For some time, there has been a growing demand from risk managers and brokers for greater transparency of data when it comes to global programmes. They have also been looking for better-quality and cleaner data. That demand for transparency has largely been met by most carriers in the global insurance programme world, and data is now routinely shared.
As a result, transparency of data is no longer the leading competitive issue. The focus now is on how efficient the sector can be in sharing that data and allowing all the parties to contribute to and benefit from that dataset. It is about the standardisation of the information, the communication between carrier, broker and customer systems, and who controls the data.
The way in which the technology is leveraged in insurers’ and brokers’ business models varies, while the underlying data structures and definitions and even the language used may be very different. The fact that insurance data is not standardised at an individual data element level can be irritating for some customers. Understanding how the data is interpreted by different companies is fundamental before we can start to communicate effectively. This data alignment issue is something that many in the industry are working hard to resolve but it is not a simple fix. Many global carriers, brokers and customers face internal data consistency challenges, legacy as well as regulatory, legal and contractual issues that will need to be addressed before cross-party conversations can start to gain traction. These can be lengthy and expensive topics to address but the pressure is growing and it is becoming an area where action can no longer be postponed.
There is a general debate in the industry about the flow of data and how it is communicated between all the parties, particularly between carrier and broker systems. Cooperation is key, and technology is evolving and available to aid this, notably with the development of APIs (Application Programming Interfaces). Security of data is crucial, so it is important to stay on the cutting edge of data security as some of the shared information can be sensitive. We, like others in the industry, take every precaution we possibly can to protect the data. In fact we launched an industry-leading commitment in 2019.
It is also about where the technology sits and who owns or controls it. There are three main areas:
- Insurer portals
- Broker portals
- Independent, standalone risk management information systems.
All three are providing a service aimed at ultimately simplifying the access to data for their customers. However, in some instances the differing perspectives are actually complicating the topic. The question is: how do you position a platform or a technology to be the data middleman?
There are pros and cons for each. Insurers are often, but not always, the originator of the data, handling a claim, producing a policy or sending an invoice, and are therefore able to provide live, real-time data. Brokers can consolidate cross-carrier data and provide additional services for their clients where they already have a relationship. Standalone risk management information systems can also consolidate across carriers as well as brokers where necessary, and in some instances go further with their capabilities.
It is an ongoing debate and conversation across the industry about the right solution, but ultimately the customer simply wants their data in a unified way, in a form that is easily understood, so that they can take action on it.
What needs to happen for this to be achieved? The technology exists, and once an answer to the data alignment issue is achieved, it is then down to the players in the market, insurers, brokers and customers, getting together and coming up with a solution.
If data transparency is no longer the ‘cherry on the cake’, it begs the questions as to what the value-added elements are that can be implemented around these technologies. And that is where we start to see the use of technology to bind propositions together, and the use of technology to deliver non-insurance transaction-related services, such as access to databases containing information on regulatory requirements or driving additional capability into the analysis of the underlying data. Thus, the fact that data transparency is now a fundamental customer demand, the next question is about how technology can be used to improve their service proposition or drive additional efficiencies.
There is a growing trend for technological capabilities to allow brokers, and customers in particular, to carry out actions themselves, for example issuing certificates at the touch of a button rather than formally requesting a certificate by email and waiting for a response. And there is the insurtech world, where there are companies developing solutions that can be tagged on to existing propositions, adding or creating value and efficiencies. Carriers are increasingly looking at these insurtechs to see what can be integrated into their offerings to enhance the proposition or increase value for customers.
Looking to the future, technology may give people in the industry the ability to look at developing new propositions that are not just built on the adoption of digital technologies but have technologies at their core. It is about a different mindset: looking at not just how we digitise our current business model, but how we use technology to create new business models or new propositions.
In the coming years, we will start to see more and more new products, propositions and solutions coming to market that are based on, and require, digital capabilities in order to run.
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Contributed by Jonathan Newbery, head of digital experience, commercial insurance, Zurich Insurance Group