.jpg)
A global expert has revealed what he believes are the five biggest tech issues facing the insurance industry.
James Maudslay, global head of insurance at Equinix, told Insurance Business that the industry faces challenges in a number of fields but highlighted the five that he believes are the most pertinent.
“The first is digitisation and omni-channel,” Maudslay said. “The problem with this is that everything is being digitised but actually customers, probably rightly, still want to face insurers in the way they choose.”
Maudslay said that the industry currently deals with customers who want exclusively online, zero touch connections, and those who still favour a manual approach. As such, for the “foreseeable future,” they should pursue a “hybrid arrangement” which allows customers to choose their interactions and how they connect with an insurer.
Legacy system transformation is another key challenge. The industry is finding that its old systems are “risky” as they become more outdated and difficult to maintain.
“To get around this, what we are experiencing is insurers are building satellite systems outside their legacy systems that cope with digital, mobile and the internet,” Maudslay said.
Thirdly, big data and analytics are a challenge for the industry as they will help shape the future of businesses, their interactions with clients and the products that they offer.
“Analytics is going to be, we believe, one of the really big battlegrounds of the insurance industry over the coming years,” Maudslay said. “The thing about analytics is that insurers have been doing it for a very long time but the depth, volume and speed they are going to have to do it at in the future are all increasing hugely.”
Maudslay said that firms are “struggling to know what to do with big data” as the industry looks to “derive some value” from the information in its possession.
“It is no use big data coming in if you have nothing to do with it or if you can’t extract relevant information from it,” he explained, “I think a lot of work is going into data science to see what you can do in actually using it.”
Cyber security remains a growing concern for the industry, Maudslay said, as businesses are now beginning to invest in solutions and outsource security to professionals.
“Insurers are paranoid about security, data laws and breaches and so on, and they are really beginning to invest money in security,” Maudslay said.
Blockchain and insurtech, meanwhile, are the final challenge facing the industry on the technology front, Maudslay said, as the industry gets to grips with new technology. He added that the sector should be grappling with these varied issues now rather than leaving them as problems for the future.
“They have to do business as usual as well as try to move forward in all these areas,” Maudslay said. “I personally believe they need to be facing these things now and coming up with proper plans to deal with them.”
One way to meet these varied challenges, Maudslay said, is using interconnectivity and collaboration between businesses to share the load of the challenge while retaining competitiveness.
“Insurers are beginning to understand that a great deal of their data is not commercially sensitive and certain bits can be shared without jeopardising their business, clients or security,” Maudslay continued.
“I believe that what we are going to see is a continuing move of insurers to stop doing what is not core business and to start utilising professional partners to do that. That is going to be in everything from the professional IT services, hosting and cloud, through to the business side and partnering.”
To hear more about the tech challenges facing the industry, be sure to attend the inaugural Insurance Business Insurtech Summit at the Amora Hotel Jamison Sydney on Tuesday, May 08.
This event has been accredited for 5 CPD points by the National Insurance Brokers Association (NIBA).
Check out the full program here.
