This article was originally published by David Clamp in Global Banking and Finance Review, on January 18, 2018.

I recently attended Connect Media Consulting’s European Digital Insurance Summit. This year’s event brought together over 50 senior insurance thought leaders, and its innovative and interactive nature (think tank challenges, working groups, and case study sessions) created lively and challenging debate about the future of digital insurance in an era of digital disruption.

So what are the key challenges and opportunities that senior leaders in the industry face today? Here is a summary of my top three takeaways.

Data and Advanced Analytics

Data enables insurers to see customers as unique individuals with their own needs and requirements, allowing simplification and personalisation of the customer experience at every touch point.

However, right now point of sale and claims processes are often over-complicated. So,  how can insurers reuse data in a smart way so that they can better understand both the customer and their risk?

Here, the use of predictive analytics to provide bespoke offerings tailored to the needs of customers, plus personalisation of the customer journey, will be key to delivering more accurate customer profiling.

This will help reduce the need for repeat questions, duplicate requests or re-keying of information as well as enabling insurers to use existing data sources. But in order to do this, insurers need to build trust and demonstrate that the information customers are sharing is of real and timely benefit to them.

There is clearly no shortage of data, but as an industry, insurers are still struggling to get any meaningful insight that produces action-orientated decisions. In short, the industry needs to get back to a place where data is an enabler, creating a customer-centric culture and providing a platform for innovation.

Changing Business Models

New technology is disrupting industries and changing customer expectations and demands.  In the insurance sector, on-demand, usage-based, peer-to-peer and social-enterprise business models are emerging because customers believe they are getting less value from their conventional Insurance.

New competitors, ranging from many Insurtech start-ups to Amazon and Google, are now playing in this space, and their digital capabilities and resources do not respect any established industry boundaries. As a result, they have the agility and speed to adopt and implement change far quicker than traditional insurers.

Innovation is happening on a massive scale, so for large-volume insurers to remain competitive, they need to radically review their current ‘after-the-event’ proposition and look at what new products, business models, and capabilities they will need to fully support customers in a world of loss prevention.

They certainly need agility to be able to quickly build new products and services and adapt existing systems and processes as customers’ needs continue to evolve.

Smart Mobility

Disruptive trends such as urbanisation, a diminishing emotional attachment to cars, and a move to a sharing economy coupled with technology are creating the perfect storm taking us into an age of smart mobility.

Ernst and Young confirmed that the race to autonomous cars is fully underway. Many mainstream manufacturers are aiming to have level 5, fully autonomous cars on the road by 2021. Multi-billion pound investments from Tesla, Ford, and BP Energy are driving this forward at a rapid pace.

That said, there are still a lot of unanswered questions keeping insurers awake at night. How do they assess the risk and failure of a self-driving algorithm? How can they address legal disputes over where and how the fault occurred? Who is the customer?

This could result in lower frequency of claims but higher value claims due to expensive sensors and legislative ambiguity, not to mention the ethical challenges that are currently being debated (do you programme the algorithm to protect the passengers or the pedestrian?)

Using AI, chatbots, and machine learning, the claims handling process could look very different in an autonomous world. For example, an accident occurs and is detected by sensors. The chatbot communicates with the customer via SMS, a sequence of questions is answered, the chat transcript recorded, a claim set up and then the repairer is automatically appointed and authorised.

Data from autonomous cars will give insight beyond what insurers have ever had before. It could indicate everything from the behaviour of passengers (weight on seats), suspension conditions, the ability to identify pot holes/black ice spots, to prevailing weather conditions prompted by use of automatic windscreen wipers.

There is a wealth of data that insurers can use to provide bespoke quotes based on usage, but the biggest risk is that they currently do not have access to this data. Therefore, insurers need to be collaborating with manufacturers now to ensure this happens.

In Summary

It was clear from the summit that the key pain points in the industry are speed, agility, and adoption. How can insurers react quickly to new and emerging trends and technological disruption; how can they make sure they have access to that all-important data?

One vendor who attended the summit and could certainly help deliver the agility and digital foundation many insurers are looking for is OutSystems.  Not only does OutSystems have a proven track record in the insurance sector, but its market leading solution also combines low-code development with advanced mobile capabilities so that it can be easily integrated with existing systems.

OutSystems concentrates on building a digital framework that can tackle the changing demands and expectations from both the insurer and the wider business, enabling insurers to scale as demand grows.

The summit confirmed that doing nothing is not a viable option. Now is the time for insurers to have clear leadership, fully grasp the great opportunities that digital, prolific data and changing business models will bring, and to innovate in new and exciting ways so they can continue to offer value to their customers.