Spending on global insurance IT will reach $104bn by the end of this year, according to research by Ovum.
Insurance companies which don’t embrace technology risk falling behind if they don’t expand their IT budgets and focus on utilising data. Ovum, 2018
More so than ever, the insurance industry is operating on crumbling technical foundations. Patchwork legacy systems underlie most analytical processes and the lack of integration slows innovation and increases cost. The infrastructure isn’t designed to adapt to current trends to interpret patterns in large, complex datasets.
Forward-thinking insurers are enhancing their 360-degree customer view and renewing policies based on previous year customer experience stats. They are analysing lifetime customer value and identifying more upselling and cross-selling opportunities. They are also looking to improve customer relationship management systems and spot trends in social media activity throughout the customer lifetime journey. The only problem is that in the insurance world, data is collected from thousands of disparate sources – meaning companies are dealing with an unprecedented number of highly complex data sets, both structured and unstructured, demanding greater processing power and storage capacity. “we’d expect to see Artificial Intelligence (AI) move into the mainstream next year, alongside the increased use of blockchain platforms to achieve better data quality”. EY, 2018
Insurers fully understand that more sources of information give them the ability to gain a deeper insight into the risk they're covering, offering unprecedented insight into the customer and more accurate underwriting and pricing. It also allows for more personalised product development and a much smoother insurance application process. Instead of customers supplying lots of data themselves, insurers can pull details in from other sources, which saves time and reduces hassle and allows brokers to spend more time with their customers.
But the big challenge is what insurers do with their data and how they store it. The solutions could be the cloud, a data centre or mix of both to remain both secure and compliant. Deloitte, 2018
When You Disrupt..
Disrupters in the insurance market have turned the current industry on its head. These businesses focus on quick claims management and complete transparency; understanding its customers’ pain points and delivering an intuitive service that caters for all.
These disrupters are making impressive growth as they have avoided the mistakes made by other insurers. Many have a protracted claims process and risk compliance procedure that leaves customers with little idea of what their policies cover. Innovative insurers recognise that customer satisfaction is driven by tailormade customer packages, enabled by solutions like cloud analytics and machine learning.
Cutting edge insurers continue to scale new heights thanks to their work with AI. Chatbots are now dealing with claims at remarkable speed. One example of this is a claim that was settled in just three seconds. This included “cross-referencing policy details, running 18 anti-fraud algorithms and transferring the settlement into the policyholder's bank account”. Lemonade, 2017
The path to digital transformation
With customers looking for superior levels of customisation, security and business intelligence, the rest of the insurance industry really must follow suit. As Steve Jobs said: “Innovation distinguishes between a leader and a follower”.
Node4’s Cloud Transformation Consultancy offers an affordable, disruption-free, and efficient service for Insurers– enabling digital transformation.
If you would like more information on how Node4 can differentiate you as a leader drop us an email at email@example.com or call us on 0845 123 2222.