More than a quarter of insurers have decided that big data “doesn’t apply” to them in 2015, according to the “Hot Topics for Insurers: Social, Mobile, Analytics, Big Data, Cloud, and Digital,” survey from Novarica. Further, 41 percent said they are still trying to understand the value of big data.
“Hot topics” likely are more discussed than they are understood, Novarica said. However, the listed ones rapidly are becoming table stakes for insurers, and could disrupt carriers’ operating models. That means establishing a business case may be less important going forward. Fewer than 20 percent of respondents to the survey said they had calculated hard returns on investment in any of the “Hot Topic” areas, but many more said they had an intrinsic understanding of the value of those investments.
“Insurer business executives who demand precise benefits calculations before making initial investments are likely to miss opportunities to discover new benefits,” Novarica said in the report, which offers detailed statistics about the sophistication and status of current deployments, pilots and plans.
According to the survey of 11 large and 13 mid-size life/annuity insurers, and 20 large and 46 midsize P&C insurers, big data deployment rates at insurance companies have doubled since last year, but remain at less than 20 percent.
Mobile applications are now beginning to take hold, and the segment demonstrating the most development is policy holder apps. The use of analytics in modeling has increased by a third, according to the report. Mobile deployments remain low, but a third of insurers now have mobile capabilities and describe them as deployed in some areas. One-tenth said mobile is “well understood and widely deployed.” The need to support distributors and policy holders now is a growing topic of awareness and overall deployment rates has increased over the past year, Novarica said.
Large insurers are more active with analytics than smaller insurers, Novarica said. Reporting is well understood and widely deployed at a third of insurers and an additional 9 percent said it is integrated with everything they do. Modeling and planning is well understood and widely deployed at 12 percent, with an additional 48 percent saying it is deployed in some areas. Real time scoring is deployed in some area by 44 percent of those surveyed; just 6 percent said it is well understood and widely deployed.
Social media analysis is still an emerging area, as insurers endeavor to unlock the value of information that customers offer voluntarily. Personal lines insurers are leading others in terms of social media analytics.
Cloud is deployed for ancillary applications, such as financials, HR and CRM, at more than two-thirds of insurers, but fewer than 20 percent use cloud deployments for core systems. “For core insurance applications, the numbers are smaller, but growing,” Novarica said. “Most of this activity is in new and ancillary lines, but some midsize insurers are embracing cloud-based systems as part of overall legacy replacement.”
