Data-driven innovation in the insurance sector

Data is a core input to the insurance sector where it is used to calculate and put a price on risk. While established insurance brokers and underwriters may be experts in risk management, new entrants are leveraging new sources of data and analyzing it in ways which are transforming the sector. Incumbents have an advantage in terms of the data they already hold and the trusted brands they manage but a number of the largest firms are partnering with data-driven startups to create innovative products and services.

4 key parts of the insurance value chain are being transformed by the application of data: customer prospecting, risk calculation, application process streamlining and the creation of new business and revenue models.

Finding and helping customers with data

The web is awash with the data users leave behind as they use search engines and post and share content across social media platforms. Tools for social media monitoring are widely available and allow companies to track when keywords are used across a range of social platforms. Responses can then be tailored to respond and offer suggestions for possible products.

Consultants, Accenture Interactive recently created a social media listening service for a major US insurer using the Salesforce Social Studio suite of applications to allow the company to monitor in near real-time what was being said about them online. The result was a system that allowed the insurer to view social media comments and posts mentioning them within 10 minutes of posting and join in the conversation where appropriate.

Calculating risk from a selfie

In 2016, Legal and General America partnered with startup Lapetus Solutions to allow consumers to apply for life insurance by simply uploading a selfie. Their SelfieQuote service claims to be able to estimate an applicant’s age, gender and body mass index (BMI) from a single photo. It uses Lapetus’ AI-based facial analytics platform to streamline the application workflow and normally lengthy form filling for such a process. While this may appeal less to more mature consumers, the company hopes it will be attractive to a more tech-savvy audience that may not have previously considered life insurance.

Recent research from McKinsey indicates that while 70% of people may go online to start gathering information about life insurance options, fewer than 30% go on to complete the purchase of a policy online. As a new generation of digitally native consumers enter the market, companies in all sectors need to be sure they are not putting barriers in the way of bringing them on board.

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