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Top 10 Takeaways From the Internet of Insurance Conference
The Internet of Business’ Internet of Insurance Event took place this week in Austin, TX and the Hitachi Solutions team was proud to be there as a Silver Sponsor. It was not your typical conference, but in a good way.While we learned a lot at the event, we thought we’d share our “Top 10 List.”
Ten observations and things we took away from this extremely effective conference:
1. IoT for insurance is here. It is no longer something that insurers are just thinking about as something they need to start considering in the future. In fact, our slogan for the conference was Lead, Follow, or Move Over and we received many compliments from attendees who expressed their opinion about just how true this is.
2. IoT can be confusing. The acronym is often casually mixed in with other closely related terms and concepts like machine learning, advanced analytics and chat-bots. This is not a bad thing because they are in fact closely related depending on the particular use cases.
3. IoT can be frustrating. IoT can be applied to insurance in a wide variety of ways, and that sometimes leads to a bit of frustration among insurance industry leaders as they try to determine where to start.
Some great advice we heard on this was that it is best to first bucket the potential use of IoT for insurance into two main categories: Underwriting and Claims. Then it is helpful to begin brainstorming and creating a list of ways in which IoT could provide benefits under each of the two buckets. And from what I heard during the conference, everything should be on the table and almost no idea is unworthy of making the initial list.
4. Organization is key. After creating the raw list of ideas under each of the two main categories, insurers can then begin the process of applying a litmus test to each of the ideas, after which a much smaller list will remain. An example of how this litmus test could be conducted might be:
- How might this use case impact our existing customers? If the answer is that the impact is negative then this use case might need to be re-evaluated or dropped all together. The same question should be considered for the impact on the distribution channel – i.e. how will this use case impact our agents or brokers?
- How might this use case impact our employees? Note that this question is purposely considered only after determining the impact on the customers. This is often referred to as an outside-in approach to process automation. If you design the perfect pancake for your employees first, you sometimes create the unintended consequence of a detrimental impact to your customers. (See related blog on the impact of an Outside-in Approach to business process automation).
- Will this effort help us accomplish one or more of the following objectives:
- Increase premium growth
- Reduce claims cost and/or leakage
- Improve customer satistfaction and customer loyalty
- Increase “stickiness” of our product offerings
- Reduce fraud
- Reduce administrative costs
5. Don’t let IoT overwhelm you. Avoid the tendency to “boil the ocean”. Sure, there are likely dozens of ways that IoT can be beneficial to an insurer but trying to tackle them all at once is a daunting task. Following a structured approach like what’s described in #4 above can help insurers better prioritize the high value/low effort opportunities to get started with IoT.
6. You have to start somewhere. Start with a pilot; if you do fail it, it is better to “fail quickly” and move on. We don’t take credit for this concept as it was mentioned by a panelist in one of the sessions, but it is a good mindset to have when embarking on a Proof of Concept for IoT.
7. Leaders need followers. The person who creates the idea is important, but finding the “follower(s)” is an even more important criteria for a successful IoT pilot. The best ideas in the world won’t see the light of day without having a willing and able follower(s) that believes in the mission and can help drive the execution of the project. Full credit for this idea goes to Sharon Dean, Product Vice President for Encompass Insurance, who shared some powerful thoughts on creating a winning culture and environment to help ensure success when deploying new technology in an organization.
8. Integration is the key to Action. One common question we heard several times throughout the conference was, “Sure, we know we can now get our hands on all of this data that wasn’t available before, but what do we do with it? And how do we make the data actionable?”
The answer to this may be more obvious than people realize at first. If, as an example, you are now able to collect vehicle driving behavior data from your insureds, you of course need to overlay this data with your customer master. The customer master may be in a policy admin system and that’s great, but you aren’t going to dynamically populate segmented marketing lists in your policy admin system and then execute marketing campaigns from there either.
Policy Admin Systems aren’t typically built to handle these types of activities. This is where the integration of IoT data, policy admin, and your CRM system intersect because CRM is the tool that enables things like segmentation, automatic lead creation and lead assignment, and typical customer engagement activity. If, for example, you’re now able to capture driving behavior such as speeding, cornering, typical driving times of day, and traffic density of your insureds you need to then be able to segment these insureds accordingly and do things like:
- Offer tailored driving tips to the insured based on their profile
- Alter marketing efforts to focus on retaining those insureds that meet your desired profile and reduce marketing spend on those drivers that don’t meet your ideal profile
- Reward those drivers who are demonstrating safe driving behaviors via discounts or other promotional items.
Likewise, having access to weather data to accurately predict the path of a hailstorm is great. But if you aren’t then using this information to notify all of your insureds that are in the path of the storm to take proper precautions (like moving cars into garages and avoiding driving in the anticipated area of impact), then what good is this weather information really doing? Again, this is where the integration of external data (like weather or driving behavior), overlaid with your insureds, and integrated with your CRM “execution” system is so important; if you don’t, then you aren’t really having the desired impact of reducing losses very much at all.
9. It’s not Rocket Science. IoT may involve data science, but data science isn’t rocket science. Credit for this suggestion goes to David Bishop SVP of R&D for Hitachi Solutions who presented on IoT for Insurance at the conference. Just as the ability to capture data from devices is becoming easier and easier, the same is true about the tools and technology needed for conducting predictive analytics, machine learning, chat-bot, etc. It is evolving quickly and becoming more and more attainable, more affordable, and easier to use.
10. It’s time to do more than chat about chat-bots. During a recent meeting with one of our customers, the SVP of Claims & Customer Service made the following comment: “I know that if we could leverage a chat-bot to handle our incoming calls and it was able to interact and resolve just two or three of the most common questions, we could reduce staffing for the claims department by fifty percent” (and they have a very large claims department). My response was simply, “What are you waiting for?” The tools are readily available and becoming more affordable every day. I wish I would have had the nerve to respond with our Internet of Insurance slogan and say, “Lead, Follow, or Move Over”. If YOU aren’t doing it, someone else is and now you are playing catch up.
I must say, it was not easy limiting this to just 10 things because so many great ideas were shared this week. Interacting with so many great minds in the industry was a privilege, and Hitachi Solutions looks forward to participating in the third annual Internet of Insurance Conference in 2018.
To learn more about how Hitachi Solutions helps insurers pursue their objectives around IoT, Advanced Analytics and Machine Learning contact us today and ask about how to get started with us.