Insurers move forward with advanced analytics despite hurdles

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Expanding and improving the use of advanced analytics in several aspects of operations remains a priority in the strategies of P&C insurers in North America.

Virtually every level – but most notably in terms of pricing, underwriting and claims – insurers have reported that their usage and advanced analytics plans have been revived in the past two years, according to Willis Towers Watson. 2021 P&C Insurance Advanced Analysis Survey.

“Apart from a small number of respondents who expressed doubts about the business case for advanced analysis, either because of concerns about costs or the ability to explain results to management or to clients, the North American P&C market still appears to be on the path to increased use of advanced analytics, ”said Lisa Sukow, director, North America P&C practice, insurance consulting and technology, Willis Towers Watson. “The companies surveyed are always optimistic about the impact of advanced analysis on performance in terms of turnover and bottom line. “

Time is the biggest enemy, according to half of those surveyed, but data management, manipulation and warehousing are also key factors mentioned for slowing or delaying progress. While managing the effects of the COVID-19 pandemic has clearly contributed to limiting the time and resources available to work on advanced analysis projects since early 2020, it appears to have had only a marginal impact on these plans.

“The pandemic has certainly increased the time pressures to do other things and delayed some investments in support of advanced analysis; however, it didn’t affect the plans much, ”said Nathalie Bégin, Director, North America P&C Practice, Insurance & Technology Consulting, Willis Towers Watson. “Other reasons for some of the difficulties insurers face in keeping their ambitions on track can be found closer to home. These include the IT infrastructure, the dexterity with which they process data, and the cultural barriers of the business.

Nonetheless, advanced analytics is increasingly emerging as a key source of potential competitive advantage among insurers. While most businesses face prioritization issues or resource constraints, strong pockets of progress have occurred in the two years since Willis Towers Watson’s last survey.

As companies recognize the potential to increase the use of advanced analytics in pricing / pricing, bigger leaps are expected in the underwriting process, including levels of automation and support. to the decision employed. Additionally, the uses of advanced analytics in claims have accelerated at a faster rate, in part because there are more gaps to be filled.

More than half of those surveyed describe themselves as having an active working relationship with the InsurTech community, and 10% are fully marketed.

The survey shows that the use of telematics data has remained the same or has decreased slightly since 2019. This may be due to the fact that companies that started early and strongly in the use and proposals of telematics have removed part of the brilliance and attractiveness of potential opportunities in certain markets. for businesses that haven’t. Likewise, companies may find that there are less complex advanced analytics goals and benefits to be pursued.

“There are steps insurers can take to restore or build momentum behind targeted advanced analytics applications,” said Sukow. “Insurers can reduce costs and increase time available by investing in data analysis expertise, leveraging InsurTech, and having flexible IT capacity. More analytics means more data, which exacerbates issues of IT bottlenecks and / or connectivity between systems. The survey shows that more companies are taking advantage of the cloud and upgrading analytics tools, but these have largely scratched the surface of what can be achieved with on-demand capabilities and API-enabled software.

Sukow also noted that insurers can maximize their internal data harvest. “Many companies still have huge amounts of valuable but untapped internal data. With the right technology, the data available from sources such as images, unstructured complaints, underwriting and customer information, and text mining increasingly has the power to transform product propositions. and profitability.

About the survey

Willis Towers Watson’s 2021 P&C Advanced Analytics Survey asked U.S. and Canadian P&C insurers for their views on the future of advanced analytics. Two separate web surveys – one targeting technical roles, the other senior management – were conducted during the first half of the year. A total of 90 representatives (56 technicians and 34 executives) from 71 non-life insurers took part, including 62 multi-line carriers, three commercial line carriers and six exclusively personal line carriers. Respondents include six of the top ten P&C insurers in the United States and five of the top ten in Canada.

About Willis Towers Watson

Willis Towers Watson (NASDAQ: WLTW) is a leading global consulting, brokerage and solutions firm helping clients around the world turn risk into growth. With roots dating back to 1828, Willis Towers Watson has 45,000 employees serving more than 140 countries and markets. We design and deliver solutions that manage risk, maximize rewards, cultivate talent, and increase the power of capital to protect and strengthen institutions and individuals. Our unique perspective allows us to see the critical intersections between talents, assets and ideas – the dynamic formula that drives business performance. Together, we unleash the potential. Learn more about willistowerswatson.com.


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