April 2021 – Insurers continue to leverage third-party data for analytics augmentation and predictive modeling as well as for validating and cleansing existing data. The marketplace of third-party data providers is complex, with cross-industry providers, specialists, and startups all vying to help insurers.
This report reviews multiple insurance industry use cases for third-party data and examples of insurers that are investing in this area. It also profiles more than 75 data providers that serve insurers.
Key Points and Findings
- Drivers of third-party data usage include AI, customer experience, cost, and regulation. The need for large data sets to train AI and customer buying experience expectations that online retailers set both stand out as relatively new motivators.
- Privacy concerns have made data use transparency critical. Growing state regulations such as New York State’s Cybersecurity Regulation and the California Consumer Privacy Act have increased demand for transparency in how organizations use data and for what purposes.
- Third-party data providers are consolidating, due to vendors’ desire to maximize wallet share. Data vendors are not always integrated into their acquirers, which can mean challenges for insurers consolidating their data purchases for a more efficient procurement experience.