Tag Archives: Fusion

Core Systems and Insurtech (Part 2)

The first part of this series can be found here.

The digital insurer uses fusion to leverage the power of data — i.e. content.

So what is fusion? It is a platform, with a new architecture from the ground up, designed for molecular binding of transactional, analytical and engagement capabilities. This is not a retrofit architecture but a complete redesign with fusion at its core. The fusion of transactions, analytics and engagement capabilities is only possible with an architecture designed with common capabilities across processing, insights and engagement needs with a strong “find and bind” integration architecture to tap into an ecosystem of innovative services. It is open to non-native components, supports rapid change to adapt to shifting industry needs and allows for continuous innovation. It can generate analytics and calibrate the customer-centric solution without losing speed or increasing total cost of ownership.

Content is one of the most underutilized assets in insurance but is quickly becoming a strategic asset in the digital era, so it is helpful for us to understand all of the types of content that reside within the content chamber of the digital fusion reactor. Here is a non-exhaustive list:

  • Regulatory data (rates, rules, forms)
  • Internal data compiled over time — such as customer, transactional and actuarial data
  • Localized data (region or country-specific)
  • External data related to risks and underwriting (MVRs, MIB, Rx, usage patterns, GIS, climate information and more)
  • Social media data, social preferences, customer sentiments, buying behaviors, satellite images, etc.

Content is no longer defined as that which is stored within the enterprise but as all data that is accessible to the enterprise. At this point, it is not only about having all these data streams available but also having the ability to bring diverse data sets together with a context for building insights to realize their competitive advantage. So a practical definition of content is: all the specific data about a person or business that allows you to rapidly set up a product and assess the risk specific to the customer based on their unique situation, region and risk profile. The better an insurer is at using applying fusion to their content, the more value their data will produce.

Traditionally, content has been indigenous to individual apps — transaction-systems data was not easily accessible by engagement systems without building expensive wiring. Insights generated from analytics systems are often not actionable at the point of sale or service.

The content platform helps liberate the data from apps to centralize data access and storage. In short, apps without content is like a body without a soul. A true digital platform architecture must support these to enhance the benefits of apps with internal and external content. And, most importantly, it must exist within a content framework that automatically updates itself when the situation, regulation and information changes. Content should reflect current reality.

See also: Finding Success in Core Systems  

In my next post, we’ll shift the discussion to “Chamber 3: The Customer Journey.” How does this fusion of apps work toward keeping customers engaged? Will it truly improve the customer experience and our knowledge of customers? I hope you’ll join me as we work toward becoming digital insurers who are focused on transformation that will yield real growth.

This article was written by Manish Shah and originally appeared on Majesco.com.

Autonomous Car Tech Reaches Mid-Market

As part of the 2016 edition of the Usage Based Insurance study, we analyzed the impact of autonomy on the insurance market. We forecast that 380 million semi-, highly or fully autonomous vehicles will be on the road by 2030.

This might sound like a lot, but then at the Consumer Electronics Show in Las Vegas we heard that new manufacturers are entering the race. Typically, we expect the luxury brands to foster the development of autonomous vehicles (AVs), with Mercedes, BMW and Tesla all topping the list of development activity. This time, however, it is the mid-market brands such as Nissan, Ford and GM that are making the announcements.

All three arrived at the show with news and partnerships up their sleeves as the competition grows ever more intense.

  • Nissan, in partnership with Renault, announced 10 vehicle models with autonomous capabilities on the road by 2020, with single-lane control from this year and rolling out multi-lane control intersections assistance from 2018 onward.
  • GM announced a $500 million investment in Uber rival Lyft, which GM says could lead to the development of a fleet of driverless cars, some available for hire, as well as a network of car rental stations. This announcement follows news regarding the development of GM’s self-driving version of the hybrid Chevrolet Volt.
  • Ford revealed an agreement with Amazon, aimed at linking cars with connected homes and the Internet of Things. Ford was also expected to announce a tie-up with Google, but that did not happen, possibly because of recent regulatory proposals limiting driverless vehicle testing in California. Instead, the car maker stated that it would triple the size of its Fusion Hybrid autonomous research fleet this year to 30. Ford will also integrate new solid-state lidar sensors that create real-time 3D models of the surrounding environment.

Although many autonomous functions, such as cruise and parking, are aimed at improving comfort, most of the development today is focused on safety and crash avoidance.

These capabilities will have a direct impact on the insurance industry a lot sooner than the driverless car. We analyzed and quantified that impact in the study to precisely estimate the share of accidents that could be avoided with the introduction of advanced driver assistance systems (ADAS).

For example, we concluded that frontal collision avoidance and cruise systems could reduce losses by as much as 50% (depending on the level of sophistication).

ADAS functions could therefore lead to a reduction in accidents of between 30% and 40%, with AVs beginning to have a significant impact in mature markets from 2023 onward. In the most advanced countries, such as Germany, premiums will decrease by as much as 40% between 2020 and 2030.

With the end of the statistical actuarial model also approaching, insurers will need to be acutely aware of the car technology evolution speed. The car without accident will be on the road long before the car without driver.

The 2016 edition of the UBI Global Study was launched last month; It covers the impact of ADAS on insurance premiums in details and with a market forecast up to 2030. You can download the free abstract here.