Big data and analytics are taking the P&C insurance sector by storm. A recent report by Strategy Meets Action identifies the technologies and applications that are most widely deployed and the types of business problems to which they are being applied.
The study, based on a survey of 72 North American P&C insurers, defines three categories of analytics: Business intelligence, or BI, used to gain insights from historical data; advanced analytics, which addresses future likelihoods and forward-looking opportunities; and the relatively new field of emerging or prescriptive analytics, which mimics human intelligence to make specific recommendations.
Today, the study finds, analytics predominantly is used to evaluate risk, especially for actuarial and underwriting purposes. But the SMA research indicates that many new projects related to market segmentation, customer lifetime value and obtaining a single view of the customer are being undertaken and likely will play a critical role in efforts to improve the customer experience.
The charts below depict the percentage of P&C insurers investing in specific BI and other analytics tools; which customer-facing, marketing and distribution applications are receiving the most attention from insurers; and which big data initiatives are considered game-changers over the next three years.
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