Amid the dynamic technological landscape, it is imminent for all insurance firms and involved stakeholders to understand the importance of data, layered with security measures. And it isn’t just a mere statement; according to a recent report, the global insurance IT market investment, including insurance management softwareand other such technology platforms, is projected to touch USD 1,105.6 billion in 2033, a growth of 10.6% from the year 2024.
This brings us back to the hero: ‘Data’ as it is at the core of each of the deployment and security of all these new-age technologies while acting as the key driver for creating impactful improvements in business operations. However, these advancements have made data more vulnerable, affecting major operational areas of businesses, and impacting consumers and employees alike.
To mitigate such breaches, insurers need to adopt a proactive approach, a combination of both analytical and objective methodologies, to operate more efficiently.
But here’s a different take on the insurance industry being driven by data; it isn’t only about data and the value that it brings. It is, above all, about people. To ensure a successful transition to become a full-fledged data-driven insurance firm, it is imperative to create awareness about the data culture.
It is about bringing each employee from all hierarchy onboard with data, technologies involved, and how they will impact every individual. Creating an open mindset where an employee can easily see and experience the value in insights gained from data and act accordingly is the most apt way to encourage them to utilize data and various insurance industry software.
Creating A Data-centered Culture in Insurance Industry with a Four-Pronged Approach
Transforming the Mindset Through Insurtech
As a traditional industry, although the insurance sector was relatively slow to modify its operating models and getting insurance professionals to leverage data, there has been a significant momentum gain industry-wise. To deploy actionable insights, insurers need to explore paths that data can bring new transitions in the industry. For instance, in the US, approximately 1 homeowner out of 20 files for a property insurance claim annually.
Understanding the pattern behind this number through advanced insurance company software can help insurers make data-driven and customer-centric decisions. Insurance firms should have a clear idea about their goals, then use the data to make those improvements while measuring the performance against the established KPIs, including overall impact on revenue generation.
Though this can be easily achieved through insurtech, it is crucial to follow a detailed approach toward insightful innovation, a strategy that can make the most significant impact. Additionally, insurers also require proactive claims management through a digital approach that is not forced upon, rather solutions that fit the comfort level of customers.
Deployment of New Technologies and Tools
Meeting the requirements of policyholders requires the end-to-end automation of core insurance operations through new tools and technologies such as cloud-based insurance software. Although Microsoft Excel can serve the purpose of data analysis for insurance analytical users, it can be overwhelming for non-technical marketing teams.
Similarly, non-intuitive mapping features can turn out to be roadblocks for non-data-driven teams. Insurance leaders are now more inclined towards simple graphics that empower them to make crucial decisions in minutes. Augmented platforms leverage technologies like automation and artificial intelligence (AI) to address these challenges, aiding employees to focus more on customer-centric activities.
However, it is important to pay equal attention to data security while using such tools. For instance, an insurance analytical team using ChatGPT to gain microscopic insights might want to rethink. There are studies showing employees prompting GPTs with business-sensitive data, an action that may lead to proprietary data leakage and breach of personal identifying information.
Innovation Workshops & Data Labs
In the insurance field, most of the digital transformation initiatives, especially Artificial Intelligence (AI) and Machine Learning (ML) ones were left behind on the proof of concept or prototype stage as the focus was more on the technical aspect rather than the solution one.
However, traditional boundaries are becoming non-existent, a fact insurance firms should think about while developing such data-driven models. It is critical to brainstorm over current technologies and upcoming trends as it is the space for potential innovation and solutions. This understanding can lead the formation of innovation workshops and data labs, covering aspects such as –
- Understanding development
- Idea generation and innovation roadmap creation
- Solution validation and decision making
These aspects provide a company-wide innovation platform and make ideas available in MVP form within a very limited time. Being an internal unit, these data labs facilitate close collaboration between key insurance departments, data scientists, and knowledge developers to generate new data-driven products and business ideas.
Role of Leadership in Encouraging Data-Centered Culture
Implementing suitable technologies, tools, and processes to encourage and augment a data-centered culture, in an insurance business begins with the organization’s leadership. Deploying new software for insurance company management and involved processes equates to training of employees/users on these new platforms while ensuring the confidentiality and security of customers’ data.
It is imperative to understand that data security begins with an individual employee and the creation of a culture where security is paramount, initiatives must trickle down from the top hierarchy. Building an innovative and collaborative team that is equipped to utilize the best available technology is the added advantage that every insurance firm desires.
Being business leaders, it is their corporate responsibility to ensure that the deployed technologies and software are strictly in adherence to local, state, and national regulations to safeguard customers.
Final Thoughts
The road of shifting the mindset of the otherwise traditional insurance industry to see data and technology from a new perspective was a long one filled with hurdles. Insurance firms have slowly yet steadily utilized new technology platforms to meet the dynamic requirements of new-age policyholders while delivering exceptional after-sales services. By putting efficient leadership in place before the tech deployment phase, insurers can successfully kickstart their digital transformation journey. And this in turn equates to achieving long-term success, a highly data-driven culture within the organization that puts its customers at the center of whatever it does.