We are now able to access and leverage information in new and profitable ways.
Lloyd’s last quarter reported a 30% dive in annual profits to £2.1bn. The specialist insurance market cites terrorism, climate change and cyber crime among contributing factors, as well as increased pressure from regulators and changing analytics technology. But whilst the causes may be complex, they all point to a need to adapt in a rapidly changing and unpredictable world.
Lloyd’s – which is underwritten by more than 80 syndicates – acknowledges the requirement for change: “In a market undeniably tougher than seen for many years, we have had to demonstrate our ability to adapt and take action,” said Lloyds chairman John Nelson. While chief executive Inga Beale said: “Looking across the financial sector, we live in the age of disruptive innovation. The breakneck pace of adoption of new technology, changing attitudes towards ways of working, and higher expectations of business ethics are destabilising traditional models…the importance of innovation and modernisation – to the health of the market and for the benefit of policyholders – cannot be overstated.”
As with other traditional industries, the insurance sector has often been slow to embrace new analytics technologies. However, there is now a move to modernise. Key to this is the way in which we collect, store and analyse digital information. The use of databases and cutting-edge analytical tools means less reliance on intuition and opinion, but instead allows managers to make decisions based on objective data. It is a fast, accurate and inexpensive means of optimising efficiency and creating new opportunities.
Data-driven decision making – “DDD”
Data-driven decision making isn’t new. It has long been used in the manufacturing sector. A recent survey of 50,000 American manufacturers, conducted by the U.S. Census Bureau, Stanford University and the London School of Economics, shows that in the U.S. DDD almost tripled between 2005 and 2010, from 11% to 30% of manufacturers. However, it also shows that uptake is uneven, with DDD being used primarily by larger organisations, and especially those with a strong IT culture, supported by a technically aware and educated workforce.
This is not to suggest that DDD is a substitute for the knowledge and experience of leaders. It is, however, a vital addition to the management toolkit, and, by enabling managers to respond quickly and consistently to changing circumstances, one that can mean the difference between success and failure.
Vitally, as the technology becomes more affordable and awareness spreads, there is exciting potential for smaller businesses and organisations to adopt DDD. The fact that adoption in the manufacturing sector has grown three-fold in just five years suggests that the trend is upwards, and that it is only a matter of time before the insurance sector follows.
How GIROUX can help
The explosion in information technology means that businesses have never had more data at their disposal – data which, if used intelligently, has the capacity to yield a wealth of profitable information. But without the means to interrogate this ‘big data’, the secrets buried in its depths are destined to remain that way. The rise of big data means that we are entering the era of machine learning. By making information more accessible, easier and less expensive to use, GIROUX is committed to addressing this challenge. GIROUX’s Analytical Intelligence Services (AIS) brings DDD as a service through its AIS platform supported by our teams of technologists, strategists and data scientists.
How can GIROUX make a difference to the value of your organisation through the application of its Analytics Intelligence Services (AIS)?
To find out more or to discuss your needs in detail, contact us +44 20 3287 7620