"The real differentiator will be the quality and completeness of providers’ proprietary member level data."
- Tim Stoves - Lumera
Amid growing pressure to extract value from artificial intelligence (AI), insurtech company Lumera has warned that many in the group protection industry lack the high-quality data foundations needed to realise the full potential of these technologies.
"AI is understandably attracting significant attention across the group protection market," Tim Stoves, group protection lead at Lumera, says, "but the industry needs to recognise that the technology itself is only part of the equation.
"Without the right data foundations, even the most sophisticated AI capabilities will be limited in what they can deliver."
Lumera says that the vast volumes of unique operational data generated by group protection providers through quotations, underwriting decisions, enrolments, benefit changes, claims and member interactions represent a distinctive proprietary data asset for insurers.
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However, Stoves adds that "over time, AI is likely to become increasingly available across the market and is unlikely to remain a core source of competitive advantage in its own right," meaning insurers will face growing pressure to demonstrate the value they can derive from the technology.
Lumera notes that this could be a particular challenge for insurers using legacy, policy-based systems, which may not track individual members' cover and circumstances over time.
"The real differentiator will be the quality and completeness of providers’ proprietary member level data, and how effectively they use it to create value, deliver better outcomes for customers and reinforce trust," Stoves continues.
"By connecting information on members’ cover, claims and interactions over time, insurers can build a richer picture of their customers and unlock greater value from AI."
