bisphenol A, which is used in some plastics but has been shown in some studies to be harmful to humans, Mr. Buluswar said.
Mr. Buluswar, who joins from Farmers Insurance and worked previously for both Progressive and Capital One, will report to Chartis Chief Executive Peter Hancock. His team will also study ways to improve products offered by Chartis's consumer-insurance operation. "There's an incredible amount of data we can leverage to make better decisions," Mr. Hancock said in an interview last year. "We need to stretch our thinking."
Mr. Hancock, an expert in risk and finance who has run Chartis since April 2010,is trying to improve the unit's profitability while keeping risk taking in check. He has asked employees to look for ways to analyze and use the large amounts of information the business has collected over the years.