Data is no longer a means to an end. Today, data is an asset that can be leveraged internally and externally.
Businesses today can capture more information than ever before in multiple ways. Digital interactions with customers on mobile and stationary devices provide a footprint of interactions and inquiries. The Internet of Things has provided for billions of connected devices and objects fitted with tools to measure, record and transmit information. Customer purchases, responses to ad campaigns and marketing messages can be captured and analyzed.
Turning these data points into valuable insights requires data analytics programs that today can easily capture, store, analyze, display and report on information from myriad sources. These internal insights provide business leaders with the information needed in real-time to make better decisions.
Companies are also realizing that the data they gather, package and analyze is a valuable commodity that can be leveraged into new revenue streams.
What Does the New Role of Data Mean for Insurance Companies?
Insurance companies, like those in many other industries, are in a time of digital transformation. Disruptive technologies such as artificial intelligence, automation, the Internet of Things, data analytics, 3D printing, augmented reality and cloud computing are changing not only how business processes are completed, but also the way work is done. In some cases, digital transformation is causing companies to develop completely new business models.
At the same time, insurers need to remain vigilant, aware of the threat of digital disruption. New players are emerging that are taking completely different approaches to insurance. These disruptive players could potential uproot the insurance industry, much as Uber has for personal transportation and Airbnb has for lodging.
Insurance at its heart is a customer-centric industry. As such, the influence of data on customer expectations is an important consideration of how insurers use data.
Customers want to simplify and see transparency in their selection of insurance policies. They expect to be able to connect with their insurance companies across channels, no matter what device they're using, where they are or when they need information. They also expect those with whom they interact will know the full extent of their previous interactions and be able to assist them quickly.
How is Data Changing How Insurance Companies Operate?
With changing customer expectations and the sheer expanse of data being collected, insurance companies are already changing their models and processes. Among the notable changes are the following:
What are Some of the Other Advantages of Embracing Data for Insurance Companies?
In addition to the digital transformations data can provide, more data and better tools to collect and report on data mean better compliance. Insurance companies are subject to increasing regulatory mandates at the local, state, federal and international level.
As insurance companies consider new uses for the data they collect, they need to be aware of the mandates from multiple agencies. The recently enacted General Data Privacy Regulation governs how companies share data with others for any customer that is a resident of the European Union. Companies that do business in the EU also need to abide by the capital requirements in the Solvency II Directive 2009.
Domestically, insurers need to report to state regulatory bodies and the mandates of the 2010 Dodd-Frank legislation. In all these cases, the ability to collect, report and use data makes regulatory reporting easier and more consistent.
What Challenges Do Insurers Face When it Comes to Using Data for Digital Transformation?
Digital transformation provides an extraordinary opportunity for insurance companies. However, those same companies may face obstacles that delay the usage and leveraging of data. Among these issues are:
What Can My Business Do to Leverage Data?
For insurance companies, here are some recommendations for optimizing the opportunity for digital transformation:
Infogroup is a data company that can help insurance companies with their digital transformations by providing verified business data. Our Data-as-a-Service (DaaS) solutions help insurers by providing accurate and current information, including complex data sets, consumer insights and mailing lists. To learn more about how Infogroup can help with the digital transformation of your insurance company, schedule an initial consultation today.