The insurance industry has had a reputation of being the curve technologically over the last few decades. According to an October 13th report from the Economist Intelligence Unit, that is, however, changing rapidly, as recent innovations utilizing Big Data and analytics is allowing insurers to reassert themselves as leaders in technology. In fact, insurers have already made great advances in areas such as predictive modelling, and are now also advancing rapidly in many consumer-related technologies.
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Insurers focusing on consumers
The Economist report highlights that insurers have begun to transition from their traditional focus around policies and lines of business and are moving toward towards meeting the needs of the consumer in the age of e-commerce. Efforts by insurance companies to meet expectations set by other industries are also coming into their own with the ubiquity of smart devices and mobile computing. The report notes: “Combined with advances in data processing, the proliferation of mobile and other devices has enabled vastly expanded sharing, collection and analysis of data.”
Big Data drives key innovations in the insurance industry
The insurance industry has had to rethink a lot of its business model over the last few years. This includes not only the value of internal and customer data, but also the very concept of privacy, as insurers today can even offer discounts for valuable customer information.
Key innovations related to the Internet of Things (IoT) such as telematics (the remote transmission of data over telecommunications devices) have already enabled insurers to offer discounts for relevant information. Wearable technologies and machine to-machine (M2M) or IoT capabilities are opening up new methods for data exchange that enhance underwriting and improve loss control.
It all boils down to Big Data. Insurance firms understand that to keep up with changing expectations of consumers, distributors and their own associates, they must have new sources of data and improved analytics in order to evaluate, price and underwrite risks more precisely.
The Economist report also points out that the constantly increasing reach and influence of the Internet are also leading to new distribution relationships and driving both insurance product and customer service innovation.