Aon’s Preeti Asthana discusses the evolution of the insurtech industry and what more needs to be done when it comes to using data.
Any industry that uses data has gone or is going through an evolution of sorts. As companies take on more data, they need to ensure it’s managed, regulated, stored and handled properly.
But to ride the wave of digital transformation, they also need to make sure they’re using the data as effectively as possible. In sectors such as insurance, big data is a major area of focus.
Preeti Asthana is director and head of global programmes, innovation and partnerships at Aon. In this role, she is tasked with finding emerging technologies and identifying their applications in the insurance industry.
In an interview with Siliconrepublic.com, she said that while the industry has evolved a lot, especially when it comes to using tech to help lower expense ratios, there is still room for innovation.
“We would love to see more emphasis on innovation and more of a willingness to experiment. Individual incentives in the industry don’t tend to promote trying something new, so many decisions are still being made with traditional thinking or actuarial techniques,” she said.
“Additionally, many incumbents are still waiting for digital transformation to get more cost effective. It’s not that we don’t know how to modernise legacy systems or break down data silos. But, for a lot of insurers it is still difficult to navigate, time consuming and costly to execute.”
Ensuring data is used
While acquiring large amounts of data is important for the insurance industry, it’s important to be able to manage that data, figure out which data is needed and how it can be best used.
Asthana said data in insurance companies can often reside in silos, making it difficult to get a single view of risk.
“In a world that has become more volatile and interdependent, each decision can have a significant impact into the future,” she explained.
“The industry struggles to identify what data is needed. Everyone wants to have big data but there is a more holistic question on what defines big data. A lot of data makes it into insurance companies, but the struggle is to manage, process, collect and collate it.”
‘Developing an understanding of how data impacts better decision making has a direct impact on financial returns’
– PREETI ASTHANA
Asthana is a big advocate for looking at better ways for data to be leveraged in the insurance industry.
She said that while a lot of progress has been made in how insurance companies move, store, process, structure and visualise data, bigger opportunities lie in the beginning and end of the chain.
“[This means] starting with the problem statement, then working backwards to understand what insights would help making better decisions, and then getting into what analytics and datasets would be useful help connects to the chain of events,” she said.
“When data flows into the organisation as an engine for growth, it is important to ensure that it is not burnt through the system without use and expelled through the ‘data exhaust’. A data strategy driven by an understanding of what you have and what you need, that brings the full potential of the firm to the client and value for investment.”
Siloed data is one of the big challenges for companies, but leaders can sometimes also be resistant to changing traditional ways. Asthana said this is often down to a lack of understanding around how differentiated data impacts insurance.
“It all starts with how data changes behaviour, whether it is underwriting information or claims settlement data. Generating awareness and developing an understanding of how data impacts better decision making has a direct impact on financial returns,” she said.
“At the end of the day, this is change and it’s no different than other cycles of change that the workforce experiences. We start from an assumption that people want to do the right thing and that includes protecting data privacy, data governance and focus on critical business tasks. We are asking people to break something down and build it up stronger. At 30,000ft, it seems obvious to do data transformation. At a human-to-human level, it’s an entirely different experience.”
Outside of taking data out of siloes, Asthana said there are a number of trends she has seen the industry go through already, and there is much more to be excited about down the line.
Historically, there was less emphasis on the customer because insurance has traditionally been seen as something you have to buy, while hoping you never have to actually use it. However, this has been changing as the industry feels the pressure from consumers who have now come to expect a ‘one click’ buying experience.
“Much of the technological advancements have been around distribution and customer experience. Now we are starting to see this focus have a greater impact on both operational efficiency and profitable growth,” she said.
In terms of emerging trends, she said alternative distribution models and new products such as embedded insurance are gaining traction.
“There is [also] greater focus on data to build better models and develop products for perils which were not addressable in the past. Open-source data and data models are commoditised but continue to be popular as incumbents supplement their proprietary data to gain better insights.”
From the investment side of things, she said advances in technological innovation will continue to attract large amounts of capital flows from VCs.
“Insurtechs with a proven value prop are making significant progress. This is a smaller segment of the overall insurtech ecosystem,” she said.
“The true innovators with deep specialisation and innovative products continue to attract capital.”
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