Survey takeaways: running down the predictive analytics hill

Our survey demonstrates the rapid progress that life insurers in the Americas expect to make with predictive analytics over the next two years. It seems that many life insurers are on the cusp of a real transformation in the core functions of their business.

Plans or intentions are one thing, but bringing them to life, quite another. Based on our experience supporting both property & casualty (P&C) and life insurers in implementing predictive analytics, we believe it’s likely to involve the following:

• Choosing and accessing the most valuable data. For those who may have read our previous P&C advanced analytics survey report, we make no apology in repeating that the biggest, quickest wins will typically come from sourcing new (or better) experiences and/or customer data, some of which may already exist within the organization.
• Analytics with a purpose. Choose appropriate analytics techniques for the objective. There’s a whole raft of techniques and software out there, including AI and machine learning, but choosing the best method for the job at hand is important.
• Picking winners. Transforming an entire business in one hit is unrealistic. In the relatively early days, at least, target areas for improvement precisely so successes can be shared and, if things don’t work out as expected, lessons can be learned without severe collateral damage.
• Overcoming legacy. Legacy IT systems are potentially a major obstacle to making progress with advanced analytics. Companies may need to invest to innovate, including looking at what’s coming out of the InsurTech movement.
• Taking the business along for the ride. The survey results demonstrate that most companies have work to do. They need to spread the word and build understanding across their businesses — among underwriters, claims and customer services teams, and marketers — that enhanced predictive models will shape insurers’ competitive future.