In our last posting, we discussed four trends we see as forming contours of a New Landscape for insurance technology in Canada. These are:
- Social Media Becoming Social Business
- Increased Penetration of Mobile Technology and Telematics
- Broker-Carrier Connectivity Debate Increases (and maybe concludes)
- Modern Technology Becomes a Firm Foundation (for further progress, not an end in itself)
We believe there is a megatrend that encompasses the others and is becoming a critical success factor for insurers and brokers. And here’s what that is:
Megatrend: Data and Analytics Become Critical Success Factors
As the soft market continues, leading insurance underwriters and distributors are pursuing intelligent data use as a high-priority competitive strategy. Improved use of more data through improved analytics is the common denominator of all of the trends described previously.
- Use of social media drives new and different data for insurance professionals from all disciplines; underwriting, sales/marketing, claims, strategy/planning, service, channel management. The tricks include distilling information from large quantities of structured and unstructured data, then using analytic techniques to frame the results in such a fashion as to inform strategy and action.
- Mobile technology and Telematics are all about data. At a simplistic level, when a risk manager is conducting an inspection with a location-aware device, recording an address is superfluous. At a more strategic level, the implementation of Telematics makes new data and information available – risk management, underwriting, pricing, and marketing – to improve insurance results. (Note ACORD has formed a working group to describe data standards for these data.)
- Broker-Carrier connectivity allows the movement of data among trusted trading partners. As data become more complex, proprietary, and time sensitive, the value of this connectivity increases.
- Modern technology based systems replacement projects are typically driven by efficiency goals, with data analytics an after thought. However, as we have noted, implementations which incorporate analytics into the initial design are yielding longer term benefits derived from more effective capture and use of data.
But capturing and using data is no longer straight-forward. As we wrote in August, the type, structure and amount of data from social media, location, etc., is overwhelming many data structures and systems. According to a recent survey by data collection specialists, Connotate, cited in emarketer, “the top challenge with Big Data was the time and manpower required to collect and analyze it.” New technologies combined with better employee understanding of statistical applications are required to handle and use this ‘Big Data’.
These four trends and the data megatrend are the core themes of the 10th annual Insurance-Canada Technology Conference, which will be held March 5, 2012 in Toronto. An expert faculty will present information in business terms and leading suppliers will be available in an active exhibit area.
The purpose of the day is to to help attendees determine where they stand on the New Landscape, and what strategies may be employed to further objectives. Details are available now. We hope to see you there.