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Assaf Tayar, Managing Director at BCG Platinion, explains what insurance trends you should be paying close attention to in 2022. 

For businesses to set effective plans and goals, they must have a full understanding of their operating environment, trends and challenges. Of course, while the pandemic has been the obvious major source of disruption to the insurance industry, firms need to reflect more widely on how conditions have impacted their operations. In particular, the pandemic accelerated digital transformation across the world. For the insurance industry, the role of technology across all aspects of the business is essential, especially as more people take up flexible working or decide to work remotely for the foreseeable future. These new developments are forcing business leaders to re-evaluate how their business operations and user experience fit with what customers expect in a technologically advanced world.

In this piece, I share some of the insurance priorities to consider and even respond to this year. 

1. Cloud will become essential

Today, more leaders in the insurance sector now understand the value of cloud computing. In fact, estimates predict that the cloud computing market size will reach $1.2 trillion by 2028. Keeping up means the industry will begin to take a cloud-native approach, like many other industries that are already using the technology as part of their business infrastructure and operations. 

This will come as no surprise to anyone as most of today’s software solutions are cloud-native. Whether it’s to access the plethora of third-party solutions available, improve efficiencies or increase cost savings, this trend will continue to gain momentum. As such, we’ll continue to see insurance companies look for solutions that help them accelerate their cloud migration efforts.

2. InsurTech solutions will lead the way

Just as the banking industry was revolutionised by FinTechs, the insurance industry is joining the digital revolution. InsurTech, this year, will be key to modernising technology stacks to get the most value from IoT, data and cloud, meaning InsurTech will become the norm. 

Yet this means SaaS-based solutions built on APIs will need to be put in place to deliver personalisation on a much greater scale. Due to the level of competition in the market, the modernisation of the insurance industry will continue to grow at a fast pace. The sector's maturity will depend on the richness of solutions InsurTech makes possible. With the most modern, effective systems, this growth will enable businesses to provide convenient and direct value propositions to both customers and clients.

3. A wider ecosystem will be API driven

More and more new platforms are being built daily and we’re already seeing the development of microinsurance products that can be plugged into different marketplaces. As a result, this drives product simplicity, as well as ensures focused customer engagement and services.

The acceleration of this trend will continue in 2022 and the insurance sector will take a larger role in this wider technology ecosystem. Next, the focus for business leaders will be to gain value from the technology, which will require better use of APIs and the development of partnerships with open architecture. For example, with health insurance like Vitality, premiums are flexible if customers make healthier lifestyle choices, like going to the gym regularly. It’s here that open APIs are vital to track and verify customers’ patterns, for example through connecting to customers' fitness apps. In some parts of Europe, this has already begun to happen and will become even more prominent in 2022. 

4. Data management will be used at scale

According to the Global Consumer State of Mind Report 2021 by Trūata, 76% of global consumers believe that brands need to do more to protect their data. And the need to have effective and efficient solutions to cope with GDPR, cybersecurity and the like, when managing data has never been more crucial. 

Insurance organisations will start to see huge benefits from using data platforms once they’ve moved their IT infrastructure to the cloud. Although there won’t be an explosion of new technologies in this area, we’ll see insurance companies deploying more effective solutions at scale and leveraging it to fulfil its true potential in 2022.

5. Cryptocurrency payments will continue to surge

Our financial ecosystem is currently undergoing an evolution and insurance organisations are developing and embedding into tech more than ever. Currently, some insurance players are building payment mechanisms by leveraging crypto solutions, while others offer cryptocurrency protection. For instance, in the US, auto insurance company Metromile announced it will soon let customers pay with cryptocurrency and even receive pay-outs in digital currency. 

In 2022, there will be even more growth in technologies that enable alternative ways of making payments. We’ll start to see smaller players in InsurTech provide instant payments that don’t even exist right now. It will still take time for there to be a global cryptocurrency market, but blockchain will continue to provide new opportunities that will impact the insurance industry.

6. Working with other industries will remain important

Insurance has played an important part in several different industries, but this will increase in 2022 for the automotive and healthcare industries specifically.

