December 10, 2018 by Greg Meckbach
Properly segmenting data within an “ocean” of information can make the difference between champ and chump, speakers suggested at KPMG’s recent insurance conference.
“I think the biggest change that most people are grappling with is the amount of data that has become available,” Colm Holmes, president and CEO of Aviva Canada, said Dec. 6 during How are insurance organizations preparing for the future, a session at KPMG’s 27th annual insurance conference.
“When you look at the availability of data and what you can do with that, I think that’s going to be the big difference between future insurance companies and insurance companies today,” Holmes said. The winners will be those who “use data more effectively to actually deliver a product at a price the consumers want” and who are “able to spot the wood from the trees in what has become data oceans to which everyone has access.”
Insurers that can segment data to improve consumer outreach and customize coverage will do better than organizations that analyze data based on broad demographic categories. For example, Peter Hughes, Canadian digital services leader at KPMG, asked the audience to consider an example of two 70-year-old wealthy men who were born in Britain. Both are famous and are married with children.
“If I was to ask, ‘When we are doing statistics and building products and building actuarial tables, and so on and so forth, would we treat these two individuals the same way?’ I am going to answer for everyone and say we probably would,” Hughes said during a plenary session, What transformational trends are at play that affect insurance companies. Hughes then showed a slide (pictured) with the photos of the men – Prince Charles and Ozzy Osbourne.
The point being, broad data categories that would treat Ozzy Osbourne and Prince Charles as the same would result in a disservice to the customer. “We’ve got all of this data, we’ve got all of this information, and what to do with it is a very confusing thing,” Hughes said.
Data analytics can mean different things to different people, Roman Ryzer, executive director of management consulting for KPMG Canada said during a separate session, Opportunities and risks – what does the future hold for the insurance industry?
With descriptive analytics, companies can get business intelligence reports – historical data they already have. Organizations can also use the same data to try to predict what will happen in the future based on what happened in the past, Ryzer said.
“If you are thinking about data and analytics, it is not only about analyzing your historical data. It is also bringing all kinds of other sources of data. Think of data coming from your smart home, wearables, Facebook, Instagram,” said Anh Tu Le, said executive director of P&C actuarial services at KPMG Canada, one of Ryzer’s co-panelists.