Often it seems like the insurance industry moves slowly when it comes to technology improvements. The way that 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 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.
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 seen to be 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, and other areas 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.
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.
This blog entry has been reprinted with permission from SMA.
Readers are encouraged to respond using the “Add Your Comments” box below.
The opinions posted in this blog do not necessarily reflect those of Insurance Networking News or SourceMedia.
Register or login for access to this item and much more
All Digital Insurance content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access