According to a new survey result from WTW (Willis Towers Watson,
NASDAQ: WTW), a leading global advisory, broking and solutions
company, companies reveal slower than expected progress in their
efforts to implement advanced analytics. Despite the scale of
investment made by North American property and casualty (P&C)
insurers, WTW’s 2024 P&C Insurance Advanced Analytics Survey
highlights the challenges these companies face with data and
analytics.
Insurers have long used analytics in pricing and
underwriting, and only a few outliers remain today. However,
traditional analytics is increasingly insufficient in these
functions, with 49% of insurers saying they are incorporating AI
into their analytics processes.
However, while AI is used more in pricing and
underwriting, insurers struggle to integrate analytics into other
areas of their organizations. The aspiration is present, with many
insurers stating that they intend to incorporate analytics into
different areas, including claims, marketing, distribution, and
others, within the next two years. Nevertheless, considering the
actual use of analytics over the last few years, the results
demonstrate that progress has been significantly slower than
initially hoped for and, in some cases, non-existent.
When asked about the most significant impediment
to increasing the use of analytics in their organizations, the most
frequent survey response was IT bottlenecks. Despite the
considerable investment in technology over the last few years, this
trend has deteriorated instead of demonstrating improvement. In
addition to technology challenges, translating analytics needs into
business realities was frequently cited in the survey as a driver
behind the slow progress.
Laura Doddington, Head of Personal Lines,
Insurance Consulting and Technology (ICT), North America, WTW,
stated: “Insurers want to use analytics across their business - the
ambition is there, but it’s not translating into reality. If
insurers are to transform their aspirations into more tangible
capabilities, they must ensure that the right foundations are in
place. This requires technology solutions that allow for more
sophisticated use of analytics across the organization, ultimately
driving better decisions and a faster, more streamlined speed to
market. Technology needs to move from a bottleneck to an enabler.
This requires a robust roadmap and a clear translation from
business needs to analytics and technology requirements. And this
preparation cannot take years – insurers can’t afford to get left
behind. However, the good news is that agile, fit-for-purpose
technology solutions exist and, when utilized appropriately, can
quickly deliver real business value.”
Regarding the increasing trend towards the use
of AI, Lauren Finnis, Head of Commercial Lines, Insurance
Consulting and Technology (ICT), North America, WTW, stated, “The
use of AI is going to transform the insurance industry, resulting
in better outcomes for both insurers and consumers. Areas such as
Generative AI offer enormous potential to revolutionize our
industry, and investment in innovation is important. To maximize
value from this investment, ensuring that the right foundations are
in place is critical to allow insurers to capitalize on the
benefits this new technology can deliver. This includes a focus on
infrastructure, governance, data, and, above all, on solving real
business and customer needs. In addition, while companies are eager
to implement the newest technological solutions, it is important to
note that most companies are still not even close to realizing the
full benefit of more traditional AI approaches such as machine
learning. There are immediate and real gains to be realized by
applying these techniques throughout the organization.”
The insurance industry is moving faster than
ever, and those who can effectively activate analytics across their
organizations will be in the strongest positions to respond. With
86% of organizations surveyed saying they have seen a strong
leadership commitment to analytics, there are good intentions from
the top. The winners will be those who can execute at pace and
scale.
About the Survey
WTW’s 2024 Advanced Analytics Survey asked
P&C insurers in the United States and Canada for their insights
on using advanced analytics in insurance. Read the complete report
here.
About Insurance Consulting and
Technology
WTW’s Insurance Consulting and Technology
business serves the insurance industry with a powerful combination
of advisory services and leading-edge technology. Our mission is to
innovate and transform insurance, and we deliver solutions that
help clients better select, finance, and manage risk and
capital.
We work with clients of all sizes globally,
including most of the world’s leading insurance groups. Over 1,000
client companies use our specialist insurance software on six
continents. With over 1,700 colleagues in 35 markets, we
continually strive to be a partner and employer of choice to the
insurance industry.
About WTW
At WTW (NASDAQ: WTW), we provide data-driven,
insight-led solutions in the areas of people, risk, and capital.
Leveraging the global view and local expertise of our colleagues
serving 140 countries and markets, we help organizations sharpen
their strategy, enhance organizational resilience, motivate their
workforce, and maximize performance.
Working shoulder to shoulder with our clients,
we uncover opportunities for sustainable success—and provide
perspective that moves you. Learn more at wtwco.com.
Media Contact
Douglas Menelly, Public Relations Lead, North
AmericaDouglas.Menelly@wtwco.com | +1 (516) 972 0380
Arnelle Sullivan, Public Relations Associate, North
AmericaArnelle.Sullivan@wtwco.com | +1 (718) 208-0474
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