In today’s data-rich landscape, insurers who already collect vast quantities of information can use it to gain a competitive advantage.
For major B2C insurers managing millions of premiums, maximising data means creating a clean core dataset and a solid platform for analytics. Why commission an external organisation to uncover new opportunities when you should already have the information that you need sitting within every premium and policy that you write?
For the London market, there is a drive for digitisation via initiatives such as the Pricing Platform Limited. The appetite and need for change exists, but the challenges are different. As one firm said, with manual assessment and processes, “knowledge leaves the business at 5pm when our brokers go home each day.” With less data to work with than their B2C counterparts and a culture of paper-based agreements, many of these organisations are reluctant to move.
Three steps to data heaven
After consulting with experts from across the insurance industry, we identified three steps companies can take to get the most out of their data:
Any change in culture – including that related to data strategy – must come from the top and requires collaboration and support from across the organisation in order to be successful. It’s important to make the benefits of change clear and have an immediate practical application, such as fraud detection, to demonstrate.
Ensure that any data used is handled ethically and that security measures are in place, particularly when using personal customer information.
It’s not unusual for companies to find that they have information stored in multiple data warehouses, including Hadoop and Google Cloud. One way to maximise the use of this data, is to pull information from multiple systems into one, making legacy data available to employees who need to use it (Datazuum). You may also find it beneficial to introduce processes, so that employees know what kind of data should be stored where and how to go about logging it.
Additionally, machine learning is becoming increasingly popular among businesses as a way to manage data. Building a reliable Machine Learning-based process takes time, but the benefits far outweigh the temptation to do nothing. Firms that begin the process can look forward to using predictive analytics that will alert them to issues within their portfolio and highlight opportunities to grow – offering a far more scientific way to model the future of your business than notes taken in a meeting.
Augment external data
Third-party data – “information that’s collected by an entity that doesn’t have a direct relationship with consumers” (Digiday) – can bring additional insights to your business. However, you should set out clearly how this data will fit into your existing work and the value you expect to gain from it.
In the commercial world interesting insights emerge from external data apps that help create a richer picture.
For example, when creating an insurance quote for business premises, brokers can now evaluate risk imposed by activity from neighbouring properties. It is helpful to know whether your client is setting up shop next door to someone who holds high volumes of flammable materials or could be a prime target for theft.
External data can also be useful for improving customer insights and the effectiveness of acquisition and marketing strategies. One life insurance provider discovered that life stage events (such as getting married or having a baby) motivated 41% of life insurance purchases (V12).
Telematics specialist secures fleets and delivers safer drivers
The telematics market has evolved rapidly in a very short space of time. Organisations that began with services to help multi-drop delivery drivers to plan their routes have evolved into major players in the insurance services sector.
One such organisation has worked with Coeo to morph its multi-drop solution into a vehicle loss tracking service. Using discretely placed devices, the organisation tracks and monitors each vehicle within a fleet; receiving an immediate alert should theft occur.
This, coupled with GPS co-ordinates, allows them to pinpoint when and where a theft occurs and where a vehicle is being taken. This organisation can then bring in local authorities and specialist repatriation services – preventing the vehicle from crossing borders and potentially leading to the capture of criminals.
This approach has two benefits for customers - peace of mind that their vehicles are being closely monitored, and reduced insurance premiums.