Motor insurers unprepared for digital risks

Just 14% of motor insurers believe their organisation is “very prepared” to manage the risks presented by technological change, and only 18% think the industry is fully ready.

 

Tuesday 25

Motor insurers unprepared for digital risks

That is according to a new report by LexisNexis Risk Solutions, which reveals email security, data protection and identity theft are the top concerns facing insurers.

 

Cyber crime, connected technology, social networks and malware spread were also identified as concerns for the industry, with LexisNexis saying this reflects “the huge volume transactions” and “constant threat of fraud” in the sector.

 

However, its UK insurance vice president, Selim Cavanagh, said: “Advances in data analytics are enabling insurers to understand and segment customers more effectively and make more informed risk decisions.

 

“It’s clear that the opportunities through digitalisation are huge, and now is the time to set in place robust strategies to deal with the emerging digital risks.”

 

The research involved a survey of 55 motor insurance professionals, with the majority spending over 80% of their time pricing and underwriting policies.

 

Some 89% of the respondents said they see emerging technologies and digitalisation as a challenge, with 42% having already faced operational issues as a result.

 

It was also found that 40% have encountered price competition, and a further 40% have faced data protection challenges, however, 26% have not confronted any of these issues.

 

To address this, LexisNexis said that insurance providers should be working with partners who are experienced in the applicability to process personal data disclosure, and data quality management with minimal risk.

 

“The motor insurance market is undergoing major changes and challenges – not least from agile InsurTech start-ups that are seizing the digital advantage over more traditional operating models,” Cavanagh continued.

 

“Overall the report highlights the importance of planning for digital risk and the need to ensure that future offerings are robust and agile enough to deal with a range of threats if or when they strike.”

 

Most popular

  1. Cyber incidents top ranking of business risks in 2020

    An increasing reliance on data and IT systems has seen cyber incidents shoot to the top of the most pressing risks facing businesses worldwide, research by Allianz has uncovered.

     

    Friday 17

    17 January 2020

  2. Risk managers overwhelmed by new technologies

    The majority of risk managers worldwide cannot adequately assess the threats posed by new technologies, research by Accenture has found.

    10 December 2019

  3. Blockchain to save financial services firms $7bn by 2024

    Financial institutions will save $7bn (£5.43bn) by 2024 thanks to blockchain technology and the automation of customer checks, a market research firm has predicted.

    05 November 2019

White paper

  • Quarterly InsurTech Briefing Q1 2017

    Why InsurTech? A Pressured Insurance Value Chain

    By Andrew Sagon, Andrew Johnston and Matthew Wong

    InsurTech is a burgeoning phenomenon that is modernising the insurance industry. It is disrupting the traditional value chain whereby insurers offer loss protection, and shifting the emphasis to risk mitigation. Incumbents face disintermediation as investors in search of higher yields pour money into insurance-linked instruments in the capital markets. And entrepreneurial businesses are targeting friction costs and inefficiencies within every aspect of the traditional value chain.

     

     

  • Insurance big data – float like a butterfly, sting like a bee

    Nimbleness and agility will unlock potential

    By Elinor Friedman, Andrew Harley and Klayton Southwood

    Recent Willis Towers Watson surveys in the U.S. have shown that P&C and life insurers in developed markets are taking seriously the potential of big data and predictive analytics to improve their businesses. Nimbleness and agility, rather than brute force, are likely to be key to realizing that potential.

    Download PDF

  • The new era of insurance analytics

    Driven by technology, toolkits and talent

    By Claudine Modlin and Graham Wright

    Advanced analytics is helping some insurers offer innovative products and solutions. What do insurers need to know about the changing nature of analytics and whether it is worth the investment? Claudine Modlin and Graham Wright discuss technology, toolkits and talent — topics that may help you decide.

    Download PDF

  • How can we manage the dynamic nature of cyber-risk?

    Risk transfer is part of a comprehensive solution

    By Adeola Adele, Patrick Kulesa, Kevin Madigan and Alice Underwood

    Given the dynamic nature of cyber-risk, taking a multidimensional approach that integrates board governance, technology solutions, behavioral change and risk transfer solutions can help reduce risk to a manageable level.

    Whitepaper Form