The insurance industry is in danger of falling behind other companies because it is not interested in the latest digital technology.
Reuters reported that while some insurers are using developments such as telematics, or social media sources, to increase the amount of information they have about customers to reduce claims and make insurance cheaper for all most are luddite laggers.
Famously we will probably need “black boxes” in our cars so that we can be rewarded with lower insurance premiums if we drive carefully.
But apparently when it comes to Big Data, insurance companies are saying a big “no.”
This is because the insurance industry is still locked in the early 20th century, where pen and paper were mightier even that the typewriter.
Staff at Lloyd’s, home to more than 90 trading syndicates in London’s financial district, still trundle suitcases of claim forms for complex insurance transactions.
Lloyd’s Chief Executive Inga Beale has said the industry needs to take technology on board to maintain its role in global business. The firm recently appointed a Chief Data Officer and Beale said the sector needs to attract new, tech-savvy talent.
Part if the difficulty is that there are a mass of different systems out there and firms are often swallowed up by bigger insurers, makes it hard to streamline technology.
Firms might like the idea of technology, but cannot be bothered spending because they are having trouble balancing their books with bond yields at record lows.
This is despite the fact that a report from Morgan Stanley and Boston Consulting Group says the first movers will clean up.
They say a full transformation to becoming a digital company could cut an insurer’s combined ratio by 21 percentage points, in other words making the firm more profitable. Expenses could fall by 10 percent of premiums and claims by 8 percent.