In the automotive industry, many modern cars have various IoT sensors which collect data on how a car travels. The telematics of the data is embedded in the car, meaning data can be sent back to relevant organisations – such as an insurance company – if an accident were to occur. Over time, this technology and data will continue to grow and insurers will have a much more sophisticated approach. Here, AI will play a big role, and this will be driven by the insurance sector.

There’s also a huge opportunity in the healthcare industry. There is a growing ecosystem of services and devices available to help individuals live a healthy life and recent findings from CCS Insight suggest that Covid-19 led to a 20% growth in smartwatches. As more products enter the market, having the right solutions to store and process data and ensure it’s compliant, will be key. 

For financial institutions, leveraging data to gain insights and inform decision-making has become more important than ever before as digital transformation agendas become more focused on enterprise-wide initiatives that deliver elevated customer experiences. However, these efforts are currently being hindered due to overly complex data infrastructures that rely on a disjointed set of technologies for data management, semantic layers, data pipeline, data integration, and analytics. This is leaving firms unable to obtain data fast enough, and in a way that is easy to interpret and share to drive their organisation forward. 

Consequently, to solve these issues, many are looking for a new approach to data management. This has led some of the world’s leading financial institutions such as Bank of America, Citi, and Goldman Sachs, to implement data fabrics. But it’s not just larger firms that stand to benefit from data fabrics. Slated as the “future of data management”, this new architectural approach to data management can help firms of all sizes to achieve smarter data enablement, 'information fluidity', and a simplified and futureproofed data architecture to maximise the value of their data. 

The future of data management

The growing popularity of data fabrics is down to their ability to speed and simplify access to data assets across the entire business. A data fabric accesses, transforms, and harmonises data from multiple sources, on-demand, to make it usable and actionable for a wide variety of business applications without creating additional data silos. This is a far cry from the overly complex architecture most firms are currently used to. 

Smart data fabrics extend these capabilities even further by embedding analytics capabilities directly within the fabric, such as data exploration, business intelligence, natural language processing, and machine learning. This makes it faster and easier for organisations to gain new insights and power intelligent predictive and prescriptive services and applications. 

Another major benefit of a smart data fabric is that it allows data to remain at source while adding new functionality and levels of flexibility. This means existing legacy applications and data can remain in place so firms can maximise the value from their previous technology investments, including data lakes and data warehouses, which is particularly beneficial for smaller firms with tighter budgets. Additionally, this approach ensures firms don’t have to worry about moving data to a centralised store and all the challenges that can entail, such as latency and duplication of data. After all, it’s these issues that can call into question whether the data can be trusted and if decisions based on it are truly informed. 

Elevating the customer experience

Once implemented, smart data fabrics give financial services institutions the ability to more fully leverage their data, customer and otherwise, and open up a world of possibilities. By weaving together different data sets and providing easy and uniform access to data, a smart data fabric can help generate insights to better understand customers, predict behaviours, and provide customised experiences in real-time. These capabilities promise to help firms to elevate the customer experience and enhance business results. This has the effect of helping organisations to expand customer opportunities, retain existing customers, and gain a competitive advantage in an increasingly competitive landscape.

The use of a smart data fabric also caters to business users’ demand for more direct and simplified ways to derive insight from the firm’s data assets, while also helping firms keep up with regulatory imperatives that require support for advanced data quality, lineage, security, and governance capabilities. 

Smart data fabrics for all

With their ability to unify data from both internal and external sources on-demand, without creating additional silos, and provide accurate and seamless access to that data, smart data fabrics present the opportunity for financial services firms to do more with their data. This will put the power to accelerate business innovation and obtain or maintain a competitive advantage firmly within the grasp of organisations of all sizes. In what can be a challenging and volatile environment, this can make a significant difference to how firms respond to changes within the landscape and position them to use their data to inform their next move.  

As firms turn their attention to implementation, working with experienced technology providers and partners will offer the best path forward and ensure they are able to make the best use of the various data management, integration, and analytics technologies that make up a smart data fabric. 

