The insurance industry must use structured data and automation to address the issues derived from increasing incidents like extreme weather, economic or geopolitical events and cybercrime, M-Files highlights.
In recent times, the world has witnessed a host of occurrences that have rocked global markets, such as wildfires raging across Europe, two international conflicts with worldwide ramifications, rampant inflation and 32% of UK businesses reporting attempted cyber-attacks.
The insurance industry acts as a financial safety net for individuals, companies or institutions impacted by events like these.
However, as the regularity of these incidents increases, the more difficult it becomes for insurers to manage risk and forecast, process and assess claims, M-Files notes.
As the burden of work grows for insurance firms in line with market shocks, “the sector’s incumbents must ensure their data is structured and automated wherever possible to increase their capacity to deal with unexpected events,” according to Yohan Lobo, Industry Solutions Manager, Financial Services at M-Files.
Lobo said: “The volume and impact of risks both businesses and individuals are experiencing globally show no signs of abating. The volatility of the current economic environment is impacting day-to-day operations, as well as wider strategic challenges in the insurance industry.
“Dynamic interest rates and high inflation mean that the work of underwriters and loss adjusters is more complex because of more frequent asset valuations and increasing claims costs. In addition, recent low interest rates and market turbulence have led to inconsistent investment returns.
He continued: “To adapt to a heightened threat landscape, insurers must consider how their information is organised, and whether this allows them to quickly react to market changes.
“Adopting AI solutions is the simplest way to automate processes and increase both efficiency and adaptability, and firms that already manage their data in a structured way are best placed to implement this technology.”
Lobo stated that there are a range of insurance forms that can leverage artificial intelligence (AI) for tasks spanning from document creation to workflow automation to intuitive search functions.
“Prioritising the integration of this next wave of technical solutions will increase spare capacity within firms, while allowing them to react instantly and automatically to fluctuating market conditions,” the executive notes.
“Legacy insurance firms, in particular, are always looking at how they can improve their financial and operational performance, now and in the future. Technological adoption and development will support these goals by increasing productivity in the short term and improving risk management in the future.
“Ultimately, insurance firms must be willing to invest in technology, but also to invest in themselves, getting rid of outdated systems or software and spending time organising the data and processes they manage.”
Lobo concluded: “It’s important that insurance companies grasp that the world is changing, and to accommodate this, the industry as a whole must evolve too. This transformation will be delivered through technological growth, and firms that prepare themselves to widen their tech stacks and achieve automation by properly structuring the data at their disposal are more likely to build competitive advantage over rivals.”
