Accenture’s Analytics in Action survey covered 600 companies in a range of industries, including insurance. Analyzing the data and comparing insurance-specific findings with the total sample, leads one to several interesting conclusions:
- Insurers are committing resources and budget to analytics. A third of insurers has the required human and technological resources needed for analytics and is using analytics regularly with some success—significantly above the total average of 20 percent.
- Senior insurance management has bought into analytics, but slightly trailing the total sample (57 percent versus 67 percent).
- However, and this is the kicker, it’s clear that insurers as a group are not using analytics across the entire enterprise, but rather within specific units. In other words, analytics tends to be seen as a tactical rather than a strategic tool. Here it is lagging other industries, and failing to capitalize on the real opportunity of analytics, which is to use the entire company’s resources to service customers, to operate out of the silos that so characterize all financial services companies.
- Most significant of all, I believe, the research demonstrates that almost half of insurers (44 percent) are using analytics retrospectively to understand the past. Only 23 percent are using data insights to predict what will happen, and thus enable themselves to react to customers in real time—something that’s becoming critical—and to make better decisions.
What worries me even more is that most insurers don’t plan to change the way they use analytics over the next year, specifically when it comes to acquiring advanced capabilities.
My overall conclusion? Insurers are not reaping the real benefits from their analytics investments because they are simply not ambitious enough about what it can achieve. Markets are volatile and customers fickle: a more sophisticated approach will help insurers understand more and control the game much better—and thus begin to achieve the payback they sense is just outside their grasp at present.
Next time, I’ll look at some of the barriers that are standing between insurers and analytics payback.
For a more detailed look at this topic, please download Achieving Payback in Insurance Analytics.