The modern digital age is one of lightning quick interactions, instant gratification, constant connectivity and unprecedented consumer demand – both in terms of availability of goods and services, and in terms of the level of quality and engagement that corporations provide. No company working in any industry today can hope to succeed without putting customer focus at the forefront of its business strategy. Driving this rise in consumer expectations is a single definitive cause: technological advancement. Customers expect more quite simply because more is possible. Technological advancement is necessitating dramatic changes in every industry – and the provision of insurance is no exception.
The buzz is all about ‘big data.’ In a survey carried out by Novarica asking top insurance company CIOs how they would spend an additional five million dollars in their IT budget – nearly a third of respondents answered that they would use the money exclusively for big data. Big data is a term used to describe a massive volume of structured and unstructured data that can be collated through various technological means. One of the newest developments in terms of data collection is the addition of sensors to a myriad of devices, from smart-watches to basketballs. These sensors collect and share huge amounts of real-time real-world information that it has never before been possible to harness.
This begs the question: “How can big data prove advantageous in the insurance industry?”
Sharing of data has already had a positive effect by raising the accuracy of risk-assessment and increasing the efficiency of underwriting by providing the ability to insurance carriers to quickly obtain information directly from official third-party sources, rather than having to rely on claimants to provide it. This is being taken one step further in the form of telematics and usage based insurance (UBI). Vehicles can be fitted with ‘black box’ technology that monitors the speed and safety with which the car is driven. Progressive patented a system of determining insurance premiums based on individual driver safety through analysis of data from black boxes. There is likely to be huge growth in this form of insurance this year and not only within the realm of motor vehicle insurance. With the ability to fit sensors that monitor whether doors and windows are locked when homes are empty, monitor heart rate, or monitor the regularity of workouts – home and health insurance companies could soon be looking to develop similar policies.
Insurance companies need to find a way to connect with customers beyond an annual statement and mobile apps seems to be a way to do so. The last year has seen the development of some incredible apps for smartphones – particularly in the line of health insurance. In a revolutionary move, Pact Health is offering its customers UBI discounts if they successfully commit to workouts planned at the beginning of each week. By instituting Pact Health on top of an existing policy, employers stand to benefit doubly as they are able to reduce business costs and encourage employees to maintain healthier lifestyles.
Another inspired app is the Matrix Absence Manager Tracker – released in August 2014. The new Matrix app allows employees to transmit absence claims, time sheets and other absence management related correspondence from a mobile device. Matrix is a subsidiary of the Delphi Financial Insurance Holding Group headed by visionary CEO Robert Rosenkranz. Rosenkranz is responsible for driving sales and providing strategic resources to companies under the group’s umbrella. Delphi Financial Group has been a forerunner in implementing technological advances into insurance policy through their subsidiaries for many years.
Insurance companies have always been leaders in using technology within internal operations. The game now is all about engagement, personalization and convenience. Insurance companies can no longer be faceless corporations that send out an annual statement. Times have changed, and it is now essential to turn new technologies towards providing consumer engagement and satisfaction in an outward facing manner.