Digitalising insurance: Laying the foundations for success
There is no doubt that those working in insurance have faced significant challenges in recent months. Like many other industries, one of the immediate hurdles to overcome has been a mass shift to a new remote working model. For those in insurance, a historical reliance on face-to-face communications and physical paperwork has made this transition far from easy.
To make matters even more challenging, many insurers have also witnessed a dramatic increase in the volume of customer enquiries. Whether relating to business interruption and closures, or personal health and life cover, requests for new policies and claims are continuing to roll in.
Across the sector, the pandemic has shone a light on multiple practices and systems that are no longer fit for purpose. It has forced businesses to re-evaluate and evolve in order to survive the current climate and prepare for an uncertain future. For many, part of this evolution has involved adopting new technologies and digitalising services.
The rise of insurtech
Although the insurtech market has been steadily growing for several years, the challenges posed by the pandemic have driven a significant rise in both investment and adoption. As such, COVID-19 has been an unexpected catalyst for innovation across the insurance sector. It’s been that insurtech saw record-breaking investor appetite in the third quarter of 2020, with US$2.5bn raised across 104 deals globally.
There are many different examples of how modern technologies are currently helping insurers to plug the gaps and continue to deliver their services, whilst complying with the latest government guidance. For example, with clients unable to come into the office for face-to-face meetings, authentication processes have had a revamp. Insurers are now implementing identification applications to safely and conveniently ensure that individuals are who they say they are. Meanwhile, and in another effort to limit direct contact with clients, drones are being used in cases of property damage, in order to collect the digital imagery needed to make a claim.
Other insurers are using modern technologies – such as artificial intelligence and predictive analytics – in order to effectively assess risk and set rates. For instance, during national and regional lockdowns non-urgent medical examinations, understandably, could not take place face-to-face. Pre-pandemic, this was often a requirement for life insurance policies. As a result, many firms have turned to previous medical data, using a mixture of artificial intelligence and predictive analytics to gather the information needed.
Starting from the ground up
As insurers continue to realise the benefits of these modern technologies, their use across the industry is only likely to increase. After all, they could unlock a world of possibility for businesses and their employees, both in terms of convenience and competitive advantage. The data-driven insights that they produce could help to increase productivity, improve the customer experience, and increase profitability. However, the long-term success of any modern technology relies on having the right infrastructure in place to support it. In order to reap the future rewards, insurers will need to lay the foundations today.
Traditionally, data integration – or the process by which users can make sense of data – has been a lengthy, time consuming process. Consolidating all data across an organisation in order to provide a single, unified view is challenging and, when new technologies are added to the mix, IT teams can struggle to keep up.
This is where a logical data fabric, which is built on data virtualisation, can help. It creates an architecture that is both agile and able to accommodate modern technologies, while making the technology change impact non-existent. By producing a single logical view of all data stored across an organisation – regardless of its location or format – this technology can give businesses an edge, enabling them to access all information quickly and easily. This is imperative for insurers as every single piece of information needs to be accounted for when assessing risk. Whether its medical records, clickstreams or even sensory data from buildings and cars, insurers need to be able to see the ‘full picture’ at all times.
While recent months have presented many challenges for insurers, they have also created many opportunities. Modern technologies and a newly-established openness to embrace them are likely to have a lasting impact on the entire industry, with businesses continuing to reap the benefits for years to come. However, when it comes to digitalisation, in order to set themselves up for future success, insurers should prioritise creating an architecture with agility – and data virtualisation – baked in. It is only then that they can be ready for whatever comes next.
This article was contributed by Charles Southwood, Regional VP (Northern Europe and MEA), Denodo