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.
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.”
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.
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