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Data and the Evolution of Insurance

Monique Hesseling, managing director of insurance at Cloudera, tells us about the big role of data in the evolution of the insurance sector.

3 mins readApril 06, 2021
Data and Insurance

“95% of the insurance carriers recently surveyed by Deloitte indicated that they are already accelerating or looking to speed up digital transformation.”

The data that is now available to help insurance companies better understand, assess, and anticipate an insurance customer’s needs has increased exponentially with advances in technology and digital interactions. Insurers that make the most of this data are best positioned to serve small business customers, especially in uncertain economic times.

Insurers maintain an abundance of traditional data about their customers that forms the foundation for risk profiles. This data can now be complemented with real-time information from new data sources, to better inform and predict insurance needs, exposures, and losses. These sources include sensors (driving patterns, physical fitness), social media streams, weather, location tracking, traffic updates, and news feeds. Classic data sources in underwriting and claims can now also be augmented with photos and videos, as well as voice analytics.

Digital interactions were on the rise prior to the pandemic, and that acceleration will continue. 95% of the insurance carriers recently surveyed by Deloitte indicated that they are already accelerating or looking to speed up digital transformation (Deloitte, 2021 Insurance Outlook). They are assessing new technologies, ML/AI, and alternative data sources to augment both claims and underwriting. Using additional data sources and advanced analytics enables insurers to provide the best possible products, services, and prices to their customers.

Improved Customer Service

Customer service includes a range of capabilities: customer call centers, self-service, website inquiries, and—most important—claims handling. Insurers can offer superior customer service by enabling better protection and prevention, using the breadth of data available to them.

  • Sensors / IoT (Internet of Things) data can:

  • Track behavior to help ensure worker safety in industrial/manufacturing workplaces or while traveling.

  • Track physiological data, like insulin levels or heart rate, and alert individuals to act when needed.

  • Help prevent falls, by assessing environmental risks and delivering real-time localized warnings.

  • Geolocation data can be used to alert an individual traveling into a location where there is an unfolding emergency.

  • Telematics can be used to respond to a traffic accident more quickly or to assist a driver in safe route planning.

  • Account maintenance activities like adding a dependent or changing beneficiaries should trigger further assessment for education savings, additional life insurance, key man insurance, or succession discussions.

Enhanced Underwriting

Enabling enhanced analytics of multiple data sources to gain insights can support a more comprehensive profile of a customer. This can lead to more competitive pricing and personalized, relevant coverage for a specific business or personal risks. For example:

  • Sensors that track driving behavior can be used to reward safe drivers, and geolocation can complement that behavior by recognizing locations that are considered safer, and by monitoring and tracking optimal routing.

  • Utilities data can be utilized to assess and predict the use of fryers and other cooking equipment in restaurant kitchens, to support individualized risk assessment and pricing.

Expedited Claims Processing

The time that it takes an insurance company to process a claim directly impacts customer experience and ultimately reflects on an insurer’s operational efficiency. Claims processing has been evolving with the advent of new technologies, but there is still an opportunity for further advancement.

  • Drones can supply video footage of natural catastrophes, providing necessary information to accelerate claims payouts that assist customers in need of basic supplies, and help get businesses up and running again more quickly. An increasingly common example of this is roof damage assessment.

  • Machine learning applied to image analysis can expedite the resolution of accident claims; car or supplies damage, for example. Machine learning can also help reduce fraud by identifying anomalies—benefitting both the insured and the insurer’s bottom line.

Small Businesses Benefit

Small businesses don’t have time, money, or resources to waste. They require personalized, real-time, flexible services—whenever, wherever, and however it suits them. Interactions with an insurance carrier or broker must align with the demands of their business, even when their needs change often and quickly. Therefore, small businesses should seek out and realize the benefits of these advancements from their insurance carriers.

Understand Your Business

Every small business has a unique profile: location (or virtual), number of employees, industry type, related regulations, etc. Insurers tend to have standard approaches when it comes to assessing a customer, but are they making that assessment with a proactive, data-driven methodology? For example, do they understand the unique business dynamics? Do they insure similar businesses? Do they understand the supply chain and customer base? Are telematics and geolocation incentives offered?

A small business does not have time to be understood after an incident has occurred. The time it takes to pay out a claim can mean all the difference in making payroll and/or re-opening.

Small Businesses: Shop Wisely

Excellent customer service from their insurer is a critical factor for small businesses. With the increase of digital interactions in all aspects of life, insurance companies have already implemented new technology to meet customers on their terms. Insurers now offer a wide range of capabilities to serve their customers quickly and efficiently. It’s worth taking the time to understand the digital capabilities of prospective insurers in areas such as online services, chatbots, portals for inquiries and claims management, on-demand updates on underwriting, service or claims status, and virtual/off-hours meeting options. Just the experience of seeking information on the services offered will provide a good indication of the overall experience to expect going forward.

Both small businesses and insurers must continuously innovate to better serve their customers. To be successful, any size or type of business needs to be continuously aware of the changing needs of their customers. To continue operating during the pandemic, all businesses have had to adjust, and increased digital interaction has been a large part of that - digital orders and payments, working from home, supply chain adjustments, contactless delivery, etc.

These digital interactions provide a wealth of additional information about their customers. Analyzing all of this data, while maintaining its integrity and protecting its privacy, will ultimately result in better business and bottom-line improvements.

Author's Bio:

by Monique Hesseling, Managing Director of Insurance, Cloudera

Monique brings insight and expertise in both business leadership and data strategy to her role at Cloudera, where she works with insurance clients to optimize their use of data, analytics, and machine learning across the enterprise. Monique’s career has primarily been in business leadership and data and analytics roles in insurance, working for companies including AON, Chubb, Mutual of Omaha, and Zurich Financial Services. Connect with Monique on LinkedIn.

Author's Bio:

Timothy Carter

Monique Hesseling, managing director of insurance at Cloudera, gives us some insights on the big role of data in the evolution of the insurance sector.