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5 Ways Insurance Companies Can Become More Data-Driven

James Ardis
Discover five ways your insurance company can become more data-driven, from telematics to generative AI for underwriters.
Insurance professional reviewing data on a laptop.

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Data is the most valuable asset in the insurance industry. Whether you are assessing risks, personalizing marketing, brainstorming new pricing options, or any number of other tasks, data fuels your decision-making.

There is a big difference between having data and being data-driven, though. Many insurance companies find themselves with plenty of information about customers but few ways to get a full picture of who they are, what they want, and what tailored insurance plans they require.

In this article, we will look at five ways insurers can become more data-driven. From getting rid of pesky data silos to leveraging generative AI for underwriting, you will find actionable plans to enhance your data capabilities.

#1: Demolishing Data Silos

Departments throughout your organization, such as claims, marketing, sales, and underwriting, likely have their own databases. If those databases are not connected, then each department is working with limited information. This is a very common phenomenon called data silos, where insights languish in dashboards that many in the enterprise do not even know exist.

It can be difficult for insurance companies to deconstruct data silos. Afterall, your enterprise data may be stored in formats as diverse as call center portals, Excel spreadsheets, commission tracking software, and even file cabinets. However, it is a necessary step to building a collaborative, data-driven organization.

Insurance professional searching binders of data.

Technology solutions companies like Programmers Inc. can help you build a data repository (such as a data lake or data warehouse) that can serve as the universal truth for your organization. They can also leverage automation to rapidly digitize paper records and IoT devices to capture real-time data that may have previously been untraceable for your organization.

We recently helped a car rental company track and consolidate data on about 100,000 vehicles in a single data ecosystem. We built a data lake and warehouse in Azure so the company could properly utilize both historical and real-time data.

Our client could also quickly look up the specific information they needed thanks to a data catalog we built. In total, it took only 6 months for this car rental company to say goodbye to data silos and provide all departments with the information they need.

#2: Enacting and Incentivizing Telematics

Telematics has revolutionized how auto insurance companies understand the behavior of individual drivers and the risks involved in insuring them. This has allowed for more dynamic pricing options that remove some liabilities from the company and reward safe drivers.

If you’re an auto insurance company that already leverages telematics, ensure you’re properly incentivizing drivers to opt into this service. As SambaSafety CEO Matt Sheuing recently told Insurance Journal, “Telematics technology has outpaced consumption, and usage falls short of full potential.”

The journey to telematics adoption begins by giving customers visibility into how much money they could potentially save by opting in. But don’t stop there; give them access to some of the data you gather from telematics to help them become better drivers.

Consumers are increasingly interested in understanding their daily habits better by leveraging digital technology (think of step trackers and productivity tools). Many will be fascinated by looking at their successes and areas for improvement as a driver.

Customer in parked car reviewing data received from his insurance company on his cellphone.

If you are not currently using telematics, work with an organization like Programmers Inc. that can help you collect the necessary data from IoT devices such as smart phones, OnStar navigation, or your own proprietary devices.

We recently helped a multinational beverage company gain 100% visibility into their fleet of trucks. Utilizing IoT devices, we gave fleet managers real-time insights on each driver’s location, speed, ETA, route decisions, and whether they had taken their mandatory breaks. Like an insurance company utilizing telematics, this gave the beverage company a quick way to address unsafe driving and optimize their operations.

#3: Improving Data Quality

Data quality in the insurance industry is about much more than just having accurate information. You also need to ensure that your organization has a complete and auditable data set of relevant information that is consistent with the rest of the data that your company collects. That way, decision-makers across the company can use data with the utmost confidence.

At Programmers Inc., we have 30+ years of experience improving the quality of companies’ data. For example, we recently worked with an investment bank to provide them with more reliable information.

Like the insurance industry, investment banks need to analyze the potential risks of customers and make quick decisions on the services they are willing to offer them. We connected their source systems to a single repository and ensured all information conformed to a set standard and was not duplicated. This gave the investment bank confidence to make fast decisions based on the insights found in the repository.

Consumer paying for additional insurance for e-purchase.

#4: Gaining More Customer Insights with Embedded Insurance

Every day, customers are engaging with embedded insurance without even realizing it. They are deciding whether to insure their flight back home while still booking said flight. They are considering the advantages of insuring a new television while they are at the store counter purchasing it. In the property and casualty insurance industry alone, sales of embedded insurance are expected to grow to USD 70 billion in the United States by 2030.

Beyond the obvious benefits of offering embedded insurance (namely, selling your services where and when consumers need them most), there are also data benefits to this strategy. You can learn much more about your customers’ habits, including where they like to buy products and services, how often they buy them, and which purchases they find most important to insure.

Your organization can put itself in the best position to discover these insights by creating dashboards that allow key stakeholders to see trends in embedded insurance purchases. For example, now that the COVID-19 pandemic is behind us, are consumers still insuring flights as frequently as they did during the pandemic? Trends like this will be important for your organization to follow.

#5: Leveraging Generative AI as a Co-Pilot for Underwriters

No tech article would be complete without a mention of generative AI. In the insurance industry, this technology serves as a particularly helpful assistant to underwriters.

GenAI can provide an initial report on whether to insure a person and at what rate. The underwriter can then review the system’s findings, adjust for biases, and provide the most appropriate rate and risk profile possible.

This technology can instantly uncover the data that your underwriters need. As our in-house thought leader Rafael Dourado put it, generative AI “gives the user superpowers to become a data scientist with no previous knowledge of data science.”

Considering how important your customers’ data is, be sure not to expose it to the many data risks of the public ChatGPT. Instead, work with a company like Programmers Inc. to infuse this technology directly into your internal systems.

Woman beside her car reviewing a roadmap, symbolizing insurance companies’ journey to becoming data-driven.

Where to Begin

“We still treat data more like the plumbing,” admitted one insurance professional in a recent Deloitte survey. With all the work it takes to procure and maintain high-quality data, it is easy for insurers to think of data as more of a chore than as an enterprise-altering asset.

The five techniques above can help you gain truly transformational data that will power insights throughout the organization. But which technique should your company focus on first?

Programmers Inc. can help by identifying your current level of data maturity and the improvements that will deliver the most value to your organization. Learn more about our data analytics services, and schedule an exploration call with us today.

Let us know how we can help you.

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