Advertising feature: Insurance workflows - mind the gap

The world’s largest insurers typically deploy a myriad of single vendor solution systems across their global businesses, all of which create and ingest both internal and external data, resulting in silos of information. The problem is that many of these systems cannot speak to each other, which results in a growing gap between what the systems are capable of achieving by working together compared with what they are actually accomplishing.

Operating like this imposes significant expense to an industry that is already under considerable pressure to reduce cost. In order to remain competitive, businesses need to be focusing on ways to reduce their operating expenses; as Lloyd’s of London CEO John Neal has stated previously, the future of insurance is all about saving costs. But to achieve this, something needs to change.

Closing the gap

As we look towards the next decade, insurance technology ecosystems and integration are going to be critical for the insurance sector – especially when it comes to meeting future customer demands; and according to a recent report from McKinsey & Company, operating models are already on the verge of fundamental change.

Those insurers taking advantage of these digital ecosystems can save costs. In short, it’s all about maximising valuable data insights and improving efficiencies through smart workflows – key elements that drive down operating expenses.

To remove existing pain points, there are two critical integration paths to consider: an ecosystem approach delivered via application programming interfaces; or plug-and-play solutions, which deliver more flexibility, choice and a competitive advantage. They are also more cost-effective too, thanks in part to the collaboration opportunities they present, which allows both customers and insurers to bring their own strengths to the table. 

An example of such collaboration can be seen with platform ecosystem providers like CoreLogic, for example, which allow insurers to integrate with third-party companies, helping them deliver broader service offerings and, therefore, greater customer reach.

These platforms also provide the opportunity to harness and exchange data more freely with minimal friction – a feature that is enabled by data interoperability. This function allows systems to exchange data via APIs without rekeying or losing accuracy. Not only does this save time and therefore money, but it provides more certainty on data quality and encourages standardisation.

Data, data, everywhere

For property insurance, these elements can be seen through open exposure data formats, such as the ones that have been instigated by the Insurance Development Forum, the industry-driven Open Data Standards, and Oasis Loss Modelling Framework. With access to new sources of data, insurers are able to provide unique insights, once again increasing their competitive advantage.

Access to the right data is crucial, especially when dealing with data at an aggregate geographic level; for example, zipcode level in the US – a low accuracy location identifier that has been recognised as leading toward incorrect flood risk assessments and incorrect property level assessments.

This is where ‘cradle to grave’ data can help – a resource provided by CoreLogic CLIP ID. Such identifiers provide a more precise identification of a property and enables efficient assessment of critical information such as a building’s historical valuation and rebuild cost, ultimately bringing all parties together to provide informed data at a single property level. This is a true breakthrough, offering fundamental efficiencies, as well as maximising accuracy. Crucially, it also gives the insurer a unique reference point with which they can connect to their own data.

Working in partnership

When it comes to risk modelling systems, there is no doubt that ecosystems and integrations play a critical role – not only in making sure the right insights are applied to the data, but to ensure that insurers have access to all the data too.

Such integration, I believe, ultimately helps insurers to deploy best practice solutions, whether it is the automatic modelling of portfolios on different catastrophe models, or augmenting data. I believe it is also vital that insurers should have access to insurtech companies and third-party solution providers – something that CoreLogic offers through its Digital Hub alliance.

For the successful insurer of the future, it is all about closing the gaps. The quicker and more efficiently insurers can get the most accurate insights they need, the quicker they can respond to changing market dynamics and continue to succeed as resilient businesses in the years to come.

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