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The Internet has enabled convenience and personalization at a level never possible before, forcing every industry to step up its game or be left in the dust by more tech-fluent startups.

It has also opened up customer communication for insurers while birthing an entirely new economy. Companies like Uber, Airbnb and Fiverr—all under the access economy umbrella—have drastically altered what it means to rent, own and even work.

For workers compensation insurers, it means that payroll still determines the premiums for people who are full-time gig workers. On the homeowners front, insurers have to incorporate the risk of unknown Airbnb renters in a policyholder’s home. As for auto insurers, they face a future in which consumers might stop owning cars in favor of ride-sharing options.

To stay competitive, insurers will need to grapple with these new economies while rising to the same level of convenience that consumers have come to expect from the digital age. It’s a tall order—one that many commercial insurers find overwhelming.

However, the access economy has brought with it a huge boon to the insurance industry that many companies have yet to fully embrace. In particular, the access economy provides easy access to a vast array of data points that can be analyzed and implemented to develop better predictive models. With the rise of the access economy, the commercial insurance industry no longer has to rely solely on the data it collects. Instead, it can become a data consumer.

The Benefits of Being a Data Consumer

Technology hasn’t just made data more accessible; it has created new ways for that data to be analyzed and applied and has improved data consumption within the commercial insurer community.

Data providers can now take demographic and firmographic information from a vast array of publicly available sources and structure and clean and prepare it for application. This can help simplify the process of completing and verifying application information and can ease customer experience friction.

Providers can also monitor many of these public sources in real time so insurers can be notified of business changes that might affect their risk assessment. This information can be used to inform price renewals and make it possible to auto-renew customers whose status hasn’t changed. Add in third-party transactional data obtainable from a data consortium, and commercial insurers now have the power to remove virtually all blind spots in their own data and significantly improve the accuracy of their predictive models.

All these new data applications from disparate sources allow insurers to connect dots in ways that weren’t possible before. This not only leads to more accurate risk assessment but also allows insurers to automate many time-consuming parts of the claims and underwriting processes. With modern technology, insurers have the power to process applications without any effort from a human underwriter.

But having this technology readily available doesn’t guarantee you will leverage it effectively. To use this information to its fullest potential, you still need to have a clear idea of how to make it work for you.

Improve Your Data Consumption

Having so much data at your fingertips can be overwhelming. To ensure you get the most out of the data you consume, ask these three questions:

  1. What are your objectives?

Advanced analytics have the power to glean answers from unstructured data sources such as claims adjuster notes. To get valuable answers, however, you need to ask the right questions. A vague idea of where you want to go isn’t enough—it’s vital that you ask specific questions.

Don’t just say you want to reduce loss ratio. You need to know how you want to accomplish it: Do you want to better price policies or more effectively manage losses via fraud detection? Only by understanding what you want from the data will you be able to determine what sources you should pull from.

  1. How will the data be integrated into key decision points?

InsurTech is set to become a billion-dollar industry in the next few years, which means a lot of companies will offer new data tools for insurers to use. However, those resources will be valuable only if insurers can properly integrate them into the business.

For instance, if you’ve found a data analytics product that helps to identify claims that are likely to become severe, you also need a plan for how this information will alert the right people or automatically trigger the desired action. By identifying data’s place in the decision-making process, insurers can better focus their consumption and use the right data points in the most profitable manner.

  1. How will your data stay current?

Data isn’t stagnant. It needs to be updated and reassessed to remain useful. Many organizations don’t have systems set up to do this easily, however. If your internal teams have to do a lot of heavy lifting every time the data needs to be updated, then you need to rethink your maintenance strategy.

Use internal data to analyze productivity and discover inefficiencies in your own system. You’ll be relied upon not only to extract data but also to collect, model and ultimately report your results accurately and efficiently. As regulatory and public scrutiny increases over how large companies handle consumer data, insurers must get a handle on data management because they’ll be held responsible for any mistakes that might arise from it.

Increased access to data looms large because it allows insurers to fill in the blanks when loss history or other important information is missing. A larger set of data with third-party experience leads to more sophisticated analysis and the identification of trends that insurers wouldn’t be able to see on their own. By moving from individual organizations collecting their own data to consumers of a complete data ecosystem, insurers can face the future of insurance with confidence.