According to the latest study by Bain & Company that collects information from 90 insurance companies worldwide, between 24% and 27% of insurers plan to invest in the next few years in advanced data analytics.
The report offers an overview of how insurance companies can invest on Big Data to make a better decision and reveals interesting insights. One of each three life insurance companies and one of each five dedicated to P&C, still are not using any type of Big Data tools to process information about their current or potential clients.
The insurers that do use advanced analytics apply this technology to the marketing and commercial areas, which is the most usual, followed by Fraud Control.
Henrik Naujoks, co-author of the study and responsible for the financial services area for Bain in Europe, Middle East and Africa, said that in the majority of insurance companies the central topic is data management and technology inversion, when there could be a lot more of benefits from real-time information that data offers to take strategic decisions about the business, its processes, and the clients.
Bain & Company suggests there are three areas where data analytics can improve the decisions making process: Customer experience, innovation, and claims.
- Customer experience: Through advanced analytics, insurance companies can connect in a better way with the client’s needs faster, simpler and cheaper. For example, when a life insurance company combines information from potential clients with external health data to predict which would apply for a coverage.
- Innovation: Big Data offers the possibility to predict which products and services would like the most to the clients and to expand the market.
- Claims: When analyzing the profile of a potential client in public and private data base in the US, a P&C insurance company avoided to sign highly risky contracts with a value of $100 m.