As insurers implement data analytics to varying degrees, the next stage is already being set. For many it’s doing even more with external data, building even sharper and better pricing models, or looking for the opportunities to implement predictive modelling techniques within claims.

Are you missing opportunities to use data analytics more broadly across all functions? Can you see ways in which data analytics could have an impact on the key performance indicators towards customer experience, operational processes and business models?

For insurers who sat out or postponed the exercise due to resource constraints or their perception of inadequate data, the questions are very different. Have you explored ways to benefit from the data you already have? The most recent Business Intelligence Survey from bi-survey.com indicates that even the best-in-class companies use only 50% of the available data for decision making and that percentage for laggards is lower than 30.

The reality is that many insurers have only scratched the surface of data analytics in a real sense. W. Edward Deming said, “If you do not know how to ask the right question, you discover nothing.” Insurers need to ask many such questions to reach the next level of benefit.

Applying data analytics in a broader sense can open up new paths to greater profitability. There are many possibilities to apply data analytics, including claims triage, customer prospecting, identifying potential fraud and subrogation opportunity, targeting accounts for premium audits or property appraisals, or even improving the submission handling process. The successful carriers combine business leadership and analytics capabilities to achieve performance that is greater than either dimension can deliver on its own.

On accountability, company management is starting to ask for quantifiable proof that investment in data analytics was a good one. It is a known fact that measuring ROI on data and analytics effort is very difficult. A careful choice of business and operational performance proxies is the answer to this dilemma. If there is no real improvement towards the measures/proxies that matter, it may be because data analytics is not being applied to its full potential. That should warrant a re-examination of the data analytics effort.

In the end, insurers are looking for insights into the customer experience and other best practices. Small to medium-sized insurers in the P&C sector may think they lack the data and other resources to reap the benefits of data analytics. But in fact, they may need help to refine their understanding, intuition and overall effectiveness. For example, an insurer can team up with third parties, particularly their reinsurer, to draw from the collective wisdom of the industry. When insights are consciously gathered and applied to a company’s portfolio, good things are more likely to happen.

We are spearheading such a platform that enables market facts, trends and concerns to be shared with clients without ever compromising anyone’s confidentiality. The interest has been strong, in large part because of the benefits that are possible - and we hope that the benefits will be quantifiable and evident in better business results.