General Insurance Article - The data divide and the digital ready culture

Comment from Jerome Bugnet, Senior Manager, Solution Engineering at MuleSoft:

 The data divide
 While many insurers have already been taking steps to unlock the value of their data this year, we’ll see that taken to the next level in 2021 as they continue to identify the ways in which data-driven insights can improve the experience for their customers. However, this is still much easier said than done for many insurers. Unlocking the data that powers seamless, connected experiences for customers requires a high level of data agility, which many insurers aren’t equipped for.

 This needs to change if insurers are to use data more effectively to power growth and create more seamless digital experiences in 2021. According to our research, 59% of organisations say the inability to connect systems, applications, and data hinders customer experience. This is largely the product of storing valuable data in disparate silos across the business, making it difficult to draw insights from them to power more personalised customer experiences. As such, insurers will increasingly look to API-led connectivity to help them bridge this data divide.

 The potential of this approach for insurers is huge, particularly since the insurance industry arguably has more opportunities to use data for greater personalisation than others. For instance, we’re already seeing motor insurance providers explore ways in which they can aggregate data from various external sources, such as the driver’s social media channels, or telematics devices. If used effectively, this can enable insurers to build a more informed perspective on the risks the driver faces, based on the route they take into the office, and whether they have a more cautious temperament, and offer them lower premiums as a result. Taken one step further, this principle even allows insurers to start to move away from a focus on protection alone, and towards a focus on preventing incidents before they take place. Armed with the right customer data, along with data from third-parties on areas such as potential hazards along the customer’s route to work, insurers can predict where incidents are more likely to occur, and help their customers avoid them.
 The digital-ready culture
 Insurers of all types have been under pressure to digitise their services for some time. Yet in the wake of COVID-19, this pressure has ramped up substantially. Customers increasingly expect to interact with their insurance providers in a manner that suits them, and with the flexibility to be able to switch to other channels seamlessly. The way in which insurance products and services are delivered is changing as a result. According to our research, almost half (46%) of customers would embrace digital replacements for physical services in the long term.

 In future, customers won’t be satisfied with lengthy, manual processes such as filling out claims and quotation forms, they’ll expect experiences such as the ability to make an instant claim by sending a photo of an accident, or property to be insured. They may even expect that there’s no need to interact with their provider at all, since insurance services can be bundled in with other products they’re buying, such as internet-enabled home security products.

 Yet for many insurance providers, integration challenges still hold them back from realising this vision. This largely because many insurers still rely heavily on a combination of largely paper-based processes and sprawling legacy IT estates. As such, they typically struggle to integrate various sources of data. In 2021, we’ll see more and more insurers look to APIs to get around these challenges. Through API-led connectivity, insurers can quickly and easily integrate their various sources of data to build the type of sophisticated experiences that customers increasingly demand.

 This works on two levels. Within the organisation itself, all of the insurer’s digital capabilities are published as discoverable assets that anyone within the company can discover and use to work on their own digital projects, enabling data to flow across the organisation seamlessly and helping to quicken the pace of innovation. Better still, the insurer’s digital capabilities are exposed to third parties such as insurtechs or other platforms, which can build their own products and services on the insurer’s data. In this way, the insurer can position itself as part of a wider ecosystem, adding itself into new value chains that enable it to reach a wider customer base.

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