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Unlocking the value of your insurance organization’s data
April 20, 2023 · Authored by Dave DuVarney, Phil Schmoyer
The insurance industry is at a pivotal inflection point: rising customer expectations, increased competition and advancements in technology are causing massive shifts in traditional business models and the industry at large. There has never been more data available to organizations, and it is easy to become overwhelmed with the challenge of turning your data into a core facet of business operations that not only drives value, but also helps you gain a better understanding of your customer’s wants and needs. As customers continue to expect product innovation from their chosen insurance provider, insurers need to find efficient ways to understand their data and strategically analyze it for new and unique insights and use cases.
What’s happening in the insurance industry?
There are countless opportunities to leverage data and technology to improve your organization’s operations. Knowing where to focus and what is best for your organization’s growth and strategy is essential. There are four critical components to the insurance value chain, each of which are integral parts of operating a successful insurance company in the modern world, and each of which are experiencing exponential change based on the evolving technological landscape.
Recently, there has been a growing focus within the insurance industry on expansion into digital/direct to consumer distribution channels, and a focus to make the online customer experience more streamlined and seamless. Over the course of the past 5 to 10 years, there has been a notable decline in customer loyalty because of the increase in competition due to price or other differentiations. This has subsequently led to a need for improved data discovery, or machine learning, and predictive analytics related to customer segmentation and identifying the ideal customer target to improve customer acquisition.
Over time, we will begin to see changes in the people and risks that we are insuring thanks to technological innovations like artificial intelligence and autonomous vehicles. These changing “customers” will drive an evolution of insurance products to meet the future operating model and stay competitive within the industry.
As organizations look for ways to optimize their risk selection and underwriting processes, adapting to and utilizing different data assets will help ensure your organization has a complete picture of your risks. There will be an increased use of “insurance adjacent data” in rating and underwriting and leveraging actual risk data for more accurate pricing and underwriting decisions. As always, there is a continued focus on frictionless and seamless experiences – most of which are delivered through utilizing data to push your organization forward and minimizing the need for tedious tasks like data entry.
Mobile technology has become much more prevalent across the insurance industry as many companies have started accepting mobile claims submissions, digital pricing quotes and delivering through an omnichannel experience for customers. This accelerates the opportunity to leverage data assets to produce a variety of advanced analytics.
Leveraging a customer portal is assisting to drive continued engagement. Many insurance organizations are moving away from a transactional customer environment and focusing on a value-added, customer service experience and support environment. Pairing this customer engagement channel with our data assets and emerging technologies such as artificial intelligence and machine learning, you’re able to predict and/or recommend solutions to your customers based on their wants and needs, which will ultimately lead to higher customer retention.
Back-office functions such as finance, actuarial and IT have continuously grown to become more efficient in recent years through process simplification and automation. Simple, more task-based automations are used now, however this will eventually evolve into decision automation by leveraging artificial intelligence, machine learning and data reasoning. Because of recent economic factors, there has been a doubling down among much of the industry on cost effectiveness and rationalization assessments and an enhanced focus on efficiency initiatives and opportunities to automate, outsource or a hybrid model.
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