CNBC investigates how digital innovation is reshaping industries by disrupting existing business and operating models. This episode looks at the impact of digital transformation across the energy (B2B) sector.
Digital transformation enables insurers to take advantage of many new opportunities. But first, they must define their strategic priorities. That means reevaluating business models, processes, products and service.
There are three key challenges insurers should address along the way:
- They must better manage risk mitigation by evolving from a financial loss compensation focus to include physical risk prevention.
- They must face down disruptive competitors by enabling rapid solution development.
- They must manage the enormous amount of data generated by connected networks to develop and deliver leading-edge products and services.
The ability to address these challenges effectively will enable insurers to successfully compete in the digital economy.
Customer expectations have changed. Evolving customer demands coupled with technological advancements mean that insurers are expected to provide risk prevention in addition to crisis management. These benefits can be managed by technology that interacts with customers across multiple channels.
Essentially, technology is allowing insurers to move into a world in which risk is more tangible.
Keeping up with disruption
Nearly 80% of insurance company chief information officers expect technology to significantly change or transform both the industry and their organization in less than five years, according to Ovum. More than a third of insurance companies are already using or developing IoT projects; another 25% are actively evaluating IoT projects.
These new technologies increase the risk to some incumbent carriers that new entrants will cause business disruption. Startups may lack the deep actuarial and underwriting experience and capabilities of established carriers, but they have access to customers, IoT infrastructure or the ability to process data in real-time.
As the volume of data grows, insurance companies must use solutions like AI and machine learning to process large amounts of data. The ability for insurers to adopt these types of platforms now can lead to better product and service agility. By using technology like AI and machine learning, insurers can deliver new products and services to customers while more effectively managing their existing portfolio. With a strong digital core, insurers can bundle products and services to deliver personalized offerings to specific customer segments and distribution channels.
The change afoot
The digital economy is still evolving. By aligning transformative actions across these three priority areas, businesses can more easily manage the transition in stages, creating a digital core and then extending digital functions across the enterprise. The reduced reliance on traditional risk-assessment and data-processing methods will provide insurance customers with a much more personalized experience via a multi-channel environment. These steps will reduce the possibility of business disruption and propel insurers to fresh success.
Insurance for the greater good
Many of today’s insurers are passionate about digital transformation and what it can do for business and for society.
Why? Because the industry is witnessing a steady shift from a centuries-old business model that has the potential to dramatically improve lives worldwide.
Rather than just compensating for financial loss, which insurers have done remarkably well, the industry is getting geared up to help people prevent loss, lead healthier lives, live longer and drive safer.
In short, digital transformation in the insurance business will potentially do more than any other industry to further society’s long-term well-being.
source and more: www.propertycasualty360.com
Industry and business professionals joined academics in digital business and data analytics at the Digital Economy Summit in Rotterdam on 20 June. The community of innovators gathered to explore digital phenomena and data analytics research – and their applications in the business world – at the event organised by Rotterdam School of Management, Erasmus University (RSM) as an initiative of the forthcoming .
Invited speakers and panellists from diverse professional backgrounds contributed their expertise on the data revolution and its implications for business strategies. The Summit was a full day of presentations, panels, and discussions to explore digital business, digital strategy, business analytics, artificial intelligence, digital experimentation and privacy. The Summit concluded with the inauguration of Ting Li as Endowed Professor of Digital Business at RSM.
Prof. Eric van Heck gave a welcome address. He emphasized the interdependence of academic research and the role of businesses in applying it for positive change. “Businesses use innovation, which is found through research and science, for real-world impacts,” he said. As Chair of RSM’s Department of Technology and Operations Management, Prof. Van Heck notices a response to the data revolution among his students. “Years ago, many students would avoid working with data analytics and algorithms. But now, we see a growing trend of students asking for these courses because the job markets are asking them for these skills – it is a growing expertise!”
Data-informed business strategies
Professor Rob Kauffman from Singapore Management University presented his research of the living analytics revolution; how people leave digital traces of what they have been doing, and how data scientists can make meaningful inferences using this information. He illustrated the impact of smart analytics in large data sets, potentially revealing ‘digital canaries in urban data mines’, the subject of one of his research papers.
Prof Kauffman reminded participants that “companies are not the central nodes in society” when referring to how businesses can create better impact. He suggests that there is an increasing demand for data-informed business strategies that reflect society’s needs, likening this to the current need for evidence-based policy-making in EU politics.
Good data science from good data science teams
“Private business is also driving that next wave of innovation,” says senior data scientist Adam Hill of data intelligence lab HAL24K, referring to the opening address. Hill discussed the use of analytics in digital business and what makes good data science. Data science “derives actionable insights to improve business,” he said. He refers to methods such as machine learning and real-time data and decision-making to illustrate their uses in examples like predicting air pollution, optimizing traffic flow, and public bike distribution. At the end of his presentation, he advises that an excellent data scientist should possess “a diverse collection of skills that cover statistics, programming, databases, communication and business domain.” Good data science comes from building data science teams, he said.
