{"id":59038,"date":"2019-10-03T09:59:16","date_gmt":"2019-10-03T13:59:16","guid":{"rendered":"https:\/\/staging.majesco.com\/?p=59038"},"modified":"2025-04-10T10:07:01","modified_gmt":"2025-04-10T14:07:01","slug":"weaving-todays-threads-to-build-a-new-future-of-insurance","status":"publish","type":"post","link":"https:\/\/staging.majesco.com\/?p=59038","title":{"rendered":"Weaving Today\u2019s Threads to Build a New Future of Insurance"},"content":{"rendered":"

I love history. It is rich with ideas and insights.\u00a0 One of those things I love are tapestries.\u00a0 Tapestries have long been used as artistic expressions that tell history \u2014 heavy fabrics with meaning and intention. The weaving of these fabrics interlaced perpendicular sets of\u00a0threads<\/strong>\u00a0together to weave and design the tapestries. Historical tapestries became a great symbol of status and influence at the time, but as history evolved they became remnants for a different time.<\/p>\n

Why do I share this? Because insurance business models and assumptions of the last 30-50 years are like tapestries. They defined the status and influence of insurance companies based on how the industry defined (or weaved) together the threads \u2013 products, processes, systems, channels and data. The emergence of InsurTech and the proliferation of new data sources and the use of these data sources to disrupt risk assessment, underwriting through claims, has begun the unraveling of our historical tapestry into a new modern fabric that will be more agile, resilient and relevant in a new era of insurance.<\/p>\n

Data \u2013 The Thread Reweaving the Future of Insurance<\/strong><\/h2>\n

In a product-rich industry, supply and demand share a crucial link. When demand is met by an adequate supply, priced properly, and supplied through the right channels, profit happens. This is true if you sell tangible items, such as shoes, watches, cars or computers, and it is true if you sell intangible items, such as vacations, concerts, video streaming or insurance. Companies that can find the magic balance between pricing and demand achieve something greater than simple profits. They gain coveted market momentum. But that will only take you so far.\u00a0 Because in today\u2019s customer-driven marketplace, it all about market value, confidence and personalization to their needs and expectations.<\/p>\n

In this shift from product to customer-driven, the thread that binds customer, demand, supply and profit together is data. <\/strong><\/p>\n

Data has the ability to personalize the customer experience while also improving marketing effectiveness, enhancing pricing accuracy, expanding the ability to capitalize on new channels, reducing claims fraud, and creating improved profit.<\/p>\n

For most insurers, however, there are some real hurdles to building and creating an optimal data environment. The greatest hurdle, surprisingly, may simply be data stakeholders within the insurance organization holding on to history. Necessary foundational data changes will only stick if they achieve widespread adoption among those within the insurance company. People are the key to the change. Technology can allow for new behaviors and incredible advances, but people have to engage with the technology and be open to a new data thread to make it happen.<\/p>\n

In Majesco\u2019s recent webinar, Building a Data-driven Foundation to Shape the Future of Insurance<\/a>, we looked at what it will take for insurers to capitalize on the data opportunities that are readily available and just how ripe the market is for change. In today\u2019s blog, we\u2019ll share some of those insights and in an upcoming blog, take a peek into a well-run data organization. Our goal is to see that data is best considered as a FOUNDATIONAL asset, not a provisionary asset. If the organization becomes data-driven instead of seeing data as a kind of add-on, that foundation will be strong enough to support all efforts.<\/p>\n

High priorities. Real desire for change. Uncertain first steps.<\/strong><\/h2>\n

In Majesco\u2019s Strategic priorities research<\/a>, we found that Data and Analytics Capabilities are a top concern among the 16 internal and external challenges. This crosses all types of insurers and all levels of tech advancement.<\/p>\n

So, we know that insurers desire a data foundation. On the flip side, we can also see that customers are ready for personalized data-driven pricing. In our research for both Individual customers<\/a> and small-to-medium businesses<\/a>, we found that between 46% and 60% of them are very willing to use products that are priced (at least in part) based on the use of the data that they uniquely generate. This confluence of desire on both ends has made real change mandatory. Insurers need to catch up. But where do insurers apply their efforts? Is there a right first step?<\/p>\n

\u201cThere is a lot of hype around data and analytics,\u201d said Ben Moreland, Vice-President Data and Analytics, Majesco, \u201cand a lot of disjointed efforts that are going on\u2026a lot of interest and intrigue in advanced analytics. The belief is that if I can just get my hands on the right data, then I\u2019m going to start seeing amazing benefits and value.\u201d<\/p>\n

Taking the first step, then, requires more than just acquiring sources of valuable data. This is because strategies are inconsistent and there is no master strategy \u2014\u00a0one that operates at an enterprise level and takes all needs and benefits of different parts of the organization into consideration. There may be excellent data within a department, but that may not be available to the rest of the enterprise, limiting value and opportunities. \u00a0In a Crawl-Walk-Run-Sprint strategy, most are stuck in Crawl-Walk because they are using one data set at a time, and not sharing or using it enterprise-wide. Every time they approach something new, they are reinventing the same cycles.<\/p>\n

When discussing enterprise data governance and strategy, most are still at the lowest levels, challenged with who should be overseeing data governance and what kind of granularity they need to be looking at within the data. They are making low-level decisions and not tackling the tougher, but more crucial determinations about data strategy and direction for the company.<\/p>\n

How can insurers turn existing and new sources of data into an enterprise business asset?<\/strong><\/h2>\n

Insurers need to consider what they want out of their data, both in results and in how they engage with the data.<\/p>\n

Most insurers want:<\/p>\n