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Editor’s note: This article is the second of a four-part series exploring the changes coming to the insurance product manufacturing process. Click for Part 1.)
If the last two years have shown us anything, it is that the world has changed. Digital transformation is no longer a luxury but a norm. Companies are becoming more and more creative with the ways they use emerging technology to complement their products, services, and delivery. In insurance, this means that companies will have the opportunity to be faster and more agile than ever before, should they embrace the innovations of today. Those companies, that use technology to their advantage, will win the race for wallet share, especially in evolving markets.
When predicting what 2022 will bring, insurers should be hyper-aware of the opportunities that third-party data providers can bring to your business. Not only can data innovation enrich the data collected by your organization, but developments in analytics and modelling tools can also elevate decision making processes to new heights. Datasets will be sure to facilitate much easier underwriting, perhaps becoming the most radical imminent change in the insurance industry.
Knowledge is power
In an industry dedicated to predicting and pricing up risks, knowing the most they can about a risk, before underwriting it, is essential. That is what makes these datasets so spectacular: they allow for an entirely new dimension of knowledge around a risk millions of miles away and perhaps months or years ahead of the insurer assessing it.
Not only are datasets powerful fountains of knowledge, but they are also now far more available than they ever were before. Companies are dedicating themselves to building specialized datasets for different industries and packaging all this knowledge in simple interfaces and easy-to-use, clickable features. Learning about the key risks affecting your customer has never been easier, and some have gone one step even further. The addition of AI capabilities can advance underwriting processes even further: machine learning and modernized systems can add a proactive and responsive element to insurance practices, improving business performance and differentiating an insurer by adding value beyond products. It is important not just to capture the necessary data, but to translate it into actionable insights, and companies that seize the opportunity to do this will corner new and old markets.
Finding the niche
When aiming to secure footing in new or emerging markets, datasets help insurers to capture niches thanks to their specific content. Ultimately, as insurers can move fluidly into new markets and offer high quality, targeted services, the end customer will benefit. Insurers will understand needs and price products more efficiently, looking at all the available data before even offering a quote. This kind of knowledge will allow for smoother and more seamless purchasing journeys for customers and easier underwriting processes for insurers. It’s a win-win.
Products built using the powerhouse of data analytics, on agile and customizable platforms, will be the most accurate the P&C industry has seen, whatever the niche. Datasets provide the strength and muscle to build out products with new depths of precision and specificity. Still, unless these products are implemented onto adaptable platforms, their ground-breaking nature could be capped by slow-moving systems. As datasets help insurers quickly underwrite risks, insurers must prioritize finding an intelligent and innovative platform to build new product lines and bring them to market with speed.
Just as data alone is not the whole package—it needs to be synthesized, and insights must be drawn from it—so these insights cannot deliver a fully-fledged product to an end customer. But by combining this transformative data with new SaaS-based solutions, insurers can liberate themselves from legacy systems and launch revolutionary products in a matter of weeks or months. Forward-thinking insurers will take advantage of every technological avenue available to them, riding the wave of digital transformation and merging data insights with intelligent product design to race ahead of the market as 2022 approaches.