Where there’s Open Data, there’s Competitive Advantage
It’s no secret that the biggest challenge facing the insurance industry is how to operate in an increasingly digital world. The insurance industry is renowned for being technological laggards, so it is also no secret that technology is the key enabler to provide the right digital platform from which insurers and brokers can rapidly respond and adapt to a changing marketplace, and deliver a compelling Customer Experience. No argument so far.
ABI director general, Huw Evans, recently also urged insurers to “maximise the potential of the data revolution”. The ubiquitous push from governments to release more data publicly has resulted in new UK government and industry bodies being set up to address the use of open data for both the citizen and commercial purposes. So how does the insurer who constantly has to keep his eye on the ‘digital’ ball gain competitive advantage from data, open data specifically?
Harness the power of open data
With 140,000+ publically available datasets you’d be forgiven for thinking that there’s either too much or not much more out that you don’t already use. The likelihood is that your existing data is coming from the same sources that other insurers are also using to innovate, price and uncover information about customers. The competitive edge lies in the ability to differentiate and realise value from open data which is connected and can be aggregated and mashed-up with the existing data that insurers have amassed over many years.
If you’re underwriting or pricing a policy you’d be able to check all the local metrics, is crime rising or falling? Are accidents in that nearby hotspot increasing or decreasing? What are the local schools like, is there a lot of anti-social behaviour? These other examples highlight the need for increased insight and intelligence.
Public Health — In January 2014 Jamie Oliver’s butchers, Barbecoa, located in the City of London, closed for 24 hours after public health officers scored it one out of five. The Times reported that his deluxe butcher’s shop was found to have problems which included dirty fridge door handles, inadequate washing facilities for staff and a “heavy presence” of mouse droppings. Other inspection reports have highlighted problems with Mr Oliver’s restaurants. The Times said it used a Freedom of Information request to obtain details of the full extent of the hygiene problems. This information is not only useful to journalists but in cases similar to this imagine what could one conclude if the premises in question were to be involved in a fire. This type of insight may provide valuable information for Fraud Detection teams.
Property — The land registry release all the data on the price paid for property, this goes back 20 years allowing you to track trends and identify new opportunities. If you add flood data to this then you can start to create some really interested insights, this data is updated monthly so you can stay ahead of the market if you keep it fresh.
Roads — Every road accident which involves the police is captured and a new dataset is released every year. This includes data on the weather, causalities and vehicles involved. Merge this in with the average number of penalty points issued in a postcode sector as released by the DVLA and you have an edge.
Imagine what else!
These examples only scratch the surface of the aggregated datasets available to mash-up with existing insurance data. Rapidly emerging technologies for open data are becoming enablers to creating competitive advantage but the value depends on the breadth of the datasets connected. An easily accessible source of aggregated open data that provides insight by virtue of being connected by a unique single identifier opens up the imagination and limitless potential for strategy teams to:
- Identify and segment new customers.
- Define and create more innovative products that closely match their customers’ lifestyle and preferences individually.
- Price products more effectively and competitively
- Gain better insight, process claims efficiently, and minimise risk for underwriting and fraud detection
The ‘what ifs’ are endless. Remember, you don’t know what you don’t know, and what you don’t know it’s only a matter of time before your competitors do!
