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From Lost Opportunities to Unfair Advantages in the Insurance Industry – Bridging the Gap with Technology

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Prove
September 22, 2021
From Lost Opportunities to Unfair Advantages in the Insurance Industry – Bridging the Gap with Technology

Efficient data management – The cornerstone of innovation in the insurance industry

The insurance industry constantly changes to accommodate complicated new regulations and a changing competitive landscape. As data-driven insights become increasingly precise and personal, insurance companies can offer more customized products to consumers with greater efficiency. That efficiency, however, is contingent on critical components: data quality, organization, and management. Additionally, increasingly available diversity of data coupled with a rapid pace of advancements in the ways to organize and analyze it allows insurers to discover opportunities and tune existing propositions.

Although more technological innovations are available than ever before to minimize risk and maximize profitability, manual processes and paper still permeate the industry’s business practices. Unstructured documents such as Word, faxes, PDFs, and spreadsheets are widely used as key inputs and systems for core business activities.

Some of the biggest challenges organizations face when it comes to unstructured data include:

  • Managing and extracting value from the influx of unstructured data
  • Processing these huge volumes of data as quickly as possible
  • Finding new and innovative technologies within their industry

Even with their ease of development and deployment, it is very difficult to manage vast amounts of data without error or consequence with basic tools (like spreadsheets) because they are a modeling and reporting tool, not a business system. Narrative-based documents are helpful for client-facing input processes, but they have proven challenging to date to get machine-scale access to the data locked inside of them.

Most companies underestimate their reliance on using these tools to run their insurance programs, appreciate the operational risks of doing so or see the clear business case of abandoning the status quo. But, if something isn’t clearly broken, why change? The reality is that the current approach is functional but at a tipping point.

Over the last few years, the insurance industry has made investments in business processing re-engineering and implemented Business Process Management (BPM) solutions. As a result, legacy/single-purpose systems are connected, but the solutions still fall short of providing an end-to-end view and are not yet performing straight-through processing (STP).

Manual work and paper persist, and we have to step back and ask: why are we stopping this close to the goal line? The reality is that a comprehensive solution has not yet existed until recently to tackle the challenging, costly, and risky last mile.

Bridging the gap between lost opportunities and an unfair advantage with technology

The last mile is where technology bridges the gap between lost opportunities and unfair advantages. And unfair advantages are gained with modern tech advancements, such as machine learning, artificial intelligence, and business process automation.

Recent estimates suggest that by 2021, more than 80% of data generated by enterprises will be unstructured.

“The time has come for insurance companies to embrace innovation in order to deal with the growing problem of unstructured data that threatens to place a Kudzu-like grip on progress,” Frank Sentner of Sentwood Consulting emphasizes. “The good news is, in working with several major insurance companies, there is now a determination to solve this problem and take full advantage of everything that machine learning and AI has to offer.”

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