By taking this step forward by implementing and embracing this next-generation data management approach, financial firms will set themselves up to succeed both in today’s landscape and well into the future, giving them the capabilities they need to deliver an elevated, customised, and differentiated customer experience every time.

An Interview with:

·     Marc Vollenweider, Co-founder and Chief Strategist

·     Ashutosh Gupta, Co-CEO and Global Business Unit Head for Financial Services

·     Ravi Mehrotra, Co-CEO and Global Business Unit Head for Corporates and Professional Services

 Founded as a start-up in 2001, Evalueserve is a global professional services provider offering research, analytics, and data management services. The company is powered by mind+machine – a unique combination of human expertise and best-in-class technologies that use smart algorithms to simplify and automate key tasks. This approach enables Evalueserve to design and manage processes that can generate and harness insights on a large scale, significantly cutting costs and timescales and helping businesses to overtake the competition. The company works with clients across a wide range of industries and business functions, helping them to make better decisions faster, reach new levels of efficiency and effectiveness, and see a tangible impact on their top and bottom line.

This month, Finance Monthly had the privilege of speaking to Marc Vollenweider - Co-founder and Chief Strategist, as well as the company’s new Co-CEOs - Ashutosh Gupta and Ravi Mehrotra, who tell us all about the mind+machine concept and Evalueserve’s mission.

Marc, you have recently shifted your role from the being CEO to becoming Evalueserve’s Chief Strategist, can you tell us a bit more about this transition?

Marc: After spending about 16 years as Evalueserve’s CEO, I decided that it was time for the next generation to get involved in running the business, from an operational point of view. We decided to go with a Co-CEO structure, by splitting the role between Ashutosh and Ravi, while I shifted to a full-time board role, which allows me to concentrate on innovation-related projects. I am still strongly involved in the company, but instead of dealing with the day-to-day operations, I focus on proposing strategies and examining our next steps for the future.

Tell us about the experience of writing a book while running a global business? How have mind+machine and the book influenced Evalueserve and its business?

Marc: As soon as the idea about the book came about, it was clear that I wouldn’t be able to combine writing a book with my full-time CEO role. Thus, I took some time off, between March and June 2016, and wrote the book, while Ashutosh and Ravi got to practice running the business on their own. The experience of authoring a book on its own was extremely rewarding and I am proud of the final result.

The mind+machine concept is something that we started working towards 5 years ago, realising that a people-only approach was becoming too slow and too costly. We saw an opportunity for automating tasks and processes, and using machines to run repetitive tasks. We started coming up with workflow platforms, productivity tools, analytic engines, better knowledge management, etc. and fully rebranded the business. If we compare Evalueserve today to the company it was 5 years ago, I’d say that we have reached a productivity increase of about 30-40% on a per head basis. Mind+machine makes us faster - it makes the quality of our work better, and it gives our clients new capabilities to work with.

In today’s world, clients want to see innovation, so developing mind+machine has been essential for Evalueserve.

 

What are the benefits of a dual CEO-structure?

Ashutosh: At Evalueserve, we are very client-centric and also serve a variety of different industries. The fact that I have previously worked within financial services, while Ravi comes from a more corporate and consulting-oriented background, allows us to focus on these very different client segments. It also provides us with two different points of view and diverse ideas when it comes to dealing with common areas like HR, policies, marketing, etc. So the Co-CEO structure actually works really well for us.

Ravi:  Given the scope and scale of Evalueserve, being a very large and complex business, we want to make sure that we divide the different areas of the business and responsibilities between each other.

Additionally, the dual CEO structure, although not new, is still very rare and unusual. One of the reasons why it works for us is because, before embarking on this, we already had a very strong working relationship, with both of us having spent over 6 years in Evalueserve.

 

What are the main challenges that decision makers are facing today? How can mind+machine help overcome these challenges?

Marc: There are millions of decisions that need to be made in a company on a daily basis. And I’m not talking only about the decisions that the executive board makes; at Evalueserve we’re looking at decision makers at various levels of the company - from the CEO to the service technician. So for these millions of decisions, naturally, there’s a very large number of analytic use cases.

