Insurers Have a Lot of Data, But Too Many Silos
Insurance Experts' Forum, July 17, 2014
Accenture's Michael Costonis recently revealed the results of an industry survey that finds insurers are still getting their feet wet with analytics. Costonis points out that, for the most part, big data analytics is still a tactical play for insurers, versus a strategic initiative. Accenture's survey finds only about 17 percent of insurers said they routinely use analytics as part of an integrated, enterprisewide approach.
In its industrywide survey on the topic, Accenture finds that insurers actually have an edge over other industries when it comes to big data, but aren't taking advantage of it. While 36 percent of insurers (compared with 20 percent of the total sample) have the resources and ability to use analytics, they apply them in tactical — rather than strategic — applications.
By strategic, we mean able to serve the entire enterprise, versus a single department or business line.
“There is huge potential in data analytics in insurers to better understand customers,” says Costonis. “This includes the ability to make smart marketing decisions, to introduce refined products and pricing,and finally to decrease losses.”
The issue may be too many stovepipes across the industry. I've spoken with many insurance CIOs, for example, who had five or more policy administration systems under their domain, the result of acquisitions and new product line launches. These separate systems continue to function for their narrow product lines. This also reflects the challenges in getting to a single enterprise view of these applications and data sets, to facilitate analytics.
The evidence of the pervasiveness of these silos is seen in another set of data revealed by Costonis. In total, 20 percent of insurance executives in the Accenture survey said they “don’t know” how their organization was using data and analytics. Across all industries, the number who didn’t know averaged 14 percent. “In a data-dependent business like insurance, having one on five employees not knowing what's happening in analytics is an eye-opener.”
Joe McKendrick is an author, consultant, blogger and frequent INN contributor specializing in information technology.
Readers are encouraged to respond to Joe using the “Add Your Comments” box below. He can also be reached at email@example.com.
This blog was exclusively written for Insurance Networking News. It may not be reposted or reused without permission from Insurance Networking News.
The opinions of bloggers on www.insurancenetworking.com do not necessarily reflect those of Insurance Networking News.
Add Your Comments...
If you have already registered to Insurance Networking News, please use the form below to login. When completed you will immeditely be directed to post a comment.
You must be registered to post a comment. Click here to register.