The insurance industry is often criticized for being slow on the uptake of new technologies.
Now, fresh data has revealed that just 11% of insurance executives and brokers strongly believe they are utilizing the benefits of data and analytics – that’s according to a survey of the industry by technology consultancy West Monroe.
But while more than three-quarters of respondents said they were not investing in disruptive data sources, 50% said they were considering an investment in secondary sources to utilise their own data.
The usage of data within the industry is growing, but not yet holistic in nature, Carrie Camino, director of West Monroe’s insurance practice, told Insurance Business.
“I think that there are some carriers and some leaders in the broking front that are starting to use analytics, but we don’t see it as widespread as we would expect to see going forward,” Camino said.
Among carriers, data is mostly being used to improve actuarial models and pricing models – and in some cases even starting to influence product and design, Camino explained, and analytics are being applied to help reduce claim rates.
Those carriers who are using analytics, particularly those who are using it to refine their distribution channels and improve targeting, are “really starting to see that benefit in terms of their ability to grow market share,” Camino stressed.
When it comes to the somewhat slow uptake on technology, is the conservative nature of the insurance industry really to blame?
“The challenge is much more multifaceted,” Camino said, adding that the sheer volume of data can leave many unsure on where to begin.
The advice is to start small, with a particular hypothesis in mind, and to keep building on the learnings through trial and error. Strategy above all, Camino recommends – “don’t get hampered by the technology.”
“Do a little bit of a rinse and repeat… you want to be able to leverage those learnings out as fast as possible,” she added.
And as the industry’s demographic becomes gradually younger, the process of incorporating technology into business practices will happen more naturally, according to Camino.
“We will definitely see younger professionals much more adept and much more open to utilizing data to influence some of the conversations that they’re having with their clients,” she explained.
What’s more, the younger generation of insurance consumers are actively seeking the kind of experience that technology can support.
“[That generation] is definitely looking for that very personalized, customized experience and advisory,” she said. “And so, where insurers and brokers are starting to leverage their data there’s just a great amount of
To read the full story as it appeared in Insurance Business click here.