The insurance industry is undergoing a deep transformation. The global pandemic, the risks posed by climate change, and the acceleration of digitization have disrupted the industry’s standard business processes. At the same time, increasing numbers of new data products are providing more detailed insights and better predictive capabilities that improve business decisions. 

The Insurance Data Management Association (IDMA) works to integrate the evolving principles of data management with the insurance industry’s systems and information needs, using new tools to address its new challenges. IDMA’s fall/winter 2021 conference focused on agile analysis and governing in a hybrid environment, which included a presentation from Arun Prasad, VP of Insurance Solutions at Demyst.

External Data as a Solution

Prasad noted that insurers are being forced to become much more nimble. Companies must adapt and apply new tools to address demands that include an evolving risk landscape, relentless pricing pressures, increased regulatory scrutiny, and changing customer expectations. 

External data can meet these needs, and Prasad explained that Demyst has seen it lead to:

• 33% increase in identified lead improvement and placement with hyper personalization and enhanced customer experiences.
• 12x improvements in the likelihood to convert by using quote prefill and risk profiling solutions.
• 59% increase in retaining policy holders through book-of-business analysis to identify increased risk of churn with shopping behaviors.
• 25% increase in the accuracy of fraud tagging through external data connectedness and entity resolution.
• 32% increase in recoveries through claims enrichment, fraud scoring, and litigation analysis.
• 20% reduction in external data costs through optimal data landscaping, scoping, and deployment, achieving ten times the capacity with one tenth of the costs.

Prashant Reddy, Head of Data Advisory at Demyst, also contributed to the IDMA presentation. He focused on key areas where external data has been useful for insurers, explaining that geospatial data can provide property information that may be more current than local tax assessor information. One use case for the data involves getting more accurate information for property square footage, 

Global mobility data is another source of information that can improve coverage decisions. The operating hours of a business can be verified with footfall data, and insurers can determine whether a property is regularly hosting large events or gatherings of people outside of normal business hours. These activities can suggest the presence of additional risks that may not be immediately apparent. 

Intent data can provide clues about customer satisfaction. By reviewing shopping signals and online buying patterns, insurers can improve client retention and determine which of their customers have the greatest risk of attrition. Reddy noted that insurers are still in the early stages of mobilizing this data for specific use cases.

Where to Get Started

Insurance companies face four major challenges in working with external data: connecting to data sources, ensuring that the sources are compliant with applicable regulations (e.g., GDPR or CCPA), curating data sources to ensure that the most efficient and cost-effective solutions are being used, and the deployment and maintenance of those solutions. 

Some organizations have the capacity to manage these challenges on their own. However, it can be more cost effective to work with a partner that has data management expertise. Their unique perspective can identify process improvements and capture economies of scale. Create your free account on the Demyst platform to learn more.

The Demyst platform has been designed to provide thousands of data sets through a single API, allowing insurers to improve their business processes and make better decisions.