Property/casualty insurers in the U.S. have big plans to boost their use of advanced analytics and data in their businesses in multiple ways, but there are potential roadblocks, according to a new Willis Towers Watson survey.
Approximately 83 percent of respondents said that there is moderate or very limited understanding of advanced analytics models outside of their modeling teams. Companies also said they saw challenges ahead including infrastructure, data warehouse limitations, data accessibility, difficult integration, lack of coordination and information technology/services bottlenecks.
“Insurers still have work to do to improve the levels of understanding around advanced analytics outputs for those who use them within their business,” Ben Williams, senior consultant, Insurance Consulting and Technology for Willis Towers Watson, said in prepared remarks.
Williams added that “the benefits of advanced analytics are hard to attain if companies can’t access and use data at the right time, in the right place and deploy it to the right people, including the end customer, in a comprehensible way.”
Even so, the Willis Towers Watson survey found that U.S. property/casualty insurers have three main priorities with data and advanced analytics: customer experience; claims management; and telematics data for pricing, customer selection and product design.
Here are specific responses outlining those areas:
Customer Experience. Insurers said they’re trying to boost the customer experience, with 67 percent pledging to use data to create faster service, 65 percent promising to use it for easier information access, 61 saying they’ll weld it for more personalized experiences and 53 percent responding they’d use it to help create mobile-friendly applications. The use of data will else help 76 percent of respondents develop more customer-centric experiences, with customer interactions/surveys a focus of 69 percent who will use data to shape processes. About 57 percent plan to focus on data in terms of auto telematics.
Claims. Approximately 74 percent of respondents said they’d harness the technology to evaluate claims for litigation potential over the next two years, compared to 15 percent now. About 82 percent said they’d boost their use of advanced analytics through the same time period for evaluation of claims-related fraud potential, versus 26 percent now. Claims triage is also a priority, with 80 percent promising to use the technology within two years, compared to 26 percent now.
Telematics. Most respondents said they expect telematics to grow beyond auto. About 65 percent said they expect to use it and related technologies connected to the Internet of Things to personalize risk assessment for homeowners insurance (versus 0 percent today). Approximately 38 percent will use the tech combo for commercial property, versus none currently. Around 90 percent said that telematics will impact their pricing over the next two years, while 80 percent said it would influence underwriting.
Meanwhile, 70 percent of personal lines insurers expect to use UBI within two years, with 61 percent pointing to greater use of unstructured internal claim information over that period. Approximately 52 percent disclosed they’d incorporate smart home/smart building data, unstructured internal underwriting information and social media. For commercial insurers, 92 percent said they’d use more unstructured internal claim information and 54 percent would rely on other unstructured customer information.
Insurers also plan to use more artificial intelligence and machine learning to help identify high-risk cases and build risk models that lead to better decision making, Willis Towers Watson said.
Willis Towers Watson said 51 P/C insurers participated in their web-based survey, which was fielded in the 2017 fourth quarter. Broken down, that included 33 multiline carriers, 14 commercial lines carriers and four personal lines carriers.
Source: Willis Towers Watson