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Survey Report

Predictive analytics speeds innovation for life insurers

Life Predictive Analytics Survey Report

Insurance Consulting and Technology
N/A

July 8, 2019

How are life insurers using predictive analytics to transform their businesses? Our survey shows the market is at a tipping point.

The use of predictive analytics — the application of data and analysis techniques to gain more accurate insights to run businesses and enhance customer experiences — has grown in selected pockets of the Americas’ life industry in recent years.

But our latest survey shows that growing competitive pressures and changing customer expectations, in particular, are raising the stakes and building momentum for future investment (Figure 1). Life insurers in the Americas are not exactly staring over a precipice, but many — led by large individual life carriers that have set the pace to date — certainly see themselves as at or near the top of a predictive analytics hill with market gravity exerting greater force.

Figure 1. Current and future trends for investment in predictive analytics

Large carriers (> $3 billion written premium) Now Two years
Individual life 70% 90%
Group life 71% 100%
Retail individual annuities 71% 71%
Institutional annuities 50% 83%
Individual health 40% 80%
Midsize carriers ($1 - $3 billion written premium) Now Two years
Individual life 50% 75%
Group life 67% 100%
Retail individual annuities 13% 38%
Institutional annuities 50% 75%
Individual health 40% 40%
Small carriers (< $1 billion written premium) Now Two years
Individual life 53% 89%
Group life 23% 46%
Retail individual annuities 18% 32%
Institutional annuities 11% 33%
Individual health 15% 38%

About the survey

Willis Towers Watson’s 2018 Predictive Analytics Survey asked life insurance executives based in the Americas for their insights on the future of predictive analytics. The web-based survey was fielded from August 15 to September 25, 2018, and covered:

  • Key applications that are used today and ones being considered for the future
  • Types of external data being leveraged for predictive analytics exercises
  • Types of technology being leveraged
  • Organizational structure of analytics teams and users
  • New modeling techniques that are gaining momentum
  • The impact of predictive analytics on business results
  • How fast change is expected to happen

Representatives from 51 companies, totaling over $138 billion of annual premium, participated in the survey.

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