According to Allianz Global Insurance report, the global insurance industry grew by 7.5%, in 2023. The insurance industry is subject to constant changes owing to frequently changing financial policies, technological advancements and increasing customers’ demands. Companies in the sector must stay abreast with the market trends and constantly evolve their strategies to gain a competitive edge. Snowflake Data Cloud is designed to transform the future of insurance with cutting-edge data and AI solutions.
With its cutting-edge data cloud platform, Snowflake enables insurers to easily integrate, manage and drive insights from vast amounts of data from structured and unstructured data. The feature of Snowflake allows insurers to overcome the challenges they are currently facing. But what are these challenges? Let’s find out!
Challenges Faced by the Insurance Industry
Data Silos Slows Down Collaboration
Data silos are one of the biggest roadblocks in the insurance industry. In most insurance companies, data is stored within various systems – policy administration, claims processing and other channel applications. Insurance companies need to integrate this data and drive insights to provide better service. But due to poor data infrastructure, most insurance companies are missing out on opportunities.
Outdated, Rigid and On-Premise Infrastructure
Most insurance companies have rigid and on-premise infrastructure. This means, they are not flexible and cannot process the growing volume of data and are costly to scale. There is a significant capital investment for maintenance and upgrades. The outdated infrastructure will not be flexible to store massive amounts of unstructured data coming from third party channels.
Cybersecurity Threats
With the advancement in technology, there has been an increase in frauds and cybercrimes. Insurance companies are actively looking for ways to reduce these threats. Cybersecurity risks have created fear in the consumers’ mind which is leading to inhibitions in their spendings and investments. Real-world examples of financial losses have captured the attention of financial leaders worldwide.
Changing Regulatory Environment
Regulatory policies of a country play a huge role in determining the future of insurance industry. If there are any abrupt changes in that country’s regulations and compliance, it significantly impacts the policies of the insurance companies. Regulations are often implemented at either state-level or national-level, which make the compliance process resource-intensive. Insurers need to make sure that their policies and practices must align with industry regulation laws, privacy laws and consumer protection laws.
Increasing Healthcare Premium
Due to inflation, there has been a rapid increase in costs in the healthcare industry. Medical treatments are becoming expensive, which is creating challenges for health insurers to offer premium packages to consumers. Insurers are struggling to create a balance between offering an all-round coverage and maintaining an affordable price for insurance.
Rising Demand for Data-Driven Transformation in Insurance Companies
Data-driven decisions will foster a positive transformation in the future of insurance companies. Here are some factors that are increasing the demand for data-led transformation:
Hyper-personalized Services
There has been an increase in demand for personalized services from the consumers. This increase in demand has led the insurance companies to look for ways to personalize their services to attract consumers. Data has become crucial to understanding their pain points, touchpoints, behaviors and preferences. Unifying data from different channels can help insurance companies achieve this goal.
Profitability
Global financial leaders are encouraging insurers to create comprehensive packages that will be balanced to withstand low-interest rates, natural calamities and any sudden economic shifts. Creating investment strategies which can prevent major losses from recurring can help insurance companies earn high profits.
Demand for Transparency
Nowadays, consumers want to take the right financial decisions for their short-term and long-term goals. Consumers are demanding to understand insurance policies and regulations and then decide on opting for an insurance package. This is leading the insurance companies to revamp their policies in simple and easy language that is easily comprehensible by them. It is important to have data insights that can be assessed to confirm the risks associated with a policy. This facilitates customers to take data-driven decisions towards their financial goals.
Role of Snowflake in the Future of Insurance Companies
Here’s how Snowflake will play a critical role in determining the future of insurance companies:
How Data Analytics Help Insurers?
Insurers need to think about risks before presenting any insurance package to their clients. By leveraging Snowflake for insurance analytics, insurers can assess risks associated with their clients. After analyzing third-party data, insurance underwriters can help the customers understand if they can provide coverage to individuals or their families. The insurance underwriters work closely with risk managers and actuaries to understand the risk associated with the clients. Snowflake provides these risk insights to insurers, which facilitates understanding how much risk should be taken on.
Benefits of Digital Transformation in the Insurance Industry
Optimized Pricing for Policies
Snowflake empowers insurers with knowledge of real-time data and other risks associated with individual customers. Understanding these factors helps insurers quote optimized pricing. Moreover, by monitoring various dynamic touchpoints they can understand the level of risk associated.
Enhanced Operational Efficiency
Insurance companies are moving towards cloud technologies to improve operational efficiency. With the help of Snowflake AI Data Cloud, insurers can now integrate various data efficiently. This integration is crucial as they help provide personalized services to customers and enhance customer loyalty. With its robust security features, Snowflake provides end-to-end encryption and compliance which ensures that customers’ data remains protected.
Elevating Insurance Underwriting Techniques
Here’s how Snowflake elevates Insurance Underwriting Techniques:
Why Choose Kasmo?
Snowflake AI Data Cloud breaks down data silos and generates insights to help insurers understand risks associated with their customers. They can create clear and transparent policies, which outline all the benefits that customers can get. By understanding the needs and demands of customers, insurers can create hyper-personalized insurance services which will foster customer loyalty. Utilizing data security of Snowflake, insurance companies can securely migrate and store their customer data from their existing infrastructure.
Snowflake plays a major role in securing the future of insurance companies. As a Snowflake Select Partner, Kasmo provides expertise in ensuring that our clients have a smooth and secure journey while implementing Snowflake cloud solutions. We leverage Snowflake to help insurance companies scale their data workloads and use cases like underwriting, claims management and fraud detection in a single platform.
