Riding the data revolution in insurance

Charles Southwood at Denodo explains how insurers can and must become data driven

There is no doubt that the last two years have ushered in a fresh wave of innovation within the insurance industry. Investment in modern technologies is reaching new heights, as insurers continue to react to ongoing economic pressures and societal shifts. In fact, globally, early-stage funding for insurtechs in Q3 soared by 48.1% to reach the second biggest deal quarter ever – a figure of £473m.

Thanks to this investment, many traditional, cumbersome insurance processes are being automated. Advanced technologies, such as artificial intelligence and machine learning, mean that common activities like policy issuance, renewals and updates, no longer require any human intervention.

Instead, customers can be served quickly and effectively via self-service portals and bots. And this is just the beginning. As insurers continue to navigate the ever-changing climate, investment in modern technologies is only likely to become even more prevalent. For example, the growth of IoT technology and increased use of sensors in wearables, cars, houses and many other areas is promising to make risk profiling easier and more accurate.

As insurers continue to realise the benefits of these modern technologies, their use across the industry is only likely to increase. After all, they could unlock a world of possibility for businesses and their employees, both in terms of convenience and competitive advantage.

However, in order to capitalise on this period of innovation and provide appropriate products and services, insurance companies will need to be able to gather and analyse the information that these technologies are producing.

The data evolution

Modern technologies have one thing in common; they produce data. Whether its medical records, clickstreams, or sensor data in cars and buildings, every single piece of information needs to be accounted for when assessing risk.

When utilised effectively, this data has the power to unlock enormous potential for insurance businesses. Data-driven insights can help boost productivity, improve the customer experience, and increase profitability. Internally, they can be used to inform processes and shape wider business strategies. However, data means nothing if insurance leaders can’t effectively access and understand it.

Traditionally, data integration – or the process by which users can make sense of data – has been a lengthy, time-consuming process. This is because data is often complex and poor quality. Structured, semi-structured and unstructured, it is stored in many different places – whether that’s in data lakes, on premise or in multi-cloud environments.

Consolidating it across an insurance organisation in order to provide a single, unified view is challenging and this challenge only increases when new technologies are added to the mix.  

This is where data virtualisation can help. Through a single logical view of all data across an organisation, data virtualisation boosts visibility and real-time availability of data.  Unlike traditional extract, transform and load (ETL) solutions, it does not move and copy the data, instead it leaves the data in the source systems.

In other words, rather than replicating, data virtualisation simply exposes an integrated view of all the data – whether it’s big data, cloud data or legacy data.

For many insurance companies, this technology is helping improve overall performance and efficiencies, reducing costs and project cycle times. It is also significantly bolstering the customer experience by enabling insurance leaders to think strategically, and make decisions based on real-time data insights.  

Becoming data driven

ABN AMRO Insurance is one such company in the sector to have embraced data virtualisation and its benefits. Operating within ABN AMRO Verzekeringen, this working group is expected to serve around million customers and operates as part of a joint venture with several different stakeholders. It had previously operated on a classic data warehouse, but as the amount of data an organisation creates grows, its complexity increases. Meanwhile, the time to make decisions decreases. 

For ABN AMRO’s leaders, an increasing demand for reliable, frequent and up-to-date data in the business was being met with the desire to better substantiate decisions. They needed a solution which, reasonably fast, would enable them to combine information from different existing and new source systems and in this way support up-to-date analysis, reporting and machine learning models.

A logical data warehouse – supported by the latest data virtualisation technologies – presented the best option.

This solution has enabled the team to take significant steps in their data strategy, due to the fact that they can now access information from one central location, without the data having to be physically present at that location. Anyone using the platform can quickly and effectively find the information they need, meaning that they can better serve customers. 

For example, the marketing and sales department now has real-time direct insight into commercial figures in terms of inflow and outflow per insurance and the underlying coverages. This makes it easy to follow and adjust the results of current campaigns.

Meanwhile, the retail operations department, is now working with various workflow-related datasets and real-time Power BI dashboards to monitor whether or not they are delivering on our customer promises and monitoring the performance of a team.

Whilst the last couple of years have presented many challenges for insurers, they have also created many opportunities. Modern technologies and a newly-established openness to embrace them is transforming the entire industry.

However, in order to set themselves up for future success and beat fierce competition, insurance leaders should prioritise becoming data driven. Only the most agile businesses will be able to set themselves up for future digital success.

Charles Southwood is Regional VP at Denodo

Main image courtesy of iStockPhoto.com