How NIXN is reshaping Insurance
The insurance industry has a history of providing financial relief to companies and individuals through disaster, illness, injury, and loss. However with growing access to data and technology, insurance has the potential to become much more.
The industry is approaching an inflection point, on one hand, companies continue to offer broader service offerings consuming more risk that daily, become more complex. On the other hand, the availability of data processing and technology should give greater insights and opportunities to influence behaviors and risk. This ability via NIXN allows the insurance industry to offer actionable advice and develop risk prevention services that open new markets, we call this “Risk Streaming”. Our world as we know it continues to change, the end user expects a tailored experience, with on demand service, and 24/7 connection, NIXN allows the insurer to offer this.
The Case for NIXN
Insurers need to build sustainable business cases in order to offer value to customers. The reality is NIXN’s business case is complex. Unfortunately, it’s not one of those endeavors that you can launch and have a return that is immediate.
NIXN is an investment. To make a decision to commit to telematics is committing to a new way of doing the entire insurance ecosystem.
The value is exponential based on the levels of maturity the stakeholder wishes to achieve with their program. The business case almost has to be looked at as an evolving artifact, with measured steps and managed expectations along the way. Depending on the program strategy that is adopted, a carrier may have to base the business case on incremental KPIs as its program matures. The first phase, for example, could focus on customer enrollment, risk mitigation and behavioral trends. Later in the program, KPIs could be introduced around retention and loss frequency. Further still, KPIs around underwriting profitability and segmentation may become more apparent.
Early on, a stakeholder may see value from a loss control and safety angle. Insurers around the world are investing in two approaches:
1. Real-time risk mitigation, where the detection of a risky situation triggers a reaction to prevent an accident.
2. Behavioral change enhancing the activity of the loss control team but also rewarding employees’ safe behaviors.
Moreover, as the program matures, the NIXN begins to provide value for pricing sophistication, risk selection and underwriting. To complete the value chain, NIXN can then have positive impacts on claims in terms of services, efficiency of the process and effectiveness of the decisions (including minimization of fraud and inflated claims). All these elements of the value creation equation need to be managed in order to deliver an adequate value for all the relevant stakeholders.