In this series, we have looked at the value digital digital data can bring to the insurance industry. Specifically, I see that there are four main areas where insurance companies can take advantage of digital twins to make material improvements.
Insurance companies, especially those with personal lines, have already made great strides in using data to improve distribution. They have focused on creating a digital copy of the business book and built digital twins of customers based on their online activities, search habits and where they shop.
While this greater understanding of the customer journey helps insurance companies become more efficient and contextually relevant in sales, leading insurance companies take things a step further. They want to offer one-click purchases and an omnichannel ecosystem so that customers can move seamlessly between channels.
But there are additional opportunities for insurance companies to improve how they serve existing customers and for cross-selling. The more you know about the customer on the phone, the better you can provide targeted advice and services.
Imagine, for example, if you had digital twins not only for the customer but also for their insured assets and for external events that affect their decisions or their assets. You can pull these threads together into a much more comprehensive view and use it to provide a superior experience.
In issue guarantees, real-time streaming data can provide a more nuanced understanding of risks and improvements in pricing. Leading insurance companies also want to offer customers real-time risk prevention and risk-DNA-based insurance ̵1; in an effort to be a more holistic provider of protection for their customers, not just a company that pays you when something bad happens.
For commercial insurance companies, it can be a challenge to get a more homogeneous data set across customers, but I think the benefits will be worth it. We have already seen it for employee compensation, with payroll and ERP integration that helps carriers understand the changing workforce, associated premium changes and reduce the need for premium revisions. I recommend commercial insurers to explore this in terms of coverage (property, liability) and sector (energy, construction, marine).
Within the four walls of an insurance company, there is a significant opportunity to increase efficiency and improve decision-making by adding connected instruments throughout the company. Accentures Operations has proven this over the years in corporate functions such as finance, HR and purchasing. Now it’s time to turn our attention to the more traditional insurance functions such as distribution support, underwriting, claims and back-office administration functions.
With building a digital twin of the business, two benefits are quickly emerging:
- Automation options comes with the traditional analysis of keystrokes and process steps.
- Intelligence possibilities comes when you look at how to use that data in a different way. This is probably where the greater value comes from.
As an example, imagine if you could take a digital mailroom feature that scans and stores digital copies of physical documents and turns it into something that basically triagulates and automates work in different ways based on the type of document and where the customer is in the transaction process.
More efficient and faster complaint handling is another area where I see enormous opportunities to take advantage of digital twins. We have already noticed leading insurance companies seeking real-time optimization of coverage, integrated infrastructure for recovery and use of human + AI to improve staff and customer experience.
For example, imagine you are offering personal car insurance and one of your customers is involved in an accident. Think about what insights you could gain if you had access to:
- Telemetry data indicates what happened to the car at the time of the accident – how the wheels turned, the car’s speed and how hard the driver braked.
- Weather patterns which explains the driving conditions when the accident occurred.
- Driver information like how well they slept last night and if they were distracted by something they saw or by talking to a passenger.
- Service data for example, how long it will take to get the car repaired, how long the waiting time is for the parts you need and if you are connected to your own supply chain for service via your network partners.
The more you delve into the details, the more opportunities you can see to take advantage of digital twin data throughout the insurance industry.
In our last post in this series, I will look at how you can put intelligent digital twins to work to get a better overview of your business.
To learn more about the technology trends that are expected to affect insurers, read our report: Technology Vision for Insurance 2021
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Disclaimer: This content is provided for general information purposes only and is not intended to be used in consultation with our professional advisors.