To get the most out the huge volumes of new data, and become disruptors, carriers must start looking at data as a supply chain.
As I noted last time, insurers it will be critical for insurers to position themselves carefully within the data supply chain and become masters at using it effectively. This observation ties in with the trend “Data Supply Chain” identified in the Accenture Technology Vision.
The thinking behind the concept of the data value chain or supply chain is that in order to unlock the value of their data, insurers have to find ways to let it be easily accessed and flow easily and usefully through the entire organization—and eventually throughout the organization’s ecosystem of partners too.
In other words, the silo mentality so prevalent within insurance companies has to be overcome and new functions will have to be created.
Organizationally, insurers will have to transform in order to achieve the greater flexibility they will need to respond in real time to a rapidly shifting customer and market environment.
Measured responses reliant on today’s static organizational structures will not be enough. This kind of organizational transformation will be driven by, and accomplished in tandem with, the kind of digital transformation we have been talking about for quite some time (read Four capabilities insurers need on the journey to digital mastery and high performance for more).
The other side of the coin is the free flow of data-driven insight around the organization to wherever it is needed. Indeed, the organization is likely to be somewhat broader: in the data world, insurers will have to build ecosystems of partners to gather the data and provide the next-generation of services customers want. The data supply chain will have to extend across the whole supply chain. (Read more about the concept of the data ecosystem in a previous blog series, Data monetization in the age of big data.)
Establishing and maintaining the right partnerships will ensure access to the data, but remember that only by being trusted will insurers place themselves in a position to use it.
This kind of transformation will take time, of course, and Accenture’s insurance team is working hard to understand the steps and models that companies will need to accomplish it. (Email your contact information now to request a copy of this forthcoming white paper.) In the meantime, as this process unfolds, insurers need to begin creating a cross-enterprise data supply chain that harvests data from multiple sources, and rapidly makes it available to the entire organization—at the velocity that managers will need it to make real-time decisions.
If you’re very optimistic, you might argue that this new data supply chain could provide the skeleton or blueprint for the kind of integrated, un-soloed organization that insurers will ultimately need to build in order to take advantage of the opportunities opened up by digital technologies.
Some leading insurers have already taken steps to develop test-and-learn capabilities for big data by setting up Big Data Innovation Labs. This approach seeks to make the most of scarce skills by putting them in one place, thus providing a “standard-bearer” for the idea of data-driven insurance for the whole organization.
One final word in conclusion: take heart from the fact that insurers really do have a head start in this new data-centric world—after all, they have been working with data from third parties long before it became fashionable. One example is using information from credit bureaus to hone their rating of customer risk. Now it’s a question of adding new sources, such as comment from social media platforms, weather data, traffic data and more.
For more on these topics, as well as the other technology trends shaping the future of insurance, please read From digital wallflower to digital disruptor.