35% of Insurers have started Big Data & Analytics projects
35% of Insurers have started Big Data & Analytics projects
The effective development of innovative projects is closely linked to the collaboration between different units such as business and compliance. In addition, more testing will be done in the blockchain field.
The results of the second "Big Data & Regulation" research stream of the Digital Insurance
Hub, promoted by CeTIF in collaboration with CRIF and RGI, have been published.
Italian insurers have started a digital transformation process that is leading to numerous developments in the insurance value chain. One of the main areas of investment is related to the implementation of big data and analytics, which allow an integrated and efficient management of data sources available to companies. However, data management leads companies to face problems regarding the compliance of regulations such as the GDPR, to which it is necessary to find solutions to avoid blocking innovation processes. In addition, insurers need to evaluate and make testing regarding innovative technologies, as in the case of the blockchain.
The topics discussed during the second research stream of the Digital Insurance Hub were: "Big Data & Regulation", promoted by CeTIF in collaboration with CRIF and RGI, which obtained the participation of 6 companies operating in the Italian market (Arca Vita, Credemassicurazioni and Credemvita, Generali Italia, Helvetia, ITAS Mutua and Munich RE).
The big data & analytics projects
During the research process, strategic plans, websites, and specialized magazine articles were analyzed for the implementation of big data and analytics projects of 36 insurers operating in Italy. The results of the study show that 35% of companies are involved in this kind of projects. Comparing this figure with the offer of policies combined with IoT devices of the same companies, it is found that 58% of these offer such products. Therefore, there is a gap that shows that some insurers, despite having data sources as the IoT that allows
collecting a lot of information on the habits of their Policyholder, have yet to start further projects to grasp all the opportunities that derive from their information assets. Another important thing of this analysis is that most insurers do not invest in this type of technology; in fact only 11% of the companies analyzed speak of the related investments in the industrial plans. The Italian insurers are therefore adapting an incremental innovation approach, intervening on specific areas of the insurance value chain, and then modularly developing further projects.
The implementation of GDPR Regulation
The management of data is at the base of the development of innovative projects, precisely for this reason the introduction of such initiatives has required Insurers further commitment in the implementation of the European General Data Protection Regulation. The companies have adopted different approaches in the compliance to the regulation: from a study made by CeTIF in 2017 on a group of 10 Insurers, half of these had already started the processes necessary to be compliant within the deadline set by the legislation, while the other part of the sample stated that they had planned activities, but did not start the regulatory compliance process. Morever, the analysis showed that the insurers that have been most effective are also those that have envisaged a greater involvement of the compliance function in the implementation of innovative projects, not only in the final stages but also in the design of the product. It is clear that Insurers can combine the need to introduce technological innovations to evolve their business and operational models with the need to be compliant with the increasingly complex regulatory framework, using tools that refer to the agile, inter-functional team-based model that guarantee greater effectiveness in the development processes.
Blockchain and applications for insurance companies
During the Workshops, we also analyzed technologies that are representing a innovation in the insurance field, it is the case of the blockchain. This technology has had a great success in the context of financial services as it is at the base of the issue of cryptocurrency, thanks to the use of public distributed registers, but however, some companies are testing the use of private blockchains that may have a property and it is therefore possible to establish rules for the access and for the visibility of the information contained therein. Additionally, many applications have been identified in the insurance field:
- Anti-fraud, a single register shared between Insurers would allow to perform more checks on the reported claims;
- FNOL, thanks to smart contracts, contracts which are activated automatically upon the occurrence of certain conditions, it is possible to settle a claim without the policyholder having to report it;
- Healthcare, , each person can create his/her own medical folder on blockchain by deciding who can access it, the Insurers could have a clearer view on the client they are about to insure;
- Reinsurance, in the case of a coverage on specific events such as catastrophe events, the reinsurer could allocate the capital to cover the claim at the time it occurs, eliminating the communications that exist with the company and, therefore, intervening more rapidly.
CeTIF , The Research Center on Technology, Innovation, and Finance Services (CeTIF), since 1990 carries out studies and promotes research which are focused on technological and organizational innovation in the banking and the financial industries and investigates the adoption of innovative ICTs and their impacts on processes and organizational structures.
Each year, makes more than 15 Observatories, to which 10,000 professionals from CeTIF network can participate, and also organizes over 10 workshops dedicated to banks and Insurers with the aim of encouraging the exchange of experiences among the participants.
CeTIF has also carried out international research projects in the market in collaboration with Financial Institutions, academic institutions and Insurers.
CeTIF is currently fostering collaborative relationships with: Banca d'Italia, ISVAP, ABI, ANBP, ANIA and CONSOB. CeTIF is also a founding member of FIT: the European Association of Research Centers on Finance and Information.
CRIF is a global company specializing in credit bureau and business information, outsourcing and processing services, and credit solutions. Established in 1988 in Bologna (Italy), CRIF has an international presence, operating over four continents (Europe, America, Africa and Asia).
CRIF is currently the top group in Europe in the banking credit information sector and it is one of the main players in the global market of business & commercial information integrated services and in the credit & marketing management services.
More than 6.300 banks and financial institutions, 44.000 business clients and 240.000 consumers use CRIF services in 50 countries.
RGI is an independent Software Vendor, leader in Europe in the digital transformation of insurance companies.
It has been operating for 30 years as a solid point of reference for the development and implementation of dedicated systems for companies, bancassurance, agents, brokers and financial advisors. With a team of 800 professionals specialized in IT and insurance business on 12 locations: Italy, Ireland, France, Germany, Tunisia and Luxembourg. RGI digitized the business of 103 insurance companies and 300 brokers in EMEA.
RGI has an exclusive vertical focus on the insurance industry and is specialized in the development and implementation of modular insurance solutions of the Policy Administration System for all distribution channels and all business lines