Data Lakes: An option or need of the hour for Legacy Insurers

The Disruption - The Insurance industry is getting disrupted faster than ever before. While the Insure-tech startups, which have their core offerings powered by Advanced Analytics, AI-ML and new gen Digital technologies, are being able to provide very high level of customizations to the customers and a completely new experience throughout their customers’ usage journey of insurance products. The existing players who are using Legacy systems as their core infrastructure are restricted to offer tailor made insurance products. With the increased acceptance of these new gen tailor made products, the existing players are very much vulnerable to losing their market dominance.

The Problem – The legacy systems provide limited capabilities to derive Business Insights from the existing data, to support faster speed to market for the new products, to provide high level of customized products based on individual’s need. The restriction comes from:

- Data lying in multiple systems ex. Sales data, Claims data and policy administration data sometimes located in different systems making it difficult to run predictive analytics or to get a single view of data

- Limited capabilities of Legacy systems to couple with modern Analytics, AI-ML and Digital Technologies.

- Inability of legacy systems to handle large amount of data getting generated from multiple data sources like social media, Tele calling, IOT devices.

- Inability of Insurers to outright decommission the legacy system completely due to long term nature of liabilities and regulatory requirements.

- Lower level of personalised products due to inflexible legacy systems and high time to market.

Although the Legacy systems restrict the data usage but the same dataset is an invaluable strategic asset for the legacy insurers. At present this strategic asset lies unutilized with many Insurers.

If the insurers could apply various modern data techniques to the large amount of data lying in the system, the same data can be used for better customer segmentation, further understanding buying behavior, enabling effective product placement, satisfying customers’ need before they ask for it and generating various other actionable insights for decision making.

The Solution – Data Lake is a cloud based data repository solution to store structured and unstructured data empowered with Big Data Analytics and coupled with Secure and Scalable architecture. Data lake can provide your organization with:

- Secure and flexible data governance framework

- Scalable architecture to empower your organization to respond quickly to the emerging business challenges

- Capability to handle data from multiple resources – websites, tele calling, IOTs etc.

- Remove data silos of legacy systems by providing a consolidated view of all the data at same time

- Better Business insights from the single view of data to enable better speed to market, deeper customer insights, Personalized product offerings and hence a flexible business model for insurers.

High Level AWS based Data Lake Architecture