Slideshow Top 10 Areas of Data Investment for Life/Annuity Insurers in 2013

Published
  • June 17 2013, 11:48am EDT

The average life/annuity insurer is spending about 11 percent of its IT budget on data and analytics in 2013, which is up from the 8.5 percent life/annuity insurers were budgeting for data and analytics in 2012. Also, 87 percent of life/annuity insurers are planning increases in data and analytics spending through 2015 — none are planning on decreasing spending, as the remaining 13 percent expect spending to remain flat. The following represents how many life/annuity insurers, out of the 47 surveyed for SMA's research, are investing in data and analytics for specific business operations. Also included is the breakdown of how many large insurers are making the investments versus smaller ones, as well as how many insurers were making the same investments last year.

1. New Business/ Underwriting – 75%

Life/annuity insurers more than $1 billion: 83% Life/annuity insurers less than $1 billion: 64% Total investment in 2012: 60%

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2. Product Development – 66%

Life/annuity insurers more than $1 billion: 72% Life/annuity insurers less than $1 billion: 57% Total investment in 2012: 66%

3. Marketing – 56%

Life/annuity insurers more than $1 billion: 50% Life/annuity insurers less than $1 billion: 64% Total investment in 2012: 48%

4. Distribution Management/Sales – 50%

Life/annuity insurers more than $1 billion: 56% Life/annuity insurers less than $1 billion: 43% Total investment in 2012: 50%

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5. Claims/Payout – 50%

Life/annuity insurers more than $1 billion: 56% Life/annuity insurers less than $1 billion: 43% Total investment in 2012: 52%

6. Policy Servicing – 28%

Life/annuity insurers more than $1 billion: 17% Life/annuity insurers less than $1 billion: 43% Total investment in 2012: 26%

7. Enterprise Services – 22%

Life/annuity insurers more than $1 billion: 17% Life/annuity insurers less than $1 billion: 29% Total investment in 2012: 14%

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8. Billing – 16%

Life/annuity insurers more than $1 billion: 6% Life/annuity insurers less than $1 billion: 29% Total investment in 2012: 7%

9. Asset/Investment management – 15%

Life/annuity insurers more than $1 billion: 11% Life/annuity insurers less than $1 billion: 4% Total investment in 2012: 10%

10. Reinsurance – 0%

Life/annuity insurers more than $1 billion: 0% Life/annuity insurers less than $1 billion: 0% Total investment in 2012: 7%

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Top 5 challenges to capitalizing on analytics:

1. Data quality and completeness 2. Lack of an overall strategy for data 3. Legacy core systems 4. Lack of overall priority or funding 5. Data accessibility