TECHNOLOGY
“ Colocation can be an attractive solution ; providing the extra capacity required , while also enabling insurtechs to benefit from fast , secure and direct connections to cloud service providers ”
MARK WHITE TELEHOUSE EUROPE
challenging . Under GDPR , ' the right to be forgotten ' ( when a customer leaves the company and their data must be purged ) can make this more problematic and error-prone .
• Cost of data . IoT-linked devices produce mind-boggling levels of data . Cisco estimated that IoT devices produce 500 zettabytes ( one zettabyte is one trillion gigabytes ) per year . This has a real cost . Of course , some smart data management techniques exist with cloud technologies , such as compression and purging - but these are band-aid fixes rather than true data management strategies .
• Volume of data . The challenge is to ‘ find the needle in the needle stack ’, as it has been described . The level of processing and time required to find ' reasonable ' results often prohibits insurers from taking advantages of real-world operational cases such as motor claims with a 24-hour response to First Notice of Loss .
Model explainability and basis . The increase of modern machine learning techniques , which include neural networks , have dramatically improved our ability to understand sparse and complex datasets . However , there are still challenges with the explainability of such models ( particularly in underwriting and claims management ) from a regulatory point of view .
“ There ’ s also an increasing focus on the alignment of inclusion and diversity in these models ,” Haywood says . “ That means ensuring models used for analysis are ' basis free ' and not hindering ( or benefiting ) certain groups based on external factors such as demographics .”
Technological breakthroughs in insurtech As technology marches forth , connectivity will play a major role in turning insurtech into a mainstream service , increasing its marketplace space from 2 %, to the dominant force in the industry .
White says , “ 5G will offer many benefits for Insurtech companies including reduced
112 March 2022