The problem of decision-making includes the logistics of having the right data at the right location, at the right time.  Then, these decisions must be transferred into a workflow where they get converted into actions and create impact. How does mind+machine help with all of this?

Unfortunately, when you look at how many decisions are being made within an organisation today, you’ll still see a lot of manual work. There are a few workflows, which make the life of decision-makers significantly easier. Mind+machine provides the client with the ability to crack the analytic use cases and then put a system or a machine in place to get them done on a recurring basis, as well as a platform that has all the necessary data feeds and analytics, and most importantly, links multiple end users and decision-makers in a collaborative way. This results in fast and efficient decision-making processes, with the knowledge management being done within the platform, so it doesn’t have to be redone every time.

 

Why do analytics matter for almost all types of businesses?

Marc: In today’s world, analytics are critical, solely because a lot of decisions within an organisation depend on diverse and complex data, which wasn’t so much the case up until 15 years ago. When it comes to decision-making, we need data that has been prepared, analysed and converted into insights and decision-ready output.

Today, every business needs an increasing amount of analytics because they improve the return on investment of many processes – it’s as simple as that.

 

How can one set up the use-case thinking in the company?

Marc:  Use cases have a number of implications for the whole company. Currently organisations tend to mingle everything together in a big pot - they set up central data scientist teams and large data lakes from where the teams try to come up with analytic output. However, this approach frequently leads to White Elephants not serving the end users’ needs well, often with negative Return on Investment (RoI). Companies should move to a culture of individual-focused analytic use cases.

A use case is not just an analysis; it comprises the data flow, the analytic engine, the UX (User Experience), the knowledge management for improving re-use, and the link to the overall workflow. Only in this way can the end users get what they need and achieve positive RoI.

It is my belief that this cultural change needs to be driven by the C-Suite, including the Chief Data Officer, who should jointly agree on putting this philosophy in place. Setting up the use-case thinking in a company should start with an agreement between the highest level executives, who should then drive it into individual units, so everyone gets into this mode of thinking over time.

 

How does Evalueserve use use cases to help its clients with decision-making?

Ashutosh: At Evalueserve, we have a whole collection of analytic use cases that are well-documented. Thus, when a new client comes to us with a business problem, we can easily leverage our database where we’ve cracked similar use cases before and come up with a specific solution, while saving our client a lot of time and money.

Ravi: Additionally, our use case hub is also helpful when it comes to showing our clients what mind+machine means. We’ve gathered all of these concepts that we are developing into a product, and have created a collection of use cases that we’re able to demonstrate to our clients at all times. The use case hub also enables the Chief Data and Chief Analytics officers to scale up their analytics capabilities by harnessing the knowledge, ensuring consistency and carefully selecting use cases for wider deployment and investment, based on the RoI.

 

What is your advice for successful leaders in the modern tech-focused world?

Marc: If we look at this from a ‘what lies beyond the horizon’ perspective, my advice is to get your feet wet - look into potential trends and then take well-informed, but still risky decisions. People nowadays are myopic when it comes to considering competition and future client needs and often get stuck in their current views. Being open to change and innovation and having a portfolio of new initiatives to play with is a critical element of strategy in today’s tech-focused world.

Ashutosh: Nowadays, it can be very difficult to stay on top of and respond to the changing technology trends, while running the business. So while it’s important to have a good technology strategy, it is also very important to communicate that strategy to your clients and throughout your organisation, so everyone shares the same goals and feels they can contribute to its success.

Ravi: The two things that I’d like to add are to firstly, be comfortable with uncertainty – we live in a very dynamic world and things change all the time. Leaders need to be flexible and always prepared for change.

Secondly, nowadays, it’s very easy to get so fascinated by the technology aspect; so my piece of advice is to not forget about the basics when it comes to leadership. i.e., technology and analytics are enablers to serve the broader business goals, and not the other way around.

 

Read more about mind+machine at: http://blog.evalueserve.com/ 

 

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