Other parts of this series:
In the first two parts of this series, we talked about the changing landscape of external data in insurance and the new ways to share and use this vast stream of information for growth. It’s clear that this explosion of data has the potential to transform the insurance industry, so the critical question for carriers is whether they are set up to handle it and are approaching it the right way.
In order to make the most of the external data and be effective, carriers need to focus on building out a range of third-party data (3PD) capabilities to consistently assess and improve 3PD usage. Examples include end-to-end life cycle processes, management processes and controls, and technology and analytics capabilities.
Leading insurers are already pushing for the necessary technologies to get the insights right away. Robust data quality management, with rapid, near-real-time feedback mechanisms, is key to establishing successful analytical models and processes. Henry Burton, founder of Artelligen, told the Financial Times: “Without question, machine learning will replace statistical models. The amount of data we create is astonishing.”
Building ecosystem partnerships with players from outside the industry and startups will also be key to creating new products and new revenue streams. For example, Enigma, a New York based tech startup and a graduate of Accenture’s Fintech Innovation Lab, provides property and casualty insurers with real-time notifications about changes in the status of commercial buildings, including the addition of kitchens, boilers and other features that change the building’s risk profile.
Last but not the least, the changing landscape of external data also requires a new workforce. According to Accenture’s “Harnessing the Data Exhaust Stream” report, analytics can no longer be the exclusive territory of data scientists. “Larger segments of the workforce need to be trained to use analytics to add value to marketing and core insurance functions. They also need to be encouraged to demand the right support from the right skilled colleagues, based on their unique insight into frontline challenges and opportunities.”
Successful insurers of the future will need to adapt to the rapidly changing landscape by becoming not just more data-driven, but more flexible and responsive. Harnessing external data will be a complex undertaking, but the carriers that have the right technology, workforce and ecosystem partners will be the ones that become the strongest players in the new digital arena.
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