While the pandemic slowed down many industries, in recent months those working in insurance have been busier than ever. Whether it’s related to business interruption and closures, or personal health and life cover, requests for new policies and claims just keep rolling in.
This influx of customer inquiries and general activity, as well as the necessary shift to a remote working model that organisations have had to adopt, has forced the entire industry to take stock. Many traditional processes and systems are no longer fit for purpose. As such, insurance institutions have had to adapt, digitising services in order to survive.
The pandemic has ushered in a new wave of innovation within the industry. In fact, recent research has revealed that insurtech saw record-breaking investor appetite in the third quarter of 2020, with $2.5 billion raised across 104 deals globally. As insurers continue to navigate the ever-changing climate, investment in modern technologies is only likely to become even more prevalent.
These technologies have the power to totally transform the industry, helping insurers to remain resilient no matter what is around the corner. However, the long-term success of any modern technology relies on having the right infrastructure in place to support it. In order to reap the future rewards, insurers will need to act today.
In recent months, many insurance businesses have had to embrace new ways of working. The previous reliance on face-to-face communication and physical paperwork has been overhauled, in order to comply with the latest government guidance and keep employees safe. As a result, modern technologies are being used to fill in the gaps.
For example, digitally-powered identification applications are increasingly being used as a substitute for face-to-face meetings with clients. Insurers are able to identify and authenticate individuals without having to be in the same room as them. Similarly, in an effort to limit direct contact with customers, some recent cases of property damage have used drones to collect the digital imagery to form reports.
Other insurers are using modern technologies in different ways. For instance, when it comes to life insurance, in-person medical exams were a common requirement pre-pandemic. However, the inability to conduct them throughout both regional and national lockdowns means that firms have had to find a new way to gather any medical information. Previous medical data, in its digital format, artificial intelligence and predictive analytics have all become key tools in enabling insurers to effectively assess risk and set rates.
Each of these technologies have one thing in common; they produce data. If 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 companies can’t effectively access and understand it.
The foundations for future success
Insurance businesses today are being met with a deluge of data. Whether it is medical records, clickstreams, or even sensor data in cars and buildings, every single piece of information needs to be accounted for when assessing risk. Traditionally, data integration – or the process by which users can make sense of data – has been a lengthy, time consuming process. Consolidating all data across an organisation in order to provide a single, unified view is challenging and, when new technologies are added to the mix, it can leave IT teams struggling to keep up.
This is why it’s important for insurance businesses to start from the ground up, adopting an architecture which is agile and able to accommodate both current and emerging technologies. A data fabric, built on data virtualisation, provides that adaptability. It connects users and applications to a single logical view of all information within an organisation, no matter where it resides. This means that insurers can access the information that they need quickly and easily, regardless of its format or location.
Data virtualisation also enables data to be conveniently accessed through front-end solutions, such as applications and dashboards, without the user having to know its exact storage location. This makes it quick and easy for insurers to expose data from multiple sources, while still maintaining governance and security.
The pandemic has brought about some fundamental changes to the way that insurers do businesses. Whilst not without its challenges, this has opened the door to innovation within the wider industry. No one can predict the future – the events of this year alone are evidence of that. However, by creating a solid architecture that can adapt and, as such, accommodate any future technologies, insurance businesses are putting themselves in the best position to face whatever comes next.
By Charles Southwood, Regional VP Northern Europe and MEA at Denodo