January 31, 2019 | Written by: Jeff Hong
Categorized: AI | Cloud | Data | Storage
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Despite the notion of insurance as a stodgy business, today’s insurance industry is arguably in the process of reinvention.
The insurance industry is hitting a developmental milestone—triggered by rapid technology and cultural changes including:
- Chips (e.g., GPUs)
- Social media
- Public cloud
- Artificial Intelligence (AI)/Deep Learning (DL)
- Sensors and IoT devices, including bots, drones and self-driving vehicles
- Genomics (e.g., affordable genome sequencing, genomic medicine and gene therapy)
- The sharing economy—Uber, AirBnB, etc.
- Cybercrimes and cyberterrorism
As insurance’s M.O. is to eliminate or minimize risks in return for a fee, these changes are creating new challenges for insurers in all sectors from Property & Casualty (P&C) to Reinsurance. Globalization, interconnected economies, years of low interest rates, increasing process automation, and stringent privacy regulations further complicate the firm’s risk analysis and underwriting tasks. How does an insurer underwrite collision insurance for part-time Uber drivers in cars built with 3D printed parts? How do insurers grow their business when their customers are becoming less brand loyal and now have choices – online and offline?
Opportunities of harnessing data
Insurers hold a wealth of data that has only been partially tapped for insights. Monetizing these data stores can increase operating efficiency and share-of-wallet. Success is highly dependent on the firm’s data strategy and on its choice of storage software and hardware. As Sandip Patel, IBM Global Managing Director, Insurance wrote in a recent blog that “most are challenged with the problem of organizing and managing the underlying data – how to acquire, curate, store, manage and control access.”
Storage choice matters for agility, regulations and AI
Different data have different handling and response requirements. Poor or inconsistent application performance was a key gripe identified in a recent Frost & Sullivan survey of IT leaders. Consumers—internal and external—become dissatisfied with long lead time for decisions that occur if data is not readily or quickly accessible by applications. Insurers must also determine what data they can keep or share without running afoul of the European Union’s General Data Protection Regulation (GDPR) or regional laws like the California Consumer Privacy Act that becomes law in 2020.
Data is increasingly big data and IoT-sourced—from mobile phones to remote sensors—that is pooled on hybrid cloud storage for classification and initial analysis, and then moved to long-term tape archives for record keeping. If real-time responses are required, as most likely in the case of IoT applications, processing is done on edge computing devices with likely flash-based storage.
In a 2018 Frost & Sullivan survey, 65% of IT leaders in financial firms cited concerns about security and unauthorized access to data as very or extremely important. Going digital, unfortunately, increases a firm’s exposure to cybercriminals. From data breaches to electronic fraud, an average financial organization is 65% more likely to be hacked than a non-financial enterprise. With an average incident cost of $206 per capita cost of a data breach and potential penalties imposed by regulators for the data loss, financial firms are rightly reviewing and updating their data policies and technologies.
As encryption, access, and retention needs may vary across geography, Frost & Sullivan noted that firms need a flexible data management approach that leverages multiple storage formats, media and environments, allowing insurers to adapt their data management to meet changing needs.
IBM has a long history of technology innovation and of expertise in the insurance industry. Our reference architectures like the IBM AI Infrastructure Reference Architecture, IBM Cloud Private, and hybrid multi-cloud solutions with storage offer differentiating values for insurers as do our investments in open technology like Apache Spark, Kubernetes, and Docker.
Regulations such as GDPR amplify the need for consistent data policies across a hybrid multi-cloud system, and for storage solutions that can do more than just store data. Our IBM Spectrum Storage software portfolio enables clients to:
- Protect and quickly recover data in physical, virtual, software-defined or multi-cloud environments including IBM Cloud, Amazon Web Services (AWS), and others. RESTful API support ensures seamless data access.
- Automatically search and tag data that includes personally identifiable information.
- Simplify file, block, and object data management across private and public clouds.
Today and moving forward, insurers need to obtain maximum value from their data, and can do so by adopting a modern data infrastructure that is open and designed for hybrid multi-clouds, that is secure, supports AI, and enables their transformation to a more cognitive enterprise. To learn more about how IBM and IBM Storage can help you do more with your data, and IBM Insurance solutions, please join us at Think 2019 in San Francisco.
On Wednesday, February 13 from 8:30-10:00 AM, don’t miss the IBM Financial Services Networking Breakfast at Think where you can hear from Tom Eck, CTO and VP of IBM Cloud and Financial Services, and Sandip Patel, General Managing Director of IBM Insurance, and join banking and insurance industry experts and like-minded peers in discussions of the key imperatives and new technologies driving the industry. Please pre-register as there is limited space available.
The Race to Digital Transformation Fueled by Modern Infrastructure
Wednesday, 3:30 PM – 4:10 PM | Session ID: 6950A
Yerba Buena Center for the Arts | Theater Room
Tom Rosamilia, IBM
Rich Karlgaard, Forbes
Hilary Mason, Cloudera
Roundtable: Winning Strategies for Storage in Multicloud Environments
Wednesday, 8:30 AM – 9:10 AM | Session ID: 6639A
Moscone South, Exhibit Level, Hall C | Cloud & Infrastructure Think Tank J
Michelle D. Tidwell, IBM
Sam Werner, IBM
Jeff Eckard, IBM
Steve Kenniston, IBM
Deepa N. Krishnan, IBM
 Frost & Sullivan State of the Cloud 2018
 Cost of a Data Beak Study: https://www.ibm.com/security/data-breach
–>Browse more Think 2019 insurance blogs and sessions by topic
–>Explore IBM Insurance solutions
–>Watch the Think Concierge videos to learn how to make the most out of Think 2019.