CEO on leveraging the power of data across insurance businesses

What is the biggest challenge facing firms looking to embrace data?

CEO on leveraging the power of data across insurance businesses


By Mia Wallace

Few instruments of doing businesses can boast quite the same level of achievement that data has managed in recent years. The modern world of insurance is distinctly ‘data positive’ and evaluating, measuring and preparing for how data will continue to evolve is high up on the agenda of any forward-thinking insurance business.

Truly understanding the value of data is the key to leveraging the advantages it can bring, as emphasised in a recent Managing General Agents’ Association webinar hosted by Kirstin Duffield (pictured), CEO of Morning Data Ltd and technical SME advisor to the chair of the Data Council. When exploring the value of data, she said, it’s critical not just to consider the sheer volume of information available but also the speed at which it can be obtained.

“When we’re using Google, we’re just accustomed now to its enormous amounts of data being returned to us in a fraction of a second,” she said. “And this really comes down to the organisation and the structure of the data that it is returning. Since the beginning of the internet, it has been building up bots… [and] trawling through the internet in order to create indexes that make returning that data as efficient as we’ve become accustomed to.

“In fact, it’s something we almost don’t even think about these days. We just assume that everybody else, and every other system can operate at that kind of speed. In 2020, there was 64 zettabytes of data on the internet and it’s predicted to rise to 181 zettabytes. And just for the record, a zettabyte is a trillion gigabytes.”

The crucial takeaway of this for the future of insurance businesses and the insurance industry itself, particularly in the context of the insurance intermediary services offered by brokers and MGAs alike, is what this influx of data means about the insurance customer of the future. This statistic reveals that the future market will be even more digitally active than that of today, she said, and it is predicted that nine out of 10 people over the age of six will be digitally active by 2030.

What this means is that the first port of call for these individuals will be the device of choice that is in their hands for more or less everything they do, Duffield said. The pandemic likely accelerated that with everybody’s online shopping prowess spiking by necessity during the COVID lockdowns and as a result becoming more normalised among the general populace.

“Really we can interpret data on a day-to-day basis very naturally in a lot of cases,” she said. “But what we’re really moving forward to is being able to interpret the written language that might exist in templates, in documents, and, particularly for the insurance industry, [in] contracts. That’s really what’s going to be the next junction, it’s going to be around things such as computable contracts. So, [for] the data powered MGA, I think it’s really important to understand what that really means.”

There’s a wealth of surveys and studies that prophesise and theorise about where organisations currently stand in relation to their data and what the future may bring and Duffield highlighted the need to be careful about using reputable sources. Looking at one respectable survey, she said, it was highlighted that 41% of MGAs and insurers stated that their data executives aligned with their overall business strategy.

That’s great, she said, but what’s concerning is that this means the inverse (i.e. the majority of these organisations) are not aligned. In the same way, 18% of the insurance organisations surveyed believe they have the tools, processes, tech, people, skills and culture to be able to support data-driven apps. That again leaves a significant margin of companies that are operating in a considerably different way, with all the implications that this brings of how much they will have to do to catch up with their peers and competitors.

“Certainly, with my hat of advising within the LMA on, one of the largest areas that has really come to the fore in that journey of talking to MGAs, brokers and carriers across the market is that it’s a cultural issue far more than a technological issue,” she said. “The tools are there and relatively inexpensive these days, although, in fairness, you may require changes to your core elements, which might require some investment.

“But the ability to leverage collecting data, with outside sources, even free data sources, has exponentially grown in recent years. So that culture around ‘well it’s not my job’ or ‘what’s in it for me?’, is a very valid [concern], particularly among the stakeholders talking about ‘well, what is the return on the investment etc.’ But perhaps that is only part of the discussion. Perhaps there’s a bigger discussion to have about - what I could do with this data. If I have to collect it, I might as well then double use it or treble use it over and over again, then returning on that investment.”

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