Big data, and its value to the business, are on everybody’s lips these days, and insurance is no exception. But is it more than just lip service? As recent research has shown, despite its investment in analytics, the insurance industry as a whole is battling to find the big gold nuggets in all the data it collects. In this series of blogs, I’d like to spend some time exploring why that should be the case and, more importantly, how to hit paydirt.
But first, a word of introduction is in order as this is my first blog on these pages. I think it’s safe to say that finding ways to use data intelligently, and so gain competitive advantage, are passions of mine. So you could say that I have my dream job, which is leading Accenture’s Insurance Analytics practice for North America. I’ve been working and consulting in the global insurance industry and around technology and analytics enablement for nearly 24 years, so the current focus on the value of data to insight just confirms something I’ve always known—and tried to help insurers benefit from.
Getting the insight is the easy part, it’s turning it into action where things often come unstuck.
My starting point is the observation that carriers face a number of current challenges that analytics can help them overcome. The generic challenge that they share with all sectors is the rise of the new, connected, always-on consumer. To turn these consumers into customers, companies now need to be able to offer them a personalized, highly tailored experience that’s consistent across multiple channels—in person, online, mobile, to name just three.
Specific challenges for insurance include:
- The threat of new non-players entering the industry: companies with no legacy systems or processes and an acute understanding of how to service today’s consumers.
- Marketing spend that has doubled over the past two decades, but an inability to understand properly the returns being achieved.
- Persistent slowness in introducing the new products and pricing models needed to provide the tailored service consumers demand.
- Continuing losses due to claims fraud. Some research suggests 10 percent of all claims are fraudulent, and the percentage is rising.
It’s obvious that analytics, in theory at least, could play an important role in helping overcome each of these challenges. In my next blog, I’ll share some research insights that indicate why insurers aren’t necessarily getting the benefits from analytics they expected.
For a more detailed look at this topic, please download Achieving payback in insurance analytics.