A new study by research firm Celent, commissioned by Equisoft has found that 91 per cent of carrier executives surveyed says their firms are prioritizing the use of data and analytics to inform their decisions about pricing. It also found that data is currently creating the most value for organizations when building actuarial pricing models.
These and other findings were gleaned from a survey of chief information officers and other executives at large and mid-sized North American carriers offering individual life, annuities and group insurance products.
“Higher customer expectations for modern digital experiences are segmenting the marketplace between savvy companies and lagging companies, creating a strategic imperative for insurers to become more data-driven and to generate more value from their data through digitalization, connectivity, analytics and automation,” say Celent’s researchers in a statement announcing the release of the findings.
The report, Getting Value from Data, The Insurer’s Perspective, found that, in addition to pricing, 73 per cent of insurers say customer experience, service and insight were top priority areas, followed by marketing uses, a priority for 64 per cent of those surveyed. Interestingly, just 55 per cent said cyber security, sales, fraud and underwriting were priority areas for using data.
“The promise of gaining a significant competitive advantage by leveraging generations worth of data to fuel AI (artificial intelligence) and underwriting engines is irresistible for insurers,” says Equisoft senior director of core insurance solutions, Brian Carey. “For many, the required data migrations and integration complexities represent both a risk and a challenge.” They add that cultural roadblocks are also a very real hurdle for many organizations to overcome.
The survey examines where respondents use data today, where they believe data is creating value, challenges, and how data is managed and organized.
“Companies have more data than ever. It comes from extensive digital transformations, integrations, and interfaces with various data sources, analytics, point solutions and innovations,” the report states. “Turning these new assets into more valuable assets is key to sustainable competitiveness.”