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Insurance Insights: Data Exploitation

 
 

Insurance Insights | Dan Pelos |
23 February 2021

From our conversations with Insurance leaders, several topics have emerged as key focus areas for 2021 and beyond. In this series, some of our experts will provide insights on how to adapt, accelerate and innovate in Insurance by tackling the areas of Open Insurance, Data Exploitation, Cloud Migration, Customer Retention & Cross-Selling, Intelligent Underwriting Workbench, and Low Code. In part 2, Dan Pelos explores 5 key questions for insurers to develop and implement a compelling data strategy. 

Having a good data strategy in place can help your organisation to gain a competitive edge. Such a strategy includes identifying areas of weakness or risk and highlighting improvements and/or opportunities based on your existing data and processes. When insurers ask for support in reviewing their data estate, we like to understand some fundamentals to establish where they are in their data strategy journey. 

HOW DO YOU COLLECT YOUR DATA?

Are you gathering data both from internal sources and from third parties? Connecting to these different data sources and preparing to automate the ingestion processes is an important starting point in data management. 

Supplementary data, which enhances and enriches your existing data, can be integrated from third-party data sources, many of which are free. This could include historical weather and temperature data by location, for example. From this, insurers could look for patterns – such as accidents and claims which might have been caused by poor driving conditions in particular areas – and use this data analysis for future predictions or calculating risk. 

HOW DO YOU STORE YOUR DATA?

You can store your data either on-premises, in the cloud or use a combination of both, but are you storing it efficiently? Is the data ingested and processed quickly enough to allow you to act fast on decisions made through data insight or take immediate action upon data alerts? Vehicles can now stream data in real time, identifying speed, risk areas and weather conditions, for example. Is this data processed efficiently enough to then also be manipulated in real time? This is an area where we are seeing a lot of insurers migrating from legacy data centre architectures to cloud platforms to enable faster data processing and exploration. 

Data storage and processing are also key to satisfy the demand for faster customer interaction. Customers expect to be able to conduct their business with insurers where and when they want and by using the channels of their choice. Technology is creating a wealth of new possibilities and advantages here. Big data creates opportunities for insurers to make use of unprecedented insights into their customer’s life, property, health, wealth and behavioural patterns. Artificial intelligence allows insurers to sift through data quickly and efficiently, allowing for a more personalised approach as well as for observing risk management and reducing liabilities, which may lead to reduced premiums in return.

HOW DO YOU GOVERN YOUR DATA?

Due to recent and ongoing regulation requirements, governance has become an even bigger priority. Therefore, you should ensure that your organisation follows the latest regulations as well as automation, privacy and security principles. This should include the implementation of key data management elements:

  • Create a business glossary of key terms and metrics
  • Maintain an inventory of common data assets
  • Create a global set of business rules with definitions
  • Apply various industry security models for data access
  • Improve traceability for audit trails
  • Define how data is created, utilised and archived
  • Improve data regulation practices
  • Keep a close eye on operational performance


These elements are a good starting point to spot gaps and opportunities to improve your data quality and governance. They can help insurers to better understand their existing data and to leverage and monetise the data they have – provided that it is rich and complete.

HOW DO YOU SHARE YOUR DATA?

Do you track and monitor where your data is going, and do you encrypt it at all times? Providing data to the right audience, both internal and external, with the right access according to their roles, responsibilities and requirements is crucial.

Sharing data across companies is becoming more common. Insurers could create a partnership with manufacturers using data as an asset. For example, the insurer could review shared vehicle health data, which is sent from the owner’s vehicle to the manufacturer’s cloud data lake. The insurer could then send regular communications through a campaign management programme to update the vehicle owner on the vehicle health and maintenance quality and offer rewards based on a vehicle’s health score, such as a discount on the next service at a shop authorised by the manufacturer.

HOW DO YOU USE YOUR DATA?

Considering this question helps to understand data initiatives and projects as well as how data can be used to address business improvements or spot new opportunities. This could include how insurers use data to identify and analyse trends, for customer behaviour and predictive analytics, anomaly detection or premium segmentation as well as to implement artificial intelligence or machine-learning projects.

The ability to access data faster than ever before allows insurers to settle claims or act on customer demands more quickly, with conversion time being reduced from weeks or months to just days or hours.

Thus, data is becoming a key contributor in insurance claims. Typically, starting a claim process following an accident can take at least 15 minutes to verbally explain everything that happened. Moving forward, the technology inside vehicles will really accelerate over the next decade and become able to report what happened directly to the insurer. Sensors inside a vehicle will tell the insurer about the damage in a lot more detail than most drivers will likely be able to. Instead, insurers will be able to immediately ask them personal questions, such as ‘Are you injured?’ or ‘Do you need help?’. This enhancement of technology and modern data processing will likely speed up payments for claims and transform them into more of a self-service experience without the need to speak to anyone about technical details anymore.

Dan Pelos

Lead Data Consultant

As lead data consultant, Dan has spent over 15 years working on data-related projects and building solutions across a whole array of different industries’ future-proofing processes, technologies, and ways of working using insights through data with a passion for problem solving. When Dan isn’t being a renowned 'Data Rockstar', he also sings and plays guitar in his own band, The Smarties, and works as a session musician for various celebrities by performing at corporate and private events, festivals, and venues across the UK.

 

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