Digital Age Shift Requires Data Mastery by Insurers: Majesco Report
Staff Writer | August 24, 2017
The digital age has ushered in dramatic changes in the types and volumes of data available as well as the tools and techniques to extract insight and real business value from that data, according to a new thought leadership report published by Majesco.
The report, Winning in a New Age of Insurance: Insurance Moneyball, notes that while insurers were once leaders in data-driven decisions, many find themselves behind the curve—aware of the promise and potential of these advances, but stuck in their traditional methods made up of silos of internal data and dated analytic techniques suitable for limited, repeated decisions but not capable of making new discoveries, optimizing business decisions or uncovering strategic opportunities.
The report observes the similarity to the Oakland A’s non-traditional, data-driven baseball success in the book Moneyball: The Art of Winning an Unfair Game, by Michael Lewis. Similar to insurers stuck in centuries-old business assumptions, Moneyball shows that the centuries-old collective wisdom of baseball insiders, including players, managers, coaches, scouts, and the executive office was subjective, flawed and did not keep up with a 21st century reality. Insurers who stick to the traditional, pre-digital age formula of relying on internal, historical data used only for pricing and underwriting, will put their businesses at risk … both in terms of retaining profitable customers and capturing new markets and customers.
“New Greenfield and startup competitors are the Oakland A’s of the insurance industry,” noted Denise Garth, senior vice president strategic marketing, industry relations, and innovation at Majesco. “They are rising from within and outside every industry, including insurance. They are capturing the post-digital age business opportunities of the next generation of buyers by leveraging new sources of data and using sophisticated analytics to reinvent insurance.”
Emerging technologies (including analytics) are creating new capabilities, and they are bringing with them an explosion of new data sources. New sources of data will contain unique insights regarding asset-related risks as well as consumer behavior, attitudes, and preferences. To remain competitive in the new age of insurance, companies must utilize these insights extensively to underpin their strategies for product/service design, pricing, risk understanding and consumer engagement.
“Data mastery is a key enabler of the insurance industry’s shift to the digital age, where they provide risk products and services personalized for each customer,” says Kris Moniz, vice president, data services at Majesco. “In the digital age, value is not just in underwriting the right customers, but underwriting the right risks, under the right constraints and in the right markets.”
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