Three common impediments to embracing technology
The insurance industry has taken it’s time to embrace technology. But change is being born by consumers. We use digital interaction in almost all areas of our lives. So why not insurance?
There are many reasons that crop up time and time again; legacy systems, data quality and regulation are just 3 points that are often attributed for the delay in embracing technology. We look at how fair those accusations are.
There are those that will argue that positive change and creative ideas are being stifled by compliance. But the reality is that innovation is being welcomed by regulators.
The FCA have been praised for its encouragement in innovation. They are actively promoting innovation and competition as part of their governance, alongside the traditional mandates of financial stability and consumer protection.
The UK also topped a recent global study, compiled by EY, as the most fintech-friendly jurisdiction.
UK fintech, which includes Insurtech, generated £6.6bn in revenues and employed 61,000 people in 2015. Whilst personal lines insurance is ahead of the game and taken on the regulatory barriers, they have laid blueprints for commercial lines to learn from.
It’s also important that as an industry, we look outside of the market. With an eye on developments across technology as whole we can stay aware of the possibilities.
With more data at our disposal, more information about risks, more accurate predictions, precise weather reports and real-time information, is there any excuse for poor data quality?
Of course, inaccurate historical data can reduce the quality of data at our finger tips, but it is certainly getting easier and easier to improve this.
Data drives the insurance industry, so of course it’s common sense that the quality is continuously improved. It enables risks to be more precisely targeted, assessed and priced.
Data quality can also drive innovation in products. Making a policy more personal to the end user, providing cover that’s needed at the right time. The days of an off the shelf policy are numbered.
Instead, insurers are paying more attention to consumers needs. Adding value, not only in terms of cover, but also in a pro-active service – all driven by data.
Using data to be smart is just one way that we can change perceptions of the insurance industry.
Just some simple steps, can ensure clients know we are on their side, and that we are ready to pay their claim if and when the need arises.
As an intangible product, insurance should, in theory, be easy to digitise. But, legacy systems and historical processes with different third parties can often make the experience clunky and time consuming – not to mention expensive.
As an industry we’re often looking for a magic pill, a quick solution to legacy systems. But, the trick to technology advancement could just be small simple steps. As a start up we don’t have our own legacy systems to hold us back, but we still come into contact with these systems at Lloyd’s and other third parties.
We all have to keep in mind that technology should be improving processes, and therefore the experience for all those involved.
Technology doesn’t actually need to be ‘disruptive’ or revolutionary. Sometimes, it’s just the simplest solutions that can create the biggest impact.
So instead of looking for the next big thing to shake up the market. Maybe we should just look at the small steps we can all take to improve the way insurance is transacted and experienced.
Because, if we look at the bigger picture, the perceived barriers could just stop us in our tracks.