Data is everywhere today and Artificial Intelligence is changing the way that data is being used to calculate risk, detect fraud and speed up the claims process. Here’s some insight into how valuable data is to modern insurers and brokers, from LexisNexis;
The feedback comes from a study by LexisNexis Risk Solutions detailed in the new report, Deep, Rich and Meaningful – Insurers See Data and Analytics Transforming Their Business, in which 89% of insurers state that data and analytics are either extremely or very useful to their business.
The study found that 96% of personal motor insurers and 89% of personal home insurers are already using data and analytics, and this is either extremely or very useful to their business. Only slightly fewer see that trend continuing, with 82% of personal motor insurers and 85% of personal home insurers believing that data and analytics definitely will or probably will transform their business in the next year or two.
However, in a sign that motor insurers in particular want to create differentiation through increased customer engagement and a better understanding of customer needs, 70% of personal motor insurers saw improved, more targeted marketing and enhanced customer experience as the main benefit of data and analytics.
In contrast, in the personal home insurance market, more accurate policy pricing is seen as the main benefit of data and analytics with 57% putting this as the key benefit.
When asked about how they could use data and analytics more effectively today, in keeping with earlier results, marketing again took precedence with 69% of motor insurers and 60% of home insurers saying data and analytics could be better utilised across both lines. 65% claimed to be ‘extremely or very positive’ about improving the ability to detect fraud.
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Martyn Mathews, Senior Director, Insurance, LexisNexis Risk Solutions, Insurance UK and Ireland said:
“Our findings confirm just how fundamental data and analytics are to the insurance sector today and the role they will continue to play in shaping the sector over the next few years. The insurers we surveyed are clearly focused on leveraging data to deliver targeted marketing and enhanced customer experiences, as well as to gain insights for helping them to write risk more accurately and detect fraud. As more and more data comes into the sector – whether from the connected home, car or wider IoT, insurers’ ability to capture and derive insight from that information, in combination with existing customer data, will be key to their future survival.
“In essence, data and analytics empowers insurers by giving them a holistic view of customer behaviour, their individual risk and the ability to link valid information to real-time interaction. This helps insurers to not only understand risk, but also spot profitable opportunities and apply the right strategies across their books.”