This is really the nub of it all, isn’t it—the reason we think about analytics and go to the trouble of researching how it is being used? The good news is that insurance companies have generally made a good start: what they need more than anything else is to elevate themselves to the next level.
Two general points are worth making. One is that insurers already have most of the data they need. It is probably not all located in the same place, but analytics tools are getting better and better at finding it.
Second, insurers need to recognize that the main thing that is holding them back is their own lack of innovation, coupled with their delay in creating an enterprise operating model that bridges functional silos. Analytics success will come when they start to look at the company as a whole, and develop ambitious programs that aim for a mixture of immediate and longer-term gains.
Insurers will also need a willingness to look beyond the industry to find new ideas. After all, the expectations of their customers are being set outside of insurance.
We identified seven specific success factors for insurers:
- Transform the operational model.
- Integrate analytics into the business processes.
- Build a solid business case.
- Implement an aggressive R&D/ innovation agenda.
- Face up to the technology challenge.
- Leverage big data.
- Initiate pilot projects to test concepts.
These success factors are discussed in more detail in my full-length analysis of the research.
I’d like to leave you with one thought. As an industry, insurance has a way to go in achieving the analytics payback it wants. But this is an opportunity for visionary insurers, those who see the crucial role that analytics can play in improving their businesses, and in building a foundation for growth. Now all that remains is to seize it.