Like it or not, the insurance market is in a period of transition, and 2016 marks a particularly large change. Last week we considered the challenges of insurance companies embracing the digital world; now we must examine how technology is changing the London insurance market. London City is renowned for success in both local and global markets; however, in order to continue to evolve, technology will play a crucial role in improving both speed and efficiency.
The digital revolution is undeniable, and embracing and adapting now is the best course of action for all businesses. Here are three factors that are determining change for London:
Storing data on the Cloud is becoming the norm for businesses across all industries, and insurance is no different. The big benefit, and the biggest change to the insurance market, is the increase in speed, efficiency and capacity for storing data. This will bring the London insurance industry into the 21st century.
However, whilst enjoying the extra space and speed improvements that remote server storage brings, there are also security risks that should be considered – and which the insurance industry, by its very nature, should be well accustomed to. Although security breaches have made big news, cloud providers are always advancing on improving security to gain trust from businesses. Insurance companies are starting and will continue to adopt to cloud computing to support their core business applications such as claims, billing and policy administration.
The insurance industry processes a wealth of information each and every day. Big Data, defined by Gartner as ‘high-volume, high-velocity and high-variety information assets’ puts pressure on competing insurance companies to demonstrate how they can effectively interpret, analyse and utilise this increased flow of information. Technology is key for storing vast amounts of data. Advanced software solutions are fundamental for storing and capturing data from across the world in one place and allow the insurance industry to effectively report and evaluate data – whether that is for managing risk, managing claims or for examining customer needs.
Last but certainly not least, changes in regulations have prompted a technological shift in the industry.
As on January 1 2016, Solvency II is in effect, and is a key driver of technological adaption. The primary goal of this is to create a cohesive EU insurance regulation, whilst reducing the risk of insolvency. Increased compliance monitoring is one way that this will be achieved, resulting in improved customer protection. Solvency II requires companies to take a more proactive approach to risk management; quality data that is easily accessible will be vital to being compliant, and here technology will provide the necessary software to ensure manageable data reporting and analysis. Ultimately, software design around the three pillars of Solvency II will allow London insurance companies to better predict risk, and plan for all possible outcomes.
Further, the introduction of Target Operating Model (TOM) is one of the largest things to hit the insurance industry in a long time. There are 15 initiatives within TOM that aim to bring the industry up to date, and utilising technology will separate the wheat from the chaff, so to speak.
Technology will be particularly impactful in dealing with customer complaints. The Financial Conduct Authority (FCA) and Lloyd’s have developed new regulations, mirroring a TOM initiative (proposed for 2017 or later), to ensure that customer complaints are logged, managed and fulfilled in an efficient and consistent manner. Software solutions, such as the VIPR Complaints Manager, are designed to deal with complaints efficiently and in accordance with the new minimum standards; with regular reporting and performance monitoring, solutions such as this will reduce manual endeavours and create a more streamlined and fast London insurance market. Adopting these solutions now place London businesses in the best possible position to stay complaint with regulations and ahead of the curve when it comes to delivering customer protection.
Do you think 2016 will be the year the London insurance market embraces technology? What changes are you already seeing? Let us know on social media, you can find us on Facebook, Twitter, LinkedIn and Google +.
At VIPR we provide solutions for Bordereaux Processing, Coverholder Management, Complaints Handling, Quote & Bind plus reporting. We also have our Audit Portal. Click on one of our solutions to find out more.