Coverager : The Future of Data in Insurance

Executive summary :

In 1693, Edmond Halley published the first of what today’s actuaries would recognise as a mortality table, applying statistical methods to the mortality data from a Polish town. It wasn’t until 1772, almost 80 years later, that Richard Price published the next table. While data has always been the foundation of the industry, data collection and usage have moved slowly.

Data is the key to survival

Insurers must get to grips with data
With the digital revolution, this is no longer the case. 90% of the data in the world has been generated in the last two years alone. Data is created and updated in real-time. Advances in data storage, data processing, and computing and algorithms have enabled new opportunities that didn’t exist just a few years ago. The insurance industry, an industry that heavily relies on data, must learn to process and pivot directions quickly based upon this data to gain a competitive advantage. The advent of insurtech has opened new opportunities for insurance companies, most of which are based upon the centuries-old importance of data.

A response to the marketplace and disrupting technologies, the term insurtech describes the intersection of insurance and technology. It has evolved as companies seek to exploit new technologies that cater to digitally-savvy customers. While insurtech companies can focus on the front-end, back-end, or both, they all have the goal of helping insurers compete and add value to the industry. Others compete directly against incumbents, seeking to capture market share by offering superior digital tools.

Better data analysis brings many benefits
In an on-demand world, consumers now expect 24/7 access to their providers and a seamless and omni-channel experience. They want to apply and get quotes online, file claims online or through an app, get instant access to advisors via their preferred medium and track their policies in the digital world. Insurtech platforms now collect an unprecedented amount of data. Analysing this data presents opportunities for greater cost efficiencies, a streamlined claims process, and risk and fraud prevention.

The data underlying the insurtech revolution will touch every aspect of insurance. The marketing department can immediately judge a campaign’s success, and quickly pivot and make changes based on customer response. Policies and new products will not be created in a vacuum; rather product development will collaborate with marketing, underwriting, and agents. Insurtech is shifting the insurance company model from a siloed organisation to ecosystems which are fully integrated.

Data is the key to survival
According to the Milken Institute, an estimated $9 billion of capital has been invested in insurtech as of 2018. Insurance companies are rushing to gain a competitive advantage by partnering with those who have the technical know-how. They are driven by the increasing need to understand and leverage data, which some experts view as the key to survival for an industry increasingly under pressure from slow growth, the interest-rate environment, and new competition.

See the full report for more…

Link to Full Article:: click here

Link to Source:: click here