As the insurance industry faces shrinking revenues and declining profits, property and casualty (P&C) carriers should find new ways to compete. Lately, P&C carriers have focused on system transformation projects to upgrade various systems in the hopes of improving data quality. While these projects sometimes provide short-term benefits, insurers often miss long-term revenue opportunities. In our view, predictive analytics and machine learning (ML) technology are key to future success.
At times, taking the simpler, ‘clear’ path isn’t always necessarily the right choice. With insurers looking for fast and easy answers, embracing technologies like artificial intelligence (AI) and the cloud is the best long-term solution to outpace the competition and avoid the storm of problems property and casualty (P&C) insurers now face.
We’ve heard some skepticism from insurers who have worked successfully with analytical tools for years to analyze risks and opportunities. We’ve also heard clients express reservations about data security and privacy, regulation, or even resistance from their IT teams. But, the machine learning (ML)/cloud buzz isn’t just hype, and a growing number of carriers have found ways to mitigate the technology’s risks. Many skeptics now find themselves lagging behind early adopters.
Leading P&C insurers have successfully implemented ML across various business applications. Here are some ways they have used the technology in their businesses:
The next step is to get started. Begin thinking about how your business can embrace the technology at your disposal. Use our five key steps for success as a starting point:
What is stopping CEOs from adopting ML & cloud?
Considerations to help manage these concerns
|“I’m concerned about data security and privacy.”||While cybersecurity risks are real, they often point out gaps in access controls and governance rather than where data sits.|
|“We could face resistance from our IT team.”||Maybe. Frankly, change management issues around any new technology are often harder than the technology itself. Plan accordingly. You may need to train, or hire, a new kind of IT worker.|
|“We can’t rely so heavily on one infrastructure vendor.”||Some firms spread activity across multiple vendors. Technical solutions exist that now make it easier to shift work quickly across platforms.|
|“We can’t afford any performance issues.”||Today’s cloud providers often offer services that are more responsive, updated more frequently, with flexible architectures to handle even extreme use cases. Define what you really need and find the vendors that fit.|
|“I’m not sure regulators would support such a move.”||Many regulators are getting on board with these changes. Often, the key is proactive communication and a more comprehensive view of managing risks.|
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