Insurance analytics technology enables insurers to gain insights from their data, which could identify short-term opportunities while also positioning them in the long term for additional opportunities from intelligent digital innovations. Accenture Research shows that North American insurers could reap a 10 to 20 percent improvement in profitability by investing in the broader suite of intelligent solutions, among which is analytics.
The data-driven digital insurer
We’re just beginning to see new digital opportunities play out in the life insurance and annuity (L&A) industry with its rich reserves of enterprise and third-party data. High-performing digital insurers increasingly rely on data for insights that provide added value for customers while also uncovering potential new revenue streams and operational efficiencies. They also acquire data from more sources than before, including a growing number of third-party sources in addition to partners, customers, devices and enterprise information systems. In fact, over half of U.S. tier 1 and tier 2 executives we surveyed have more than 10 administration systems from which to aggregate data. Clearly, insurers have an abundance of data.
However, several insurance executives told us that while most insurers own an enterprise analytics application, they lack data science capacity and/or an L&A-specific analytics capability to derive relevant insights from the data that could improve their business performance. They also found it challenging to aggregate data from different sources into a standardized and efficient data model. According to our survey, L&A executives ranked improved profitability and gaining insight into customer behavior to improve the customer experience as two of the top opportunities they were looking for from their data.
That’s when a light bulb went on. We coupled Accenture’s extensive data science expertise with its L&A experience to build a data analytics solution for life and annuity carriers. The framework is designed around four key L&A domains:
- New business and underwriting
- Operational performance
- Agent and consumer behavior
- Product and marketing
We included a data model to transform data aggregated from numerous sources, along with predictive and forecasting models. This combination of analytics solution and data model addresses insurers’ short-term needs to efficiently aggregate data, visualize it relevant to their business imperatives and draw actionable insights from it. We believe insurers can obtain even more value from their data in the long term.
Insurance analytics provides short-term gains and supports long-term strategy
Data is a competitive differentiator, with artificial intelligence poised to gain momentum in the L&A industry over the next several years. High-performance digital insurers, with a long-term data strategy and the technology to enable it, can uncover new opportunities for future growth and innovation, while also continuously improving daily operational efficiencies.
Underwriting is one such area where insurers can apply analytics to draw insights that produce significant efficiencies. Automation, machine learning and seamless ecosystem connectivity can generate significant process efficiencies by enabling machines to talk to each other to automatically gather evidentiary data, process it in real time, and either issue a policy decision or connect with an underwriter for further review. Insurance analytics underlies the process and pinpoints issues, such as delays, and recommends remedies. These valuable insights can assist insurers when negotiating service levels with third-party providers or evaluating capacity.
This example illustrates how the insurance industry – squarely in the “vulnerability” quadrant of Accenture’s Disruptability Index – is pivoting to what we at Accenture call “the new,” and applying technology to build enhanced services that alleviate customer pain points. As our industry seeks to balance profit and loss pressures with strategic decision making, data and analytics offer greater clarity to adapt your business in response to what the insights tell you today. They also provide predictive insights that enable you to reimagine your business in the future.
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Additional reading:Reimagining Insurance Processes with Intelligent Solutions