Data brings competitive edge to insurance

Insurers understand all too well the value of managing data and extracting meaningful insights from it. But as the number of data points continue to grow exponentially thanks to the Internet of Things (IoT), cloud computing, and social media platforms, those who are best able to leverage a digital-centric approach to derive business insights accurately and timely while assessing risk, will be the ones strongly positioned for success in a modern business environment.

As touch points expand by the day, relying on only a contact centre, email address, and website to deal with customer engagement is no longer sufficient. Instead, attention now turns to how best to analyse unstructured data generated through social media, chat bots, mobile messaging, and the like. Whether it is a Facebook mail, a WhatsApp instant message, a Twitter direct message, or data received from an IoT device at the edge, insurers must better track, manage, and analyse data at each of these points.

This has seen the shift towards leveraging the high performance computing capabilities of the cloud to analyse data at scale. Using this environment offers an insurer the opportunity to explore emerging technologies which help to further drive real-time analysis of data beyond the capabilities provided by on-premise systems.

Making data real

Microsoft highlighted several common use cases for machine learning and predictive analytics. These include improved risk analysis and recommendations to improve processes; improved customer retention and acquisition by gaining a better understanding of their behaviour patterns; and identifying fraudulent claims through data mining.

The opportunity to derive more sophisticated insights also brings with it the potential to monetise data in ways previously unimagined. Data provides insurers with a better mechanism to develop more agile solutions enabling them to compete dynamically with technology-driven insurtechs. Having access to integrated customer data from all their engagement points and using cloud-based analytical capabilities, is introducing innovative ways of developing more bespoke solutions and even optimising existing ones to better cater for modern customer requirements.

Analytics can now span all insurance functions to deliver a more sophisticated way of valuing data that extends through marketing, underwriting, claims management, and the customer experience. Higher demands on insurers (thanks in part to more sophisticated, digital-savvy customers) and a volatile global economy conspire to force a reinvention of traditional insurance processes. Central to this is better analysing data.

Underwriting and claims enhanced

One of the ways to reduce costs and deliver better value to the customer, is to refine the underwriting and claims management process. By linking to cloud-based environments capable of delivering digital process automation, robotic process automation, and artificial intelligence, an insurer can introduce intelligent automation to process-heavy functions to significantly improve efficiencies and deliver straight through processing.

Take for example our recent partnership with HealthCloud. The two organisations are providing insurers with a solution that intelligently automates the insurance underwriting process by securely integrating health data and medical records to assess the risk of onboarding individual customers. By integrating the data and injecting it with artificial intelligence (AI) which is built by using the human insights of underwriters, we can automate the decision-making process as far as possible.

This builds on our partnership with Astute Financial Services to deliver a fully automated intelligent claims processing solution. It uses AI modelling of insurance expert decision-makers to enable claims to be processed in real-time while providing maximum risk oversight.

Ultimately AI and machine learning combine to deliver a more intelligent view of data to the insurer. But more than that, it provides the ability to further automate processes in the organisation based on insights that were previously difficult to obtain. Viewing big data in more sophisticated ways thanks to these innovations empowers insurers with real-time capabilities they would have lacked with traditional, on-premise solutions. The new digital and inter-connected world makes data an invaluable commodity for the insurer that embraces cloud solutions to inject fresh insights into traditional approaches.

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