Digital has been the buzzword across the Insurance sector for some time. But as the industry gets to grips (or less so in some cases) with digitization, business leaders are increasingly focused on another D … and that is all things ‘Data’.
Insurance has always been a data rich industry. The exponential development of technology – not least the smart phone – has led to an explosion of easily available information.
Insurers, like most businesses, want to know as much as possible about their customers. Traditionally this has enabled pricing strategies, but many are now using their newfound ability to monitor activity as a means to influence customer behaviour, employing the principals of behavioural economics to positive effect. Examples can be seen in the Life and Health Sectors where customers are rewarded for leading a healthy lifestyle, and where telematics encourages safer driving.
Rightly or wrongly from an ethical standpoint, there’s an obvious risk/reward model in play, with insurers accessing and attempting to prioritise multiple data sources.
Elsewhere insurers are using data for other purposes. From loss prevention and fraud assessment, through to enabling targeted marketing for specialist products. The list is seemingly endless in our data-rich world. In a recent survey, the Boston Consulting Group noted: “In today’s market, anyone can obtain vast amounts of data and buy the latest analytics tools. But new technologies alone don’t bring competitive advantage.”
With a focus and reliance on data, it is easy to understand why a clear Data strategy is paramount to the success of the modern insurance business. In reality however, many sector business leaders are (at best) unclear how data will transform their organisations.
If you would like to discuss this article further, learn more about The Norman Broadbent Group, or discuss specific people or organisational challenges, please do not hesitate to contact Clare Nash via clare.nash@normanbroadbent.com or on +44(0)7483 015591