Insurance companies must harness big data
Millennials are now the world’s largest population segment. In considering the needs of this cohort and those following in their footsteps, a new report from KPMG suggests that Canadian insurance companies must rethink their businesses and harness big data to drive growth and profitability going forward.
According to the report, entitled Insurance frontiers: Here to horizon, 86 per cent of insurance company CEOs say they are concerned about how millennials will change their business, as many are not following historical norms in terms of predicted life paths or milestones.
The survey of 1,300 CEOs in 11 countries found that 87 per cent said they were directly involved in devising and leading technological change within their firm. That said, three quarters or 76 per cent of those surveyed also admit they have ignored insights from data analysis and computer-driven models because the findings were contrary to their own intuition and experience.
Chris Cornell, KPMG’s partner and national insurance sector leader, says insurance companies would benefit if they stepped back and thought about what the insurer of the future looks like, without considering their current organizational structures.
Stronger data collection and analysis tools needed
“The insurance industry will look radically different in 10 years from how it does today. Insurers must digitize their operations, products and processes, and use data-driven insights to address this seismic shift in customer dynamics,” Cornell adds. “From the moment we’re born to the moment we die, we generate an enormous amount of data. Big data can open up new horizons for insurers, but they must put into place much stronger data collection and analysis tools.”
The report, released this morning, examines key trends shaping the industry including business model disruption, strategic partnerships and alliances, “game changing” regulations and the talent management efforts needed to build future financial and actuarial operations.