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Data and the Future of Insurance

Posted on January 27, 2016 by Guy Weismantel

 Digital Insurer Blog

Did you know 92 percent of the world's data was created in the last two years?

There is more data out there than ever before -- and it has the potential to transform the entire insurance industry. Surprisingly, only 21 percent of insurance companies have invested in large pools of data that provide insights and intelligence into everything from customer purchasing behavior to fraudulent applications. However, you should expect data technology to revolutionize the way insurance agencies and carriers do business in the future. Here are three ways data could benefit an insurance agency.

1. Improve the Customer Experience

In insurance, there's no "one size fits all" policy. Consumers, from millennials to pensioners, seek financial products that suit their circumstances. Insurance companies can streamline the application process by using predictive analysis, or by offering services based on customer trends and behavior. Large amounts of data can tell an insurance company about a customer's previous financial history, other past financial products, and lifestyle changes that might influence their purchasing behavior.

2. Prevent Fraud

Despite security and privacy concerns, data exchange is a powerful weapon in risk management. Insurance companies can identify high-risk individuals using the latest analytics. These insights have the ability to reduce fraudulent claims during the application process since data can be used to identify claims made to several providers and ascertain the number of insurance claims made by the same individual. Fraud is becoming a bigger problem for many insurance providers -- in fact, 4,000 fraudulent car insurance applications are made every week in the UK alone. Data can help minimize these potential losses since underwriters have access to a larger pool that can identify patterns and trends in real time.

3. Streamline Sales and Customer Service Tasks

The effects of modern data technology are far-reaching and can influence staff throughout an organization. Large quantities of data can be beneficial for sales and customer service staff who interact with consumers via phone or email. With access to a Customer Relationship Management system, sales teams are able to use data to up-sell or cross-sell insurance products, while customer service teams can use the information when dealing with queries. Front-line staff can prevent data decay -- when changes in customer information occur over time, rendering data useless -- by confirming addresses, telephone numbers and other contact information at point-of-contact.

Whether it's liability insurance or home coverage, the benefits of data exchange are twofold. Not only does data technology improve the customer experience, but it can also help underwriters assess risk and prevent fraud. As data becomes more detailed and comprehensive, insurers can communicate with customers more effectively and provide customized financial products.



Mr. Weismantel is the Vice President of Marketing at Vertafore. With 20 years of marketing and financial leadership in companies such as Microsoft, Business Objects, Baxter HealthCare, Caremark International, and Expedia, Guy’s career has focused on bringing differentiated products to market and providing the “compelling reason to purchase” for customers and prospects alike.


Guy has a Bachelors Degree in Accounting from the University of Notre Dame, and a Masters Degree in Business Administration from the Kellogg School of Management at Northwestern University.

 

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