Digital transformations have changed the way risk management professionals across a wide range of industries do business, and the insurance industry is no exception. The industry is embracing the benefits that digital technology has to offer by offering policies, like affordable renters insurance, online or through an app. Risk management specialists have now been tasked with finding ways to leverage cyber-tools to the provider’s and customer’s advantage.
This can be a slow process. Professionals whose responsibilities don’t involve managing risk are often free to test various new techniques, tools, and methods that digital tech offers without worrying about the consequences of errors. Risk managers have to be more careful. They must slowly integrate new processes to ensure mistakes are limited.
That doesn’t mean they haven’t been actively seeking ways to boost their overall efficiency and effectiveness via digital transformations. The following trends demonstrate some of the more noteworthy changes that have emerged in recent years.
Focusing on Analytics
According to Accenture’s 2017 Global Risk Management Study, more than half of risk management professionals working in the insurance industry agree that using digital technology to improve approaches to data analytics is key.
These tasks are currently very demanding. Leveraging technology can make it easier to assess data and determine what kind of adjustments, if any, need to be made to strategic planning approaches.
Establishing Data Architecture
Digital transformations provide risk management specialists with greater opportunities to gather and analyze key data. However, a strong data architecture must be set in place to ensure providers take full advantage of this development. They can fully optimize the advantages of constructing a data architecture if they partner with a digital creative agency that specializes in transformations and has a strong grasp of building this infrastructure from scratch.
Having a structure in place for better data analysis has been a major goal of insurance providers. Before they can realize the potential benefits of this specific digital transformation, they must commit to a data architecture that’s secure. But, it must still allow risk managers to easily access and analyze data. The many steps involved in this process account for the seemingly slow adoption of digital transformation in the risk management sector.
Detecting Fraud with Artificial Intelligence
Artificial intelligence (AI) may soon be playing a major role in risk management. Specifically, insurers may rely on AI for fraud detection purposes. According to one expert, humans tend to be successful a mere 8% of the time when auditing Medicare cases with the goal of identifying fraud. AI, on the other hand, boasts an 80% success rate.
Again, risk management specialists have been relatively slow to adopt AI because of the potential consequences of its failure. That said, it’s clear that insurance providers have begun to understand the value of this technology. Presently, approximately 32% of risk managers are experimenting with it in some capacity. That percentage will likely increase as more professionals learn about AI’s usefulness and dependability.
Risk management is important in any industry, but it’s particularly significant in insurance. That’s why providers may appear cautious when embracing digital transformations. However, trends indicate they do fully intend to leverage technology in this manner. Those that do will enjoy a competitive edge. More importantly, they’ll serve their customers much more reliably than ever before.
The preceding was an opinion piece supplied by Jetty.com. The views expressed within the article are not necessarily reflective of those of Corporate Risk and Insurance.