We surveyed 30 Australian and New Zealand insurers to gain a snapshot of Big Data innovations across the industry. Here’s what we found …

View the results

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What did the survey cover?

  • Insurers of all shapes and sizes – from specialised niche insurers to large multiline private and government insurers
  • Participants included executives and senior management
  • The following results reflect the thinking of the decision makers within the insurance industry.

Results

Is Big Data on your organisation’s agenda?

97% of survey respondents said that Big Data initiatives were on their organisation’s agenda

Thanks to technology… Recent technological developments have quickly progressed the ability of IT systems to deal with immense volumes of data. There is huge potential for innovative use of data assets to improve business outcomes – from improving operational processes such as claims management to optimising marketing expenditure. While Australian businesses have generally lagged the global Big Data trends, insurers that embrace the possibilities of the Big Data wave stand to benefit from the first-mover advantage.

But it’s early days …

Insurers' Big Data progress

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did not have a strategy

are developing their strategy

had pilot projects underway and

we're well into implementation

Why haven’t we made progress?

Other business priorities and a lack of available resources seems to be holding us back. We believe that over the coming two-three years, as the early adopters start to see results, Big Data will become an immediate priority for all insurers. Most insurers, with some notable exceptions, have only recently started to fully understand the possibilities and value of Big Data for their business.

Who is championing Big Data?

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Executive initiatives - supported by actuaries and IT

The Big Data lead is being taken by senior management

80% of respondents also saw actuaries as being part of the leadership group in their Big Data initiative

70% of respondents also plan for leadership from their IT groups.

Key roles to support Big Data initiatives

 

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The result is not surprising, given Big Data is all about technology and the analytics that the emerging technology enables.
Seeking leadership from these groups is an intuitive decision.

Implementation timeframes targets

Most insurers will be on board in the next two years.

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Now or never?

Many insurers see this as a medium term opportunity. We believe that there are opportunities to do things quickly and agility to be gained by thinking outside the box. However, legacy systems may require a significant change program to implement at an enterprise wide level.

Do we have the skills to get this right?

Two thirds of respondents recognise new skills are essential piece of the Big Data puzzle

What skills do we need?

Whilst business, IT and actuarial skills should form the cornerstone of any Big Data team, there are a host of new types of professionals that can add value to Big Data initiatives such as data scientists and data engineers.

90% of respondents saw internal actuarial and research functions being responsible for the analytics of their Big Data. However, there is a significant opportunity to bring other disciplines into the fold to enhance the insights and value of Big Data enabled analytics.

As the technology and our understanding of its uses develop, there will be more hybrid professionals to emerge that don’t exist today. Insurers may need to think outside the box to recruit new types of professionals.

Where is the data coming from?

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Greater use of internal data is the priority

The majority of those surveyed see the value of greater use of their own internal data sources. Most insurers are already using sources of external data (such as ABS or vehicle characteristics) to enhance risk modelling and pricing. However, there is a growing recognition that a greater use of external data sources (both in data sources, and its business applications) can be of tremendous value to the insurance business.

Where the value is…

The value is seen on many fronts, but portfolio optimisation and greater efficiency through automation are priority areas. The results reflect immediate opportunities for insurers, with the very real possibility to expand into new areas.

Marketing and customer service may be the Big Data dark horse. Knowing existing and potential customers more intimately can lead to efficiencies in customer acquisition and cross-sell by focusing acquisition spend on “segments of one”, rather than the traditional channel based strategies.

Business areas where Big Data value is considered “high”

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Proportion of respondents that consider the value of Big Data to be “high” in the given area.

Expected Big Data value by business area

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Data sources – a focus on structured data, but are we missing something?

For insurers, their own internal data is most valuable from a pricing perspective, so it is no surprise that greater use of enterprise-wide internal data is seen to be of value. However, external data is seen to be valuable by just as many, although the focus will initially be on structured data.

We think there’s also lots of potential to use unstructured data.

Proportion of respondents expecting to use these data sources

Internal

 

89% of respondents expect to use internal data sources in building a Big Data solution

External

 

83% expect to use external data sources

Unstructured

 

Only 33% expect to use unstructured

How are you placed in the big data landscape?

The Finity Big Data team are available to help clients to fully embrace the substantial opportunities Big Data technology presents and decide – where to from here?

Aaron Cutter

Ph +61 2 8252 3321
Mobile + 61 417 527 204
aaron.cutter@finity.com.au