How data can become black gold for insurers

For the last few years, exponential development of the Internet of Things has translated into billions of connected devices producing zettabytes of data. This large pool of data can arm insurers with valuable insights on more tailored services, optimized pricing, and lowered claims to help improve the customer experience. Data can also help insurers assess and minimize risk – a critical need at a time when inflation and ongoing pandemic concerns continue to drive volatility.

There’s no question that data has become a competitive differentiator in the insurance industry. But, getting the most out of the data available to insurers today requires the right tools and data-driven strategies. For insurance carriers to transform data into a true asset for driving growth they must transition away from the traditional legacy technologies that often weigh on data quality, availability, and connectivity. Instead, digital solutions can deliver process automation, drive seamless collaboration and visibility, and help insurers leverage real-time company and third-party data to meet the evolving needs of their customers.

Customer data can be a competitive advantage

The insurance operating model has been dramatically tested during the pandemic. Between lockdowns and social distancing rules the industry has had to pivot from in-person activities to managing customer relationships and internal operations while remote. As a result, we’ve seen a massive acceleration of digital transformation efforts, with insurers looking to achieve years of progress in a matter of months so they can evolve operations, identify new revenue streams, and improve the customer experience in a virtual environment.   

However, whether they’re interactions are in-person or virtual, customers are still looking for fast, personalized, and frictionless service – so an insurer’s omnichannel approach must be seamless to drive customer satisfaction. To navigate this new environment, insurers are on the hook to gather more customer data from a variety of different sources so they can anticipate future behaviors and still manage real-time customer engagements between aggregators, webchat, digital, agents, brokers, and other channels.

Unlocking data requires digital solutions 

This is where the combination of data and digital solutions comes into play. Analyzing detailed data on customer sentiment or shifting customer behaviors, as well as information on products to be insured, can help insurers assess and mitigate risk to meet customer needs and drive growth. But collecting and consolidating this data using legacy tools – like Excel spreadsheets or department-specific point solutions – is often a time intensive task, prone to errors and data inconsistencies. Plus, with data trapped in siloed spreadsheets or departments, it’s nearly impossible to deliver accurate forecasts or change strategies in real-time when disruption occurs. 

Instead, insurers must look to digital solutions to help automate processes and connect data – both internal and external – across functions and plans. This is particularly relevant for finance and actuaries who must collaborate on both data and process to plan for the new IFRS17 or LDTI regulatory frameworks. The same can be said for finance and HR leaders who must plan for the future of work – and the relative costs – amid continued labour shortages and The Great Resignation. 

With continued volatility, insurers are leveraging digital and predictive scenario modeling capabilities to be more forward looking and agile. In fact, according to a recent KPMG CEO Outlook survey, 96% of global insurance CEOs said the pandemic has accelerated progress in the digitization of operations. These digital solutions enable insurers to leverage data to ask and answer critical questions around the future, like: How will rising inflation impact my financials next quarter? What would be the impact of a new lockdown on our contact center activity? How would a shift in the distribution of X product from physical to digital impact our revenues? From there, insurers can leverage digital tools to execute data-driven strategies, shorten reaction times, and set their organizations up to pivot strategically if, and when, change occurs.

Whether in distribution, actuary, underwriting, operations, human resources, or finance, insurance leaders are looking for digital solutions to help them transform large amounts of data into agile forecasts and plans so they can react quickly, and confidently, in the face of macroeconomic uncertainties. Seizing the power of data by creating a foundation of digital operations will help insurers deliver on their transformation strategies, scale to new markets, and meet the needs of their customers today and in the future.