Advertisement

http://insurancethoughtleadership.com/wp-content/uploads/2014/04/bg-h1.png

facebooktwittergoogle_plusredditpinterestlinkedinmail Print

July 21, 2016

Data and Analytics in P&C Insurance

Summary:

The way insurers manage data and leverage analytics capabilities is improving slowly, but steady progress is being made.

Photo Courtesy of

Often, it seems like the insurance industry moves slowly when it comes to technology improvements. The way insurers manage data and leverage analytics capabilities is no exception. But steady progress is being made. SMA’s recently released research report, Data and Analytics in P&C Insurance, highlights the progress as one of the key themes. The progress is observable in three areas: organizational changes to increase the focus on data/analytics, enhanced technology capabilities and the breadth of usage across the enterprise.

On the organizational front, more insurers are treating data, business intelligence and analytics as a functional area of the business, akin to finance or human resources. One-third of P&C insurers now have centralized units at the enterprise level outside of the IT function. These units are increasingly being staffed with a blend of business and technology professionals who are focused on the disciplines of data and analytics. Chief analytics officers, chief data officers, data scientists and others are becoming more common, as quantified in our research report.

See also: Data Science: Methods Matter (Part 4)

Technology capabilities also continue to advance — with significant investments continuing to be made in traditional business intelligence — while more companies invest in advanced analytics and big data. Big data is a game-changer for a number of business areas, with significant percentages of insurers now citing applications such as pricing, customer segmentation, actuarial analysis, fraud, etc. as big opportunities.

BI and analytics usage is now penetrating every area of the business. Pilots and projects from the 2014 time frame are now in production — with areas such as customer segmentation, underwriting profitability and new business analysis now implemented. The next wave of business projects are in progress in areas like customer lifetime value, underwriting operations and CRM.

See also: Analytics and Survival in the Data Age  

The trends, projects and investments featured in this research report are important for insurers to consider because data and analytics are increasingly becoming a primary source of competitive advantage. Data has long been considered a strategic asset by insurers, but now the scope of the data is expanding, the technologies and tools are becoming more sophisticated and the expertise of individuals is advancing.

description_here

About the Author

Mark Breading is a partner at Strategy Meets Action, which helps insurers develop and validate their IT strategies and plans, better understand how their investments measure up in today’s highly competitive environment and gain clarity on solution options and vendor selection.

+ READ MORE about this author ...

To subscribe to articles by other authors or in other topic areas, or to manage your existing subscriptions, click here.
Like this Post? Share it!

Add a Comment or Ask a Question

blog comments powered by Disqus