For our themed feature in January IE is looking at effective data management. OK, what do we mean by that? It’s simply gathering data and storing it whilst meeting regional compliance rules, sharing it with partners, plus extracting and cross-referencing data to gain a deeper understanding of your customers, renewal rates, new quotes and settlement offers on claims.
Well, of course that summary hides a multiplicity of automated tasks, the subtle differences in different segments of the market, plus the tricky issue of integrating historic data into newer SaaS platforms and eco-systems. Stir in some cyber attacks each day, power outages and the like and you begin to see it isn’t all gravy, data management can be like herding cats.
Yet the rewards are huge. Ask companies who use data from suppliers like Percayso Inform, who recently signed a deal with fast-growing broker Principal Insurance based in the UK and Ireland.
“Innovative thinking is at the heart of our business, from the products we offer to our customer-focused service, and that means that we’ve not only embraced the benefits of cutting edge technology from day one but also the data available to us to write sustainable books,” said founder and managing director, Dave Bowcock (pictured above). “We were impressed with the ease of use of this new tool that we will access via the Percayso platform, which allows us to set our own rules and quickly adapt them to changing market conditions and business strategy. I have no doubt that it will help us to write better business more efficiently. ”
Yep, the right toolkit is essential. If you look at another challenging area, renewals, Sollers Consulting sees huge benefits ahead as regards fighting claims inflation;
“Artificial intelligence is about to fundamentally change the insurance business. But to utilise it, insurers need to invest in their IT infrastructure”, says Niels Zijderveld, Chief Sales Officer at Sollers Consulting. “Insurance companies will expand their strategies to reduce claims costs and focus on cost-efficient models through automated distribution and underwriting.”
CLOUD VERSUS DATA CENTRES
In days of old many insurance brands had their own basement server rooms, where data records were meticulously guarded and back up disks took up more shelf space than Celine Dion’s shoe collection. But all that is changing, albeit slowly as Cloud based, on-demand systems become the default setting.
Paul Willoughby, Strategic Advisor at Endava sees this trend gathering pace in the future;
“Whilst some insurers are well advanced in their cloud adoption, others are still dealing with on-premises data centres. These require refreshes of hardware necessitating large capital outlays. They also don’t give insurers the flexibility to size for peak traffic nor to capitalise on cost-saving periods where there is little activity. Data centres also usually come with long lead times on service level agreements, increasing the difficulty of working with any sort of business agility. To add to the complexity, many data centre providers are finding them unprofitable to run and are exiting.”
HOW FAST CAN AI RUN?
To some extent AI has been over-hyped, a bit like the Cloud a decade ago. There is no magic bullet, but equally there is no denying that automation of routine processing is where the big wins are for many insurers. Andrew Pollard, (above) Insurance Specialist at SAS UK & Ireland sees dealing with regulation and improving the customer experience as being crucial parts of the AI deployment strategy;
“It’s no surprise that in 2024, insurers are turning to data to make more informed decisions. Artificial intelligence (AI) has made analysing data easier, quicker and more accurate, with companies increasingly turning to vendors who have these capabilities to help modernise their operations. Yet these advancements have run parallel to increasing regulation surrounding AI, data privacy, and protection in recent years, with the upcoming EU AI act the next regulatory requirement the insurance sector is focusing its attention on.“In an industry already spending significant time dealing with complex regulatory requirements, this could prove a further challenge for insurers, but new research has shown many are turning to their AI software vendors for guidance. Two-thirds (66 per cent) of decision makers in data, analytics and cloud services surveyed by SAS said they expect their current AI software suppliers to help them comply with upcoming regulations – placing more trust in them than even their own legal and IT teams (57 per cent and 21 per cent respectively).“Though no single stakeholder is expected to be wholly responsible for AI legislation compliance, the movement towards greater collaboration across companies is certainly an interesting one to watch. It will help ensure each insurer is in the best position to stay on top of the latest technical and legislative developments, so they can maximise their data to transform their approach to customer experience, fraud and risk management.”
FINDING VALUE
OK, regtech is an essential function for any compliant insurance brand. But where are the gains as regards understanding claims trends, asset valuations, developing new products, or offering embedded product lines with partners?
Tim Hood, VP EMEA & APAC, Hyland has these insights;
“Extracting meaningful value from data is contingent on the volume and quality of data available. If a data sample is too small, or of poor quality, it can be difficult to identify the patterns and insights that inform day-to-day business operations.
The claims process is an obvious example. Insufficient data can mean increased cycle times, slower processing speeds, potential for fraud and a much bumpier customer journey. Similarly, claims leakage – the difference between what an insurer did and should have paid out – will be higher if you’re acting on insufficient information.
In both cases, small inaccuracies add up. Fortunately, modern content management systems are addressing this. For one, modern systems are capable of handling greater amounts of data. More data means more information to identify patterns and areas for improvement.
They’re also more capable of combining this data, painting a better contextualised picture – so not only are they using more data points, but driving greater insights to make informed decisions. In combination, this means insurers are more self-aware, and better equipped to tackle dips in performance. It’s incredibly important to find the tools that delivers more accurate judgements in each individual claim – as well as scrutinising the processes that can lead to leakage.”
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