The Accenture 2015 Global Risk Management Study found that most insurers use data and analytics within the risk function for more traditional financial risks, such as market and liquidity. But that’s just the tip of the iceberg for how data and analytics can be used—within the insurance enterprise in general, and within the risk function specifically. So why aren’t insurers using data and analytics more extensively?
Nearly half of insurers are impeded by data
When we asked North American insurers about the barriers to more extensive use of data and analytics within the risk function, a few general challenges emerged:
- The top challenge was the increased velocity, variety and volume of data (46 percent of North Americans, compared with 35 percent elsewhere).
- Talent and resources came up twice: “insufficient talent in the risk function” speaks to a lack of strategic or analytical skills that are required to synthesize and make sense of data and analytics, while “talent and skills shortages” has been plaguing the industry for several years now.
- Organizational silos continue to impede insurers, illustrated by “lack of connectivity across existing technology infrastructure” and “lack of integration with other business functions.”
- 10 percent of North American insurers say that data and analytics are fully integrated into the risk function’s day-to-day operations.
- 10 percent say that risk analytics are applied consistently across the organization.
- 4 percent say that risk analytics are integrated with strategic planning and decision making.
Given the emergence of the Internet of Things and other digital developments, insurers must get a better handle on data and analytics, from both existing and emerging sources. As digitally savvy, new competitors enter the insurance marketplace, highly sophisticated data and analytics capabilities will prove to be a powerful competitive differentiator.
- Read Insurance risk and reward, part 1: The role of the CRO | Insurance Chart of the Week.
- Read Insurance risk and reward, part 2: Customer-centricity | Insurance Chart of the Week.
- Read Insurance risk and reward, part 3: The CRO & CFO | Insurance Chart of the Week.
- Register to download Accenture 2015 Global Risk Management Study: North American Insurance Report (pdf).
- Download the infographic: Risk management in the North American insurance sector (pdf).
- View other Insurance Chart of the Week
- Email me to discuss how Accenture can help insurers leverage data and analytics to achieve a competitive advantage.