Insurers are driven by data to get meaningful insights into their customers, products, competitors, and the market. However, the real differentiation comes in how that data is evaluated through analytics and processes.
“The competitive landscape means insurers have to continually innovate and develop products more in tune with the needs of the customers than ever before,” says Kelly Preston, data analytics manager at SilverBridge. “Part of this development lies in understanding what specific customer segments require for specific needs. Unlike in the past, it is not a case of the insurer pigeonholing solutions and forcing customers into neat little boxes. Instead, customers demand more nuanced offerings that keep their individual circumstances in mind,” she says.
This puts the insurer under additional pressure to mitigate risks while still capturing market share. All of this happens in an environment that can adapt to new reporting processes and internal as well as external regulations.
Adding to the complexity is the emergence of new trends that are calling for the digitalisation of business irrespective of industry, size, and geographic location. And then there are technology shifts such as cloud solutions and real-time data analysis that further put the impetus on the insurer to balance the new with existing processes and systems often built on legacy platforms.
“The modern environment for an insurer is not an easy one to operate in. In addition to these technological forces, consumers have also become more fluid in their transition across demographics that see a great deal of pressure placed on existing insurance business models. Traditional insurers need to cater for new delivery channels (think social media, mobile applications, and the like), while competing against a spate of new entrants focused on younger investors.”
These new businesses are more flexible in how solutions are packaged and can also iterate quicker to cater for the demand for alternative products. But all is not lost for traditional insurers. They have the benefit of significant data to leverage on and years of experience in a market that is notoriously difficult to predict.
“Having data is one part of the puzzle. The insurers that will surface as leaders in these changing times will be those that are agile and sophisticated enough to seek a competitive edge with technology as the backbone. This does not mean decision-makers need to blindly implement the latest and greatest tech and sit back to reap the rewards. Instead, it is integrating the likes of real-time data analysis in a way that balances business intelligence with a commitment to customer needs. Of course, other stakeholders like partners and distributors need to be catered for as well in this new journey,” she says.
This can happen by embracing business intelligence and analysing data more effectively in real-time. In certain respects, this will also open the door to re-evaluating core business processes for growth and savings opportunities.