WHY? Data driven decision creates an upside of from 6% to 9% of an insurer’s combined ratio - Source BCG Studies.
Which insurer can ignore that goal? To achieve it insurers must deploy next generation data engines but the good news is that these can be staged with fast results and longer term strategic benefit.
- Technology stack to capture data
- Generate insights through analytical models
- Integrate these insights in real-time with core processes
BCG say 30% insurers started projects but only 15% managed to scale them. Most likely they ignored constraints and were not focused enough.
- Structured data stores and data warehouses that are inflexible, costly, slow to adapt and not scalable
- Data silos- 75% of insurers lack a common data storage system and taxonomy which means they cannot access and analyse disparate data.
This means you are missing that 6% to 9% upside in combined ratios.
Take one aspect of insurance- claims management. Insurers that cannot access and analyse the documents, emails, photos, videos, dashcam footage that arrive in different formats and times. Wasted data that is vital for, amongst other goals, reducing fraud.
Some Motor and Home & Contents Insurers have already solved this issue with 360Retrieve. For example
- Interrogation and analysis of claims documentation including;
- Stage 2 and Stage 3 Settlement Packs
- Medical Reports
- Hire and repair accounts
- Historical 18-month back-load of documents.
Projects have delivered these success criteria: -
- The ability to ingest documents and “turn” all text in documents readable and searchable.
- Apply rules, search and apply watch parameters to documents.
- Deliver match return and output.
- Deliver additional identified fraud and uplift over and above Underwriting’s existing processes.
More than that, projects have unleashed the value of data from ecosystem partners such as vehicle repair networks, drainage and subsidence contractors, specialist repairers and restorers like carpets, jewellery .
These benefits are deliverable in the next 12 month period and set up insurers for the longer term success described in the linked BCG article. The key stages to success are:-
- Capture diverse and disparate types of data
- Integrate data with decision making
- Focus on ONE concrete initiative that delivers big results
- Strengthen data capabilities
- Stage the process
- Choose capable and proven technology partners- in digital claims 360Globalnet is one such solution
Are you going to ignore that 6% to 9% combined ratio uplift or take action now?
In today’s insurance industry, every link in the value chain—whether it be product development, marketing, underwriting, pricing, client servicing, or claims management—is becoming a data-driven play. That isn’t surprising. According to BCG studies, data-driven decision making creates an upside of from 6% to 9% of an insurer’s combined ratio (a key profitability measure calculated by dividing the sum of an insurer’s net claims, commissions, and expenses by its net earned premium income).