29th June 2014

Newslink Opinion: Transforming data into intelligence-the insurance industry's challenge

Opinion

• Tweet
• Share on Facebook
• Share on LinkedIn

The theme of the 50th International Insurance Society Annual Seminar held in London this week was "The Impact of Science & Technology on the Industry", a bold but timely subject.
The 400+ senior management delegates from around the world voted the top issues facing them were achieving adequate returns on investment(26%), finding new markets(22%), and, significantly, applying risk analysis in business decisions 21%).
"Data" and "digital" loomed large as key words in many of the presentations. There was much advice for the delegates from experts on digitisation, big data, and the growing threat of cyber risk which is closely associated. The insurance industry is regarded generally as behind other sectors on these developments but yet is totally dependent on analysing data, and is now having to catch up with customer-led digital demand.
As the industry becomes more global, the challenge increases. The gap has existed for many years between the information technology "boffins" and the insurance specialists, and whilst that has reduced as back office systems increasingly meet front office development, the "outer office" revolution of multiple channels, straight-through processing and mobile and telematics growth, strongly indicates that all have to be more closely involved. The changing business issues and opportunities have to be continually assessed with technology solutions and customer "mindset" also in endless change, but business and regulatory strategy must be paramount.
This has to be the age of the business analyst who is the middleman to enable data to be transformed to intelligence, encouraging quicker, better, decisions by all, and aiming to improve service levels, customer satisfaction and retention, quicker product delivery, and improving profitability.
A good example of understanding and mastering this sea change is the way the industry is tackling the increasingly demanding regulatory scenario. Cross-border regulatory requirements such as Solvency II in Europe are rippling across the globe and the IIS delegates are rightly concerned about many of the issues that have been raised. The increase in globality, the new regulatory challenges, and the digital/data revolution are all related. New risks such as "cyber" and "reputational" will need to be taken into account, and the whole enterprise has to be involved in making the most of the regulatory changes-wider than a financial and actuarial focus, with a larger role for risk and line management.
Congratulations go to the IIS for its foresight in providing a platform to hear and discuss these key challenges and opportunities.