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Insurers appear ready to accelerate their embrace of big data, analytics and other aspects of emerging technology as they head into 2016, Novarica concluded in its third annual report on the matter.

But only a few emerging technologies have become ubiquitous among insurers. Many are still used by a minority of carriers despite gains, Novarica said.

What Novarica found: use of software as a service to enhance business operations has grown in nearly every emerging technology category, particularly in areas including mobile, big data and digital. Novarica tallied social, mobile, analytics, big data, cloud and digital adoption plans for its latest study.

“They all enable potentially disruptive changes in the insurance value chain,” Novarica President and CEO Matthew Josefowicz said in prepared remarks.

Some of the numbers come from very low starting points, however, while a few have become widely accepted:

  • Adoption of big data in 2016 should be about 17 percent, Novarica found in its survey, but that compares to less than 10 percent in 2014.
  • Social media/data analysis use among insurers should hit about 22 percent this year, Novarica said, compared to approximately 12-13 percent in 2014.
  • Use of mobile for distributors is expected to hit around a 35 percent rate this year, versus just over 20 percent in 2014. Mobile for policyholders will land a bit under 40 percent, up from approximately 25 percent two years ago, according to Novarica.
  • Social Media as a marketing tool is expected to land at just under a 60 percent deployment rate for 2016. That reflects growth from just over 50 percent in 2014.
  • Use of analytics as a modeling tool is also making huge leapscoming close to 60 percent deployment rate in 2016. In 2014, the number was just below 45 percent, according to Novarica numbers.

Novarica said that insurers have become pretty savvy about using social media in particular, for marketing purposes. That’s not yet the case with big data, because the technology remains far from ubiquitous among insurers even as adoption rates continue to climb.

But big datawhich can include social media data, Internet clickstreams, video and audio datacould be a hugely important tool for insurers to master, Novarica argued.

“If the insurance industry can effectively harness big data, it could have a transformational effect on product design, marketing and underwriting,” Novarica said. “A wealth of information about prospective risk could be analyzed before engaging with the prospective insured, potentially moving risk selection from underwriting to marketing. Claims analysis and customer profiling could be similarly enhanced.”

Novarica surveyed more than 100 insurer CIOs in November and December for its third annual report, tracking their expanded use of emerging technology in social, mobile, analytics, big data, cloud and digital areas. Twenty-five large and 16 midsize life/annuity insurers took part in the survey, along with 21 large and 54 midsize P/C insurers.

Novarica plans to hold a webinar on Jan. 20 that will elaborate on its findings.

Source: Novarica