Accelerating Time to Value with Data

Novarica has seen tremendous interest in its research on third-party data, which has the potential to deliver significant value across the value chain. Data on vehicles, properties, commercial entities, and individuals is being applied to refining marketing efforts, used as pre-fill to improve CX, and employed to manage risks in underwriting and claims.

At the same time, insurer interest in artificial intelligence and machine learning has grown, which requires large data sets for training purposes. State and federal regulations, which restrict what data organizations can use and for what purposes, are an additional driver—witness the patchwork of state regulations that cover permitted uses of credit scores in underwriting.

In addition to the commercial data providers Novarica has profiled in recent research briefs, there are other sources of data that can provide insurers with unique insights, as these sources may not be as easy to monetize: data marketplaces and open data.

Data Marketplaces

Rather than selling access to their own data, platform vendors are functioning as a data marketplace, matching smaller data providers with interested data consumers. These exchanges can serve as a structured place for smaller data sellers (or for companies where data is a secondary offering) to gather additional revenue without having to independently market their data. They can also help insurers (and other companies looking for additional data) find a new, wider variety of data sets.

A handful of companies operating data exchanges for the insurance industry have emerged. Narrative, Dawex, and data.world, for example, broker data between parties in a range of industries. Narrative, founded in 2016, offers turnkey solutions for data buyers to integrate new data into their organizations and for data sellers to monetize their existing data. Dawex, founded in 2015, offers turnkey solutions related to IOT data monetization, private data exchanges, and open data exchanges. Data.world, founded in 2015, is a data exchange where people and companies can share and view a broad range of data sets. Unlike the previous two, however, it’s an open model where participants are joining a free exchange of data.

Open Data

According to the Open Data Institute, “Open data is data that anyone can access, use, and share” without incurring licensing costs. Many of the open data sets are provided by government agencies, and national, state, provincial and local governments are getting into the game. Many sites and search engines facilitate the location of data sets; however, evaluation of the data for the insurer’s use case lies with the insurer—and with literally millions of data sets available, the effort can be daunting.

Accelerating Time to Value with Data

The rich assortment of data creates its own challenge: how to efficiently vet the data and data provider? This challenge is addressed in a recently published Novarica CIO Checklist, Vetting Third-Party Data Providers. The report outlines the nine steps required to evaluate third-party data by focusing on easy-to-assess questions prior to the more challenging tasks of evaluating data quality and impact. This enables the insurer to employ the data immediately after the vetting process has completed.

Insurers are investing in the data and analytics area as it has the potential to create sustainable competitive advantage. Insurers that can accelerate their evaluation of third-party data providers can also accelerate the impact and time to value data provides.

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