Insurance industry not on top of data use - report

Insurance industry not on top of data use - report | Insurance Business Asia

Insurance industry not on top of data use - report
A report published by the International Institute for Analytics (IIA) found that the insurance industry was ranked the lowest (12th) against other industries for analytics maturity, suggesting that insurers are having a difficult time making sense of all the data they gather.

“We have this data, but we can’t make heads or tails of it because we have data integration problems and there’s no data governance,” Aite Group senior analyst Samantha Chow told InformationWeek.

“[Insurance carriers] are hiring data analysts and data scientists, but it’s very fragmented. They don’t have the support they need [to improve] their targeting, products, pricing – all of these things they’re trying to do.”

Lead generation was cited by the report as a major problem for the insurance industry. With older agents retiring and more insurance businesses being transacted online, lead generation needs to adapt to these trends or risk losing relevance. Currently, lead generation involves a series of data, external partners, and internal systems, which all need to work in concert to create compelling-enough offers to consumers.

Aite Group recently came up with its own report which found that insurers have difficulty utilising the information they have obtained from lead generation vendors. It also found that data acquisition costs are rising because insurers do not know how to properly target young prospects.

To reduce lead generation costs, the report suggests that insurers need to improve their capabilities to use data and analytics.

“We’re seeing acquisition costs go down [among auto insurance carriers] but [for the rest] it’s going to be learning who your target market is, having the supporting data, and being able to hone in on that particular consumer. It’s not going to be easy,” commented Chow.

InformationWeek also said that insurers need to work on their ability to act on “triggers” – things the clients say that could suggest their interest in a specific product. To get the information they lack, insurers should rely on third-party sources such as credit information providers and social media analytics partners.

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