Novarica Study Highlights Analytics and Big Data Capabilities at U.S. Insurers
Staff Writer | June 24, 2015
All across the insurance industry, business intelligence and analytics are top priorities, and the importance has only increased over the last few years, according to a new report prepared by Novarica: “Analytics and Big Data at Insurers 2015.”
The report looks at the current state and plans for analytics and big data capabilities at U.S. insurers, as well as the benefits that have been realized by these efforts to date. It is based on results of a survey of 58 insurer CIO members of the Novarica Insurance Technology Research Council, conducted in April 2015.
Some of the key findings from this report include:
- The insurers that will be best positioned to profit from the potential value of analytics and big data will be those that have created a culture where business leaders trust analytics and act on the insights provided. All insurers should take steps to create that culture today if it does not already exist in their companies.
- Predictive models are used by a majority of insurers in some element of the value chain, with the most commonly used models focused in the areas of risk and profitability. For life/annuity insurers, common models include financial projections and both product and customer profitability, while P&C insurers also commonly use underwriter risk score in addition.
- Only about half of insurers are actively deriving value from analytics in key areas such as product development and producer management. While the realized business value in areas like actuarial and pricing is widespread, many insurers still have not been able to apply analytics to effectively improve performance in other areas.
“The availability of new, high-volume, unstructured and structured data, and the advanced technology to store, integrate, analyze, and gain insight from it presents an opportunity for early adopters to gain a competitive advantage,” explains co-author Jeff Goldberg, vice president of research and consulting. “While big data has yet to be a big priority in most insurance organizations, deployments have more than doubled over the past year. Our research has shown most carriers are still maturing and expanding their use of traditional data analytics and predictive models to improve processes, reduce losses and generally improve their book of business.”
“Over the next few years the insurers that will be best positioned to profit from the value of analytics and big data will be those who have created a culture where business leaders trust analytics and act on the insights provided,” says co-author Matthew Josefowicz, president and CEO. “All insurers should take steps to create that culture today if it does not already exist in their companies.”
For a free preview of this report, visit: http://novarica.com/analytics-and-big-data-at-insurers-june2015/
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