Analytics – the “new trick” for moving the insurance industry forward
Almost my whole working life has been spent in the insurance industry, and in the early days, we thought we were being ‘cutting edge’ when using fax and telex. Now, after 30 years, the insurance sector is sitting in the centre of a new industrial revolution called ‘analytics’.
The insurance industry started in the coffee shops of London, and the first practitioners of three centuries ago would probably not recognise the industry as it operates today. Insurance is a risk averse industry which at time seems slow to change, and can see change as bringing a disproportionate element of disorder and discomfort to those involved. Others alternatively suggest that a degree of inconvenience is a price worth paying, and one which ultimately will take the insurance industry to the new ‘higher level’ of performance.
- To catch up – firms driven by an increasingly sophisticated competitive environment, sometimes involving new entrants
- To lead, and to maintain its lead, especially in launching new products, opening new distribution channels or penetrating new geographies
- To rejuvenate – and obtain / regain the agility to cope with more demanding external pressures
There is a common thread in these three reasons. Most pressures on insurers are invariably consumer driven, often in a volatile economy. Management has to a duty not only to respond to this new environment, but also anticipate the future. Better management reduces the ‘discomfort’ during a period of transformation – the word ‘management’ itself comes from the Latin ‘manus’ meaning hands – but insurers need more than just peoples ‘hands’ to survive today. There is a need for the organisation to change not only at a technology level, but also culturally and emotionally. It is no secret that most people push back and when they are pushed to change.
The traditionally hierachical approach to management prevalent in the insurance industry, where knowledge is power, is increasingly giving way to a distributed intelligence through the increased use of analytics. Insightful organisations provide the framework and the individual is potentially liberated and empowered to find their own way. The capability of the individual to use this new found power becomes critical, and education and training are increasingly essential.
Professional bodies like CII, Acord, and IASA recognise the need of their members not only to understand the fundamentals of their industry, but also show how technology, and especially analytics, are key enablers rather than disruptive or threatening.
So, are you ready to take the next steps with anaytics? We invite you to meet with our industry experts at the forthcoming ISAS conference and also at Acord and learn some ‘new tricks’ to take your organisation to the next level. Check back next week for my next post about how big data and new technologies are changing our industry.