Other parts of this series:
Insurers can gain valuable new insights by accessing external data streams and embracing the talent and technologies that can help them get results quickly.
Insurers have been using data and analytics to make underwriting decisions, price risks, predict losses and manage claims payouts for years. But they have generally relied on their own data and on structured information from bureaus and agencies to make their decisions.
Now, a flood of new data is available from various external sources, including:
- Government and third-party databases that have been digitized.
- Social media comments.
- Online discussions and product reviews.
- Input from devices connected to the Internet of Things.
These vast new data streams are a boon, presenting insurers with opportunities to identify and act on brand new insights into risk factors and to substantially improve their loss ratios. Insights developed from these new sources of data are also making it possible for insurers to create new products and new revenue streams, often in partnership with players from outside the industry.
To make better use of available data, some insurers are creating a “self-service” analytics environment—a decentralized, business-led setting that lets analysts rapidly access a wide range of unstructured data sets and new technologies, and then build their own models and analytics. With this wealth of data at their fingertips, analysts can quickly iterate through data sets and test ideas to reach the right answer in a matter of hours. Leading insurers, rather than controlling what analysts can access, are pushing for more access to useful external data and the technologies that can help them get insights fast.
Use of external data streams is also creating a requirement for robust data quality management, with rapid, near-real-time feedback mechanisms if issues or inaccuracies emerge within data sources. This will become increasingly important as the business becomes more and more dependent on external data and the associated analytical models and processes.
This environment also calls for new approaches to the insurance workforce. Analytics can no longer be the exclusive territory of data scientists. Instead, larger segments of the workforce need to be trained to use analytics to add value to marketing and core insurance functions. The goal should be a “liquid workforce” that incorporates internal and external resources and readily adapts to new skills and tasks.
With the playing field changing rapidly, insurers who want to get ahead of the competition must find ways to obtain new insights into the business and their customers—external data streams could be the key.
- Register to download Harnessing the data exhaust stream: Changing the way the insurance game is played.
- Email me to discuss how Accenture can help insurers use new external data streams to build value.