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New horizons: insight: context-based services open up new pathways for carriers.

A big part of an insurance CIO's job is keeping up with new developments that may help their organizations drive growth, rather than just hold down costs. Services that combine real-time signals from the physical world with location data, online activities, social media and other types of contextual inputs, or context-based services, comprise one such trend. Beyond the basic elements of time and place and providing the elements that make up a rich user experience, context-based services offer insurers the possibility of connecting with customers at exactly the right moment, through the right channel, with the right interaction.

Technology now permits rapid aggregation of data from multiple sources and delivers new insights that can give users much more immersive experiences. Today, we have ready access to enough historical and real-time data and we know enough about what is happening in enough places to be able to offer services that are enabling and entertaining. The key is to ensure that context enables those services that make sense, right at the point where an action takes place.

Insurers have long used information in data warehouses to glean insights about customers and translate those insights into competitive advantage. Carriers, for example, use customers' driving and financial history to create highly personalized, differentiated products and cross-selling opportunities that are supported by personalized marketing campaigns.

Imagine, though, this kind of customer Experience: Right at the time of an accident, an insurer supplies a customer with details on medical facilities, rental car options and local auto repair shops. To expedite the claims process, an adjuster nearby is immediately informed about the accident.

Property and casualty insurers can also use location-specific information to respond to catastrophic events. For example, insurers can model outcomes using location-based information, manage triage with emergency and health services, informing local agents and adjusters, or calculating risk based on proximity to flood zones or forest fires.

Understanding customer context also paves the way toward more effective, real-time customer targeting. Social media leads people to communicate often about lifetime events. This can help life insurers target customers with dedicated offers for insurance and to sell to specific needs correlated with certain life events, such as getting married or retiring.

To capitalize on context-based services, insurers will need to develop significant new analytical capabilities. They'll also have to develop customer-centric business and technology architectures. To acquire and manage meaningful data, insurers must be able to process structured and unstructured data--maximizing the value of data in existing systems and hybridizing it with unstructured data from sources such as social media. Expanded use of customer data must be buttressed with knowledge of customer expectations on how their personal information is used.

CIOs who grasp the importance of context-based services will be able to establish themselves and their organizations as strategic players and will offer new levels of insight that differentiate their organizations.

Best's Review columnist Michael Costonis is managing director, Accenture Insurance Practice. He can be reached at
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Title Annotation:Technology
Author:Costonis, Michael
Publication:Best's Review
Geographic Code:1USA
Date:Dec 1, 2012
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