Data is critical to the insurance industry . It can be the difference between identifying risk and not ; pricing policies correctly and not ; retaining customers and not . Traditionally , legacy systems and siloed ways of working have prevented insurance organisations from making the most of the data they collect and store – but , to transform the industry meaningfully , insurtechs and incumbent insurers must get to grips with their data .
Are there holes in insurers ’ data collection practices ? When it comes to making better use of data , the first thing insurers can do is reassess what data they already collect . Is every datapoint you collect necessary , and are there things you ’ re not collecting that you really ought to know ? Data creates an allencompassing picture about the customer and the nature of the risk you ’ re insuring , so collecting the right data is a critical first step in the lifecycle of a policy .
Chris Royles , EMEA Field CTO at Cloudera , says : “ Data is vital to helping insurance companies understand their customers and assessing risk . Today , there are many data sources that simply weren ’ t available a decade ago . From ‘ intelligent ’ vehicles reporting accidents in the moment and IoT devices monitoring buildings , through to the use of real-time weather data to model risk more accurately in shipping insurance .”
So what information could insurers collect , but don ’ t always , that would improve insurance decisioning or reduce risk for the underwriter ? David Sexton , VP & Head of Insurance Practice UK & I for Cognizant , believes that insurers are slowly bringing connected devices into the data mix .
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