Other parts of this series:
- Data monetization – the next oil or fool’s gold?
- Insurtech firms could help carriers unlock vast data profits
- Five smart tips for successful insurtech partnerships
- Partnerships are the key to insurance data monetization
- Veracity is critical to the success of insurance data monetization
- Carriers must keep agile to stay in step with data laws
- Bold insurers are taking the lead in data monetization
Suspect information can rapidly undermine an insurer’s data monetization plans.
Data monetization offers insurers huge opportunities. But it also presents them with some big risks they need to carefully manage. Inaccurate or corrupt information can quickly scupper insurers’ plans to monetize their data. Information is the life-blood of the insurance business. If it becomes suspect, the consequences are likely to be grave.
Eighty percent of the insurance executives we surveyed said their organizations were increasingly using data to drive critical and automated decision-making at scale. A similar portion of executives agreed that automated systems were creating new risks such as fake data, data manipulation and inherent bias.
It’s vital that insurance providers safeguard the veracity of the data they use. This includes data sourced from third-parties as well as in-house information. If they don’t, critical data-intensive activities could be severely compromised. What’s more, relations with business partners and customers could be harmed substantially. Once trust has been broken, it’s very difficult to recover.
Apple is a good example of a company that appreciates the importance of consumer trust. It has stepped forward as a strong advocate of data protection and has committed itself to being transparent in its use of information about its customers. This approach has helped Apple enhance its image as a progressive company that cares about its customers and takes a stand on social issues.
Insurtech firms, as I’ve mentioned earlier in this blog series, can help insurers identify and capitalize on new opportunities to monetize data. Often, however, these young firms don’t have the resources or skills to ensure the veracity of such data. It’s important that insurers working with insurtech firms take the lead. They need to assume responsibility for the quality of the data they intend monetizing. It’s no longer sufficient to focus only on “touch points” with customers. “Trust points” must now be addressed.
To strengthen their data veracity, insurers need to scrutinize the provenance of all the data they use. They should be able to verify the quality of the information at its source and throughout all stages of its life. It’s critical that insurance providers also know the contexts and circumstances in which data was gathered and ensure that their use of such data doesn’t breach legal or ethical boundaries. Furthermore, insurers need to constantly maintain the integrity of the data they collect, store and transmit.
Insurers can best ensure the quality of their data by creating a data intelligence practice. It should work closely with cyber-security and data-science operations and grade the accuracy of data used by the organization. Furthermore, it should establish, implement and enforce data veracity standards.
A data intelligence practice can swiftly strengthen an insurer’s data veracity by taking these key steps:
- Ensure that decision-support systems and processes are using the correct data. Many insurers are investing heavily in decision-support solutions but often neglect to ensure that the data they use is accurate and authentic.
- Enhance cyber-security and data-science operations to enforce data integrity and security. Also, develop data grading capabilities. Insurers need to be able to identify and track the possible corruption of their data.
- Identify and rectify processes that inadvertently encourage the manipulation of data. Consumers may deliberately falsify online information to protect their privacy or circumvent the requirements for incentives or rewards. By understanding such motives, insurers can enhance the customer experience they provide and improve the accuracy of the data they gather.
In my next blog post I’ll discuss how insurers can make sure that data fragmentation doesn’t derail their data monetization plans. Meanwhile, these links provide further information about digital monetization.