Time to get more satisfaction?
Over the last few years insurance tech companies have been using data analytics to overtake traditional insurers and offer cost-effective, tailored products to consumers. Now is the time for traditional insurers to recognise data analytics as a core capability and make the required investment to defend future market share.
- How to make data work for you
- Vision and Strategy
- Key messages and recommendations
- Increasing buy-in
- Get in touch
A little less conversation, a lot more action–tactics to get satisfaction from data analytics1 argues that incumbents should be concerned about these investments, as they provide competing start-ups with the freedom and agility to explore, innovate and exploit new routes at an alarming pace without incurring the high operating costs that incumbents have. In recent years, much noise has been made about the value of data analytics in enhancing risk assessment in underwriting, reducing the cost of claims, identifying new sources of profitability and improving the customer experience. Yet, Deloitte research shows that the vast majority of insurers struggle to articulate the return on investments made in analytics capabilities while the slow, linear increase in investment in non-technology related analytics is in stark contrast with the boost being received by insurance start-ups from investors.
Vision and strategy
Insurers often fail to recognise the true potential of analytics due to the assumption that successful analytics is an IT-driven process, gathering data from source systems into an analytics solution. This mind-set can lead to a disconnect between the decision making process, business value and analytical insight. An analytics vision needs to support the overarching business strategy, embedding insight into the underlying drivers which move an insurer towards its goals. Moreover, it needs to help an organisation find areas in which to gain competitive advantage or innovate services.
Many analytics strategies have grown organically over time and have been developed in a piecemeal fashion. A concerted effort, driven by senior leadership, to refresh the vision and reignite support for insight-driven transformation of services, products and operations, is required to drive alignment across the organisation
Key messages & recommendations to become an Insight Driven Organisation
To increase buy-in and secure sufficient budget for future investment, it is vital to be able to identify and track the return on investment. A combination of not being able to identify the benefits and not having a clear vision articulated across an organisation can lead to a negative return on investment. There are a number of common reasons why organisations may not be realising the benefits from data analytics:
- scope of data analytics projects lack direction: insufficient liaison with key business stakeholders and users to identify why the solution would be valuable and how this value will be measured;
- solutions are driven by technology: organisations have invested in buying off the- shelf solutions which are not aligned to specific business drivers or pain points within the organisation;
- lack of adoption of solutions: more effort is required to integrate the solutions or insights into the everyday operations of the insurer and manage the people and cultural changes required to see results;
- Incomplete ‘insight process’: the analytics process stops at the development and release of the analytics solution and does not account for measuring activity, progress or results in an industrialised state.
We believe that short-term tactical projects are important and serve a purpose. They help to finance further investment, maintain responsiveness of stakeholders and shape the analytics programme as the organisation learns more about the disruptive environment it is operating in.
To find out more, read the full report here.