Other parts of this series:
Insurers are facing change that is driven by big data. In my previous post on this topic we viewed the trends connected to data that are reshaping the insurance industry. We also noted the good news: Big data is not only driving change, it is a key element to helping insurers embrace change and move forward.
But what are the action steps for insurers? First and foremost: Set the right focus!
Have business users own their data
New technology such as SAP HANA®, Hadoop® or NoSQL/NewSQL database solutions let business users find meaning in data with minimal support from IT. Business users can gain better time-to-market, increased customer insight and improved internal risk and performance reporting.
- Use flexible actuarial data models: Reporting environments linked to model governance applications covering regulatory requirements and market demands, as well as contributing value generating data for developing new products for new business segments.
- Introduce new finance and risk data architectures: New finance and risk enterprise data storage technologies for a harmonized, integrated and advanced data and analytics capabilities (e.g. based on “data-lake” scenarios) to deliver consistency in regulatory reporting requirements and more granular analysis and steering.
Digitalize the insurance business model
Data governance, processes and components support integration of new data sources into finance and risk processes, helping to properly assess current risks. This integration also helps identify and evaluate potential new risk sources. Digitalization can mean:
- Improved risk selection and policy pricing
- Streamlined risk assessment and refined underwriting policy
- New, individual and personalized products for automobile, life and health offerings
- Increased customer performance intelligence and digital channel interaction
Protect corporate and customer data
Insurers should work to understand emerging cyber risks and implement effective strategies to either prevent attacks from happening or take appropriate actions to reduce the impact of cyber attacks. They can identify and monitor cyber risk exposure by supporting an internal reporting system designed to increase awareness among senior management.
Unleash the power of automation
Insurers should leverage their digital data to streamline processes through adequate risk and finance integration. Insurers can make use of these tools and strategies:
- Integrated reporting framework: A finance and risk data model and reporting framework to automate the reporting process across multiple reporting standards and systems.
- Data flow automation: A finance and risk data model enabling performance management of the entire company through a solid data governance framework (processes, architecture, data quality).
- Robotics: Rule-based, cognitive automation of financial closing or risk assessment processes through data governance, standardization and quality management.
By using these tools and strategies, we have seen insurers save up to 80 percent of their processing time and free scarce resources to support their journey to become more profitable and efficient businesses.
In the next blog in this series, we will take a closer look at how “big data” is affecting data management for insurance, especially in terms of data governance, data protection and metadata management.
For more information, view our presentation: A New Approach to Data Management in the Digital Era