Advances in technology - particularly those centred around business intelligence - have radically changed the insurance industry. By having the kind of insight, and foresight, necessary to make more informed decisions on risk and other variables, companies are able to craft their business plans and services accordingly - and drive growth.
"The bottom line is that in order to survive and thrive in a rapidly changing insurance landscape, with its fair share of challenges, insurers need to respond to what consumers want and provide it to them in a cutting-edge, innovative way," says Clinton Brown, SSP's Sales Manager for Africa. Data provides a new way of doing things and can drive growth in the right direction.
Managing challenges through technology
"What we have now is a convergence of several important technologies that allow insurers to better manage challenges such as changing consumer behaviour, increased competition from non-traditional market entrants and the rising costs of compliance," says Brown. According to him, the true leaders in the insurance industry will harness advances in technology to drive innovation, based on the right blend of data, analysis and insight, to help improve their customers' experience and grow their bottom line by adding "real value".
"The most successful companies will be the ones that stop being just an insurance company but become both an insurance and a prevention company," says Brown. This, he adds, can only be achieved by having access to the right data, along with the resources to correctly interpret the data, as well as the insight to create and implement value-added services that meet customer demands and lead to company growth.
Lifeblood of the industry
Essentially, data can be seen as the lifeblood of the insurance industry as it is vital to most business functions within an insurance company, including underwriting, pricing, financial analysis, claims handling, marketing, product development, and strategic planning. "All insurance data comes from the same source - transactions conducted by insurance companies on a daily basis. Whenever an insurance premium is collected, a claim is paid, an expense is incurred, or an investment is made, an insurance company captures valuable information. With well-defined objectives, carefully designed specifications, and comprehensive data processing systems, this detail can be compiled into useful, actionable information," explains Brown.
Present and substantiate benefits
He concedes that innovation can sometimes be restricted by compliance and regulation and that return on investment (ROI) will always be a key consideration for companies when adopting new technology - which is initially often an unknown, unproven factor. "IT solutions vendors need to ensure they demonstrate the value of new technology in terms of business benefits, with substantiation," he emphasises. "To make sound business decisions and gain a competitive edge in the market," says Brown, "insurers need to evaluate the data available to them, its advantages or drawbacks, as well as the underlying processes. And they should be correctly advised on the steps necessary to improve data resources. This is an important strategic role that IT vendors can fulfil."
Brown concludes that data is both the main driver in the development or improvement processes and products, and the by-product of those processes and products. "This co-dependency on data has brought about a deep-seated insurance industry focus on data-management concepts and principles.
Measuring and minimising risk in a rapidly evolving marketplace makes it crucial for the industry to maintain a sharp focus on data and analytics."
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