Skip to main content
News

How brokers can future-proof their businesses

How brokers can future-proof their businesses | Insurance Business UK

Bringing brokers along on the journey to developing predictive capabilities

How brokers can future-proof their businesses

Technology

By Mia Wallace

From risk assessment, to fraud detection, to customer insights, to claims management, to regulatory compliance, to market analysis, to forecasting – the uses of data analytics are vast. But what’s behind the evolution of data analytics and how can insurance brokers harness these advantages?

At its core, insurance has always been a data business, given that the ability to understand and price for risk is dependent on having access to the right information.  Broker Insights’ president Fraser Edmond (pictured right) and chair Chris van der Kuyl (pictured centre) highlighted how data has evolved to embrace its predictive capabilities. “To utilise decision intelligence, you have to have a robust data set,” Edmond said. “You cannot take for granted how poor the data quality has been in the industry.”

Using data insights to positively enhance more traditional industries is a clear opportunity, van der Kuyl said, but he warned against taking either a technology-first or insurance-first approach to building solutions, citing the need for a blended approach. “You can impress people with numbers until your heart’s content but if it’s not useful and it doesn’t help them make better decisions in their business, then you’ve failed,” he said.

What’s preventing the move to decision intelligence?

Challenging the use of decision intelligence are “unbelievably poor” data flows and the “tired technology” that sits behind the ecosystem as it stands, according to Edmond. He underscored the lack of understanding that exists within insurers and brokers; with insurers not understanding the brokers and their customers, and the brokers not understanding the insurers and their risk appetites.

In addition, the old adage of poor data in, poor data out still applies. Unchecked and unmanaged data increases the potential for output inaccuracy. A clear data strategy is vital – one that incorporates all aspects of the business, from complaints and regulation to the technology that enables it, to the business users in pricing, underwriting, claims and fraud who depend on it to make better decisions.

Rich Tomlison (pictured left), MD of Percayso Inform, highlighted that outdated technology can, at best, make things difficult, costly and time-consuming to make improvements to business processes. “At worst,” he said, “[it can] prevent businesses from improving and adapting meaning they’re unable to compete with more dynamic rivals who have made the leap to new, more flexible and configurable platforms and processes.”

Can brokers embrace the future?

Empowering brokers with enhanced capabilities is instrumental to ensuring there will always be a strong independent broking market in the UK. And the benefits of doing so extends to clients, as they’ll be supported by brokers able to assign more of their time to focusing on customer outcomes and finding them the right cover at the right time.

Looking to the future, Tomlinson noted that: “It’s often said that insurance is a data arms race in terms of access to new and powerful datasets predictive of insurance outcomes. We see this continuing.” The question now is how best to test and ultimately fuse these new datasets into current data, pricing and fraud strategies and to assess how new and existing datasets be used optimally in combination.

Edmond and van der Kuyl both noted that brokers across the UK market seem to be engaging in conversations about where decision intelligence goes next and are keen to be part of that journey. Tomlinson also highlighted his optimism and his confidence that brokers can embrace this future. “We’re already working with many who are making giant leaps forward,” he said. “The opportunities that new, flexible, SaaS platforms deliver to brokers are plentiful allowing some that may have once been deemed laggards to leapfrog others once seen as cutting edge in the space of months.”

Where next for insurers?

What is clear amid broader industry discussions about data intelligence is that it is those insurance businesses which harness the opportunities it presents who will emerge as the market’s ‘winners’. And predictive capability is especially under the spotlight right now – it is what will allow insurers to focus on the risk they’re most likely to win, with all the implications this brings for enhanced underwriting and trading efficiencies. The flip-side of the solution is the advantages it presents to the broker market by allowing brokers to target their proposals to insurers likely to write the risk – and write it well.

“The question is, can these companies afford not to embrace this knowledge,” Edmond asked. “Because those that do are really going to stand out from the crowd in the future.”

Related Stories

LATEST NEWS


Source

COMPLAINTS