Innovative carriers that are starting to monetize their data are likely to secure a significant “first-mover” advantage over their more cautious counterparts.

While many insurers have been slow to capitalize on their vast stores of data, some far-sighted carriers have begun monetizing this increasingly valuable resource. They’ve started harnessing data from their own operations, and often external sources, to boost profits by improving efficiencies and creating new businesses. These innovative companies are likely to secure a significant “first-mover” advantage over their more cautious rivals.

Belgian insurer KBC Verzekeringen, for example, has used its extensive data resources to build a digital home-insurance product that is quick and easy to buy. The KBC Home Policy requires consumers shopping online for home insurance to answer only three simple questions – address, type of home, size of property – to obtain an almost immediate quote. Available on the insurer’s website and mobile app platforms, the product combines property and claims data with sophisticated analytics to streamline underwriting substantially.

The KBC Home Policy was judged the best disruptive product or service at the recent Efma-Accenture Innovation in Insurance Awards.

A data monetization initiative by AXA in France was another winner at the annual awards. The insurer is using some of its claims and policy data to provide consumers with an innovative home insurance service that strengthens its relations with potential policyholders. AXA’s GiveDataBack facility consolidates insurance data drawn from Germany, Belgium, Spain, UK, Italy, Switzerland and France. It enables consumers to discover the risk of water damage or theft at residential properties by simply entering an address on the GiveDataBack website. They can also find out the likely frequency and average cost of these occurrences and the months in which they are most likely to happen.

In China, three insurers are working together to monetize their data resources. ZhongAn, Sinosafe Asset Insurance and Urtrust Insurance have created a big-data laboratory to monetize motor vehicle information. The laboratory recently launched a digital platform to encourage further information sharing among insurers.

The Data Cube platform uses artificial intelligence and machine learning technologies to analyze motor vehicle information gathered from a variety of sources. It aims to provide product pricing and risk prevention insights to insurers and other participants in the motor industry.

More insurers are likely to join the three initial backers of the big-data laboratory and collaborate in the monetization of their data.

Insurers looking to start monetizing their data need to answer some key questions:

  • What is the potential of the market? By identifying major business and technology trends and determining how the prospective market will evolve, carriers can determine likely risks and opportunities. They will also be able to devise the most suitable business models, accurately target the correct customers and calculate the likely value of monetization initiatives.
  • What data will generate business? Insurance providers need to identify the most attractive business cases. They must know what data and insights will be needed to support these initiatives. Furthermore, they must determine which of their current data assets could be used to achieve these objectives.
  • Who will be the best ecosystem partners? Successful data monetization requires effective ecosystem partners. Insurers must identify the ecosystem platforms and partners that will give them the best access to the markets they’re targeting.
  • What capabilities are required? It’s vital that carriers know what analysis is needed to produce the insights they intend monetizing. They should also be clear about how they intend to structure, deliver and price their data. Furthermore, they must identify the resources and skills their data monetization initiatives will require. Appropriate data privacy and security measures are essential.
  • How should data monetization requirements be implemented? Insurers need to define the organizational structure and resources needed for data monetization and assess their impact on other initiatives in the business. An effective implementation approach, that includes pilot projects, market tests and development sprints, should be clearly defined.

For more information about how insurers can monetize their data, take a look at these links.

Data rich, profit poor.

Harnessing the insurance data and analytics exhaust stream.

Technology Vision for Insurance 2018.

Digital Fragmentation: Adapt to succeed in a fragmented world.

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