“We are at an inflection point for data-driven management,” says Prof Ravi Bapna of Carlson School of Management at University of Minnesota. His presentation highlighted the challenges of using data analytics in business. He argued that there are three main challenges:
- executive-level awareness of the art of analytics
- a shortage of talent
- organisational muscle and capabilities.
“Analytics ‘translation’ [into business strategy] is by far the biggest deficiency [in companies],” argued Prof. Bapna. To tackle these problems, he offered an organisational learning plan that consists of a test-and-learn culture, gaining experience with large-scale data processing, and moving from point optimization to end-to-end-process optimization using audio-visual and language processing.
Eight weeks from idea to market
John Staunton, CEO of Countr POS, an online retail Point of Sale platform, presented case studies of businesses and their use of AI, machine learning, and behavioural analytics. One case study of supermarket chain Spar’s introduction of cashier- and POS-less purchasing system showed that relying on mobile, self-serve, and digital payments, machine learning learns to personalize the customer’s in-store experience. It can take as little as just eight weeks from idea to market, Staunton suggests, and this is how digital business should embrace the analytics revolution. Echoing previous speakers, he underlined the importance of collaboration within business analytics as “nobody is an expert at everything [and] closed ecosystems do not work.”
Learn to manage new technologies
Senior Associate Dean of Fox School of Business at Temple University, Prof. Paul Pavlou highlighted the foundations of digital business strategy and offered an illustration of its trajectory. Referring to recognizable phenomena such as digital platforms, AI, and the Internet of Things (IoT), Prof. Pavlou offered a prediction of the rise of Future and Emerging Technologies. As digital business advances into the Fourth Industrial Revolution, “sophisticated technologies are likely to emerge, such as nanotechnology, new materials, biometrics, and quantum computing.” He advised that learning to manage these technologies would allow for “sustained competitive advantage.”
The ethics of data analytics for privacy and data sovereignty
Moderated by RSM’s Prof. Peter Vervest, the Digital Economy Summit concluded with a panel of data experts from business and academia: Jan-Kees Buenen of Synerscope; Martijn Imrich of Xomnia; Dr Nelson Granados of Pepperdine University; and Prof. Rajiv Garg, of University of Texas at Austin. The interactive discussion addressed questions from participants, and insights and opinions from audience members were welcomed.
The panel tackled the debates surrounding co-creation in the era of big data. An intricate discussion towards the end of the session addressed the ethics of data analytics for privacy and data sovereignty. Prof. Garg dove deeper into this question and raised issue of bias of machine learning and AI for social groups such as nationality, race, and socio-economic status. An argument offered was that it is not the tools themselves that carry these biases but how practitioners program them. Panelists, supported by various participants in the audience, agree that such flaws do not invalidate the pursuit of data science; on the contrary, it is motivation to direct further cross-sector research to confront this issue.
The strategic council of the digital economy has called to accelerate the creation of the Digital Development Agency (DNA).
The Strategic Council for the Digital Economy, chaired by the Head of Government, was born out of the Digital Tunisia meeting organized in 2013. This governance structure, which brings together actors from the public and private sectors and civil society, is intended to oversee developing the national strategy for the digital economy and monitoring its implementation, as per online news portal THD.
In an address delivered at the end of the meeting of the Strategic Council of the Digital Economy, the Minister of Communication Technologies and Digital Economy, Anouar Maarouf, said that the Digital Development Agency will have the mission of accelerating the implementation of projects that are part of the digital transformation, particularly those related to the digitalization of the Administration and the improvement of the digital infrastructure in the regions.
According to THD, Anouar Maarouf indicated that the Council welcomed the deployment of an integrated National Network of Administration, the granting of nearly forty IoT licenses and the progress of certain other projects, particularly those related to the dynamization of the startup ecosystem in Tunisia.
The Minister of Communication Technologies and Digital Economy also returned to all the measures announced by the head of government, Youssef Chahed, on the sidelines of the Tunisia Digital Summit.
Anouar Maarouf reminded that it will be possible, from 16 April, to obtain free birth certificates and online business registers and to use the QR Code instead of the certified copies. “The QR Code is currently integrated into pay slips and some university degrees and will be generalized gradually,” he noted, as per THD.
The mobile payment will also be effective from April 10 and regardless of the telephone operator or the banking organization users.
Anouar Maarouf added that the Strategic Council of the Digital Economy has made several recommendations whose objective is to promote the digital economy and its role in the national economy.
In this context, the Strategic Council for the Digital Economy has advocated the creation of a state IS. “This structuring project will play an important role in the management of the state’s financial resources,” said the ICT minister.
According to THD, the Digital Economy Strategic Council stressed the need to accelerate the creation of the fund of funds, a financing and support mechanism dedicated to Tunisian startups.