How commercial insurance firms are moving towards an extreme digital approach?
The rate of adoption of automation and digitization in the Commercial Insurance Industry has increased extensively. There is no wonder that the insurance business is one of the most complex and competitive industries and faces multiple challenges. The industry typically deals with a voluminous amount of data to deliver superior insurance products and services. With the evolution and rapidly changing digital environment, a proliferation of mobile, channel-agnostic and demanding customers, and the emergence of InsurTech, brokers and insurers continue wrestling with information siloes and the large amounts of data to process incoming in every format possible.
Significantly, insurance companies have historically collected a trove of data, but they have been sluggish to monetize that owing to the lack of new business lines or models to grasp the value of data and analytics. This data volume is increasing exponentially as more insurance consumers move online to engage, compare products and prices, and make purchases. However, many insurers face organizational challenges to becoming data-driven, most are increasingly piloting digital transformation projects, experiencing major disruption through the digital journey.
Insurers that have made strides in exploring into automation have enhanced their data movement between newer and legacy systems. They are stepping towards capitalizing on analytics capabilities. Despite this, the commercial insurance industry has lagged behind other industries in their investment in and adoption of analytics.
Aside from this, insurers face other challenges such as ongoing commoditization, easy to replicate innovations, regulatory changes, macro-economic uncertainties, and decreasing loyalty. Also, the need to find a different narrative in approaching modern customers, digitization of business processes like insurance claims processing, and innovations in the area of new models whereby policy terms are linked with data from emerging technologies including IoT are major insurance challenges.
Monetizing Customer Data
The explosion in available customer data is significantly forcing commercial insurance firms to leverage analytics technologies to derive meaningful insights. The rapidly decreasing cost of computing power and data storage is also prompting companies to invest in data analytics as a way to innovate.
Most winning insurers utilize customer data that give them the ability to evaluate and discover patterns to address customer pain points. These include establishing policies, renewing conventional ones and making a claim. Furthermore, many forward-thinking insurance leaders are pursuing opportunities to develop data-driven businesses in core and adjacent markets. They often seek to monetize their proprietary consumer data and offer technology, consulting, and other services to both customers and partners.
Thus, by leveraging data analytics within insurance processes, insurers can radically deliver effective data-driven decision making into different areas such as cross-selling and reducing customer churn. Digitizing data will also assist industry leaders and solutions that use artificial intelligence as a way to deliver intelligence to the digitization process are key. This is especially vital when demanding to compare documents, data sets or employ specific business rules to get the desired outcome.