Digital technologies are disrupting every part of our lives, from football to pharmaceutical.
There are huge opportunities from digital technologies specific to the insurance sector – at the heart of them is data. How data is assessed, secured and captured has never been more important. In particular, we see three areas where digital data is impacting the insurance industry.
The cost of fraud to the insurance industry is over £1 billion a year in the UK according to Association of British Insurers – reducing this figure directly contribute to pounds on the bottom line. Big data and analytics can reduce fraudulent claims from insights into customer interactions and behaviours across multiple channels.
A good example is whiplash-for-cash scams. Insurers can combine lots of information to identify potential fraudsters. Then insurers can focus on investigating claims that are more likely to be fraudulent, rather than at random or not at all.
Moreover, managing risk within the insurance sector has never been more important. More regulation has brought with it more paperwork, which increases the chance of losing documents, which can actually amplify risk. Document loss wastes precious resources and it can take months to figure out the consequences. Embracing digital technologies to manage that data is reducing difficult to control of paper-based documents and simplify the challenge.
Mobile technology can improve customers’ behaviour and reduce risk
The big data generated from mobile technology, particularly wearbles, means never has their been more potential for insurers to understand their customers individually. By analysing the information from an individual’s mobile device, predictions of risk can be made that are specific to that person based on factors like how active they are, which means premiums and policies can be tailored far more precisely to customers.
Going beyond that, insurance companies are now able to incentivise customer behaviour that reduces the likelihood of them claiming. For example, customers using wearable technology could have their premium reduced or receive rewards in accordance with number of steps they walk a day.
Make the most of social media
Social media can be far more than a marketing tool or customer service channel.
Today, brands can gather an ongoing picture of the sentiment for or against them by fully embracing social media. This means that business decisions related to brand can be made in real time, rather than waiting for customer research to take place.
Also, by augmenting traditional data with social media data, insurers can depend their understanding of behaviour and therefore risk. Then they can adapt models accordingly.
Underpin with business process management innovation
Seizing on these digital technologies will completely change the way you do business. But, they will all generate huge volumes of data that needs to been actionable. So, before you begin a digital technology project, think about the related data will be managed.