Many of today’s businesses, including in the insurance sector, are sitting on decades of legacy data without appreciating its potential market value. While data is often hailed as the “new oil”, the reality is that too many companies are still not tapping this precious resource to better serve their customers and drive the business’s bottom line.
As one recent piece in the Harvard Business Review stated, “We are still living in the knowledge economy, and organisations are still trying to figure out how to unlock under-utilised assets. But the currency has changed: today’s Rembrandts in the attic are data.”
Companies not leveraging their own proprietary data to provide a more competitive offering to the market are missing out on a big opportunity, and over the longer term may even be jeopardising their own future. The risk is that if they don’t disrupt themselves, they may be disrupted by others making more intelligent use of data.
Disrupt with Data – or be Disrupted
J.P. Morgan highlighted in a 2017 report that it’s become a “disrupt or be disrupted” world, with incumbents being displaced far more quickly than was once the case. You only have to look at the turnover in the Fortune 500 over the past 50 years to recognise that change is happening more quickly, as some companies succeed at innovating while others stumble.
Leveraging historical business data to build better solutions is more important now than ever, as companies across industries attempt to retain market share amidst the fallout from Covid-19. McKinsey now estimate that the pandemic has acted as a catalyst for the digital transformation of whole swathes of the economy, in some cases by as much as five years.
Digital channels and cloud platforms have become key delivery and communication channels for business as economies remain in partial lockdown, according to Deloitte. Moreover, cloud solutions are helping to reduce costs, savings which can then be passed on to customers for more affordable products or services as budgets remain strained.
In our own case, the John Foord team has access to over three decades of historical asset reinstatement cost data at our fingertips. With the aforementioned challenges and opportunities providing the backdrop to the current macro situation we find ourselves in, we are now looking at how we can better leverage our own data to create value for our customers.
As a 192-year-old business, we now face the challenge of moving more of our operations to the cloud, not just in terms of the platforms we rely on internally but in how the market consumes our products and services.
To date, the delivery of our services has been largely offline, but with physical site inspections increasingly unavailable to our staff we are being forced to re-think which delivery channels we use and offer. We’re thinking more and more about cloud-based and virtual online alternatives.
Unlocking Value with the Cloud
To this end, we are excited about our upcoming cloud platform that will provide asset reinstatement costs more quickly and at scale. Not only will our partners benefit from having John Foord’s expertise available to them anytime, anywhere, but we expect it will also increase the use of independent valuation-based declared values in insurance policies throughout the industry.
Underinsurance of real estate assets in Asia’s hotel sector, for example, is a long-standing problem – but one that we think can be partly addressed with technology. Much underinsurance happens because of the associated time, costs, and offline pressures that physical site inspections can place on asset owners across multiple properties. If these obstacles can be removed or significantly reduced, underinsurance may become less endemic to the sector.
Going forward, it will be our data that enables and drives this innovation, though there will always remain a small number of complex risk scenarios that cannot be adequately assessed using cloud-based and data-driven models. For these, physical site inspections with “boots on the ground” will have to remain in place.
Powering our upcoming cloud platform will be cutting-edge technologies including artificial intelligence, analytics, and machine learning that will silently crunch our historical proprietary data to unlock its value and make it more accessible to our customers at scale.
In this way, we are excited to be at the forefront of disrupting the industry’s approach to risk management underwriting through technology.