Based on the research, I see three major barriers to the ability of insurers to get the most from their analytics investments.
- Resources. As already noted in a previous blog, a third of insurance respondents have enough human and technological resources. A good start, perhaps, but only that. More concerning: more than a half are being held back by the human and technological resources they have (or don’t have).
- Culture and organization. While most insurers have appointed a specific person to be responsible for data management, C-level support is not as strong as is needed (57 percent versus 67 percent in the total cross-industry sample). Even more to the point, it appears as though insurance management’s support is largely confined to the creation of an integrated data strategy mainly aimed at identifying growth opportunities and monitoring performance.
- Talent mismatch. There is a critical mismatch between the supply and demand of the specialized talent needed to mine analytics gold. Companies are already engaged in a global war for talent, but the battle is that much more fierce in analytics, and even more so in insurance analytics. Insurance workforces are aging, and today’s students and graduates are not seeing the industry as a career option. In particular, tomorrow’s analytics workforce is likely to be located in developing countries like India and China—and will likely lack insurance-specific knowledge and skills. For more on this topic, please read The looming global analytics talent mismatch in insurance.
The first and last of these are essentially related and concern resourcing of various types. While serious, there is always a relatively simple solution waiting to be found when it comes to this type of real-world problem. Much more worrying, I believe, is the conceptual challenge posed by the second challenge. It could be the hardest to overcome because it requires a change in mindset, which we all know is the most difficult thing of all to change!
In conclusion, next time I’d like to home in on the breakthrough factors for gaining a return on analytics investment.
For a more detailed look at this topic, please download Achieving Payback in Insurance Analytics.