Innovation has, for a long time, been associated with new products and or processes. In the last decade, this view has been evolving to accommodate the idea that innovation can be related to any part of the value chain. This includes the development of new products and services, distribution channels, business models, rethinking ways of working, monetization, or management styles.
Amidst this rapid transformation, has been the requirement for businesses to respond accordingly, particularly regarding their use of technology for growth. Many organizations have embarked on digital transformation in varying forms and levels of success. Today, the market-leaders across all sectors apply digital technologies in improving their operational excellence and, ultimately, business performance.
Meanwhile, as businesses and organizations go through this transformation what was once a by-product of digitalization has created a new currency– data. As companies go digital, they gain numerous opportunities to collect data about their internal operations, the industries in which they work, and the consumers of their products, services, and experiences. The practical interpretation and management of this data are what sets the leaders apart from the rest.
In the coming years, data will continue to define the direction that industries and economies take, and in this article, I offer my prediction of the digital trends affecting the insurance sector, with a focus on the collection and consumption of data.
1: Stricter policies regulations on data
This is already happening, however, there are indications that many players in the industry may have delayed their reaction to the changes in regulation surrounding data. In Kenya, the Data Protection Act of 2019 provides guidelines on market conduct in relation to data privacy. This is a great place to start for those who may find the different communication around data privacy overwhelming.
Data has always been a key component of the underwriting business, and the process of its collection and management will continue to fall under the scrutiny of policymakers and government authorities. The insurance sector is heavily driven by personal data, and we will continue to see more regulation informing its access, usage, transfer to third parties, and liability for misuse.
2: Soaring demand for data management specialists
In the competitive insurance industry, data quality and management are instrumental for sustainable growth, and compliance requirements. The development of strong data management policies within companies thus remains invaluable in an industry where it is required players to have a strong business intelligence strategy.
Insurers will continue to require specialists in data management to enhance their collection, analysis, and integration of insights into their business operations. Data protection and privacy officers, for example, are increasingly in demand to provide guidance on regulatory compliance. Data analysts, data scientists, and data trainers – to upskill other staff on data management – are the other groups of specialists being sought by companies. Companies will need to do more to accommodate these new roles or upskill existing talent.
3: More innovations around customer relationship management
Many insurance companies have implemented technologies to automate and improve their back-office processes. The next level requires them to embrace modern customer relationship management (CRM) tools, to help build their competitiveness through gainful insights on their customers’ interaction with their products and services. The CRM brings all the customer data into one place, including all the transactions made. Newer CRMs have integrated data technologies for the predictive management of client relations, and thus help in the effective management of risk, product development, and customer service.
4: The sustained rise of insurtech
The rapid uptake of digital technologies has brought forth opportunities for app-based insurance products, as innovators gain the (consensual) capability to tap into personal data and create products that reduce the risk for insurance providers and their customers. In 2023 and beyond, we expect to see insurance companies leverage the latest in real-time and predictive data technologies to develop customized coverage and pricing solutions for their different clients.
5: Artificial Intelligence, Machine Learning, and the Internet of Things
In 2023 and beyond, we will continue to see an overlap in various technologies, including AI, machine learning and IoT all of which rely on data to increase efficiency and accuracy. Insurance companies will continue to advance their products through the integration of different technologies that improve both their back and front-office operations, as well as their engagement with customers. Machine learning, for example, is getting clever in the automation of claims, a feature that is important for companies that desire to lower their operational costs.
There will be many more advancements in insurance technologies going forth, but it is definite that all will be founded on the development of strong data systems. The implication of this transformation is that insurance companies will become more efficient and more relevant to customers in terms of product offerings and services. This will hopefully improve insurance understanding in the market, relevance and eventually penetration.
The writer is the digital marketing manager at Old Mutual