89% of insurers believe that data and analytics are either extremely or very useful to their business
Data and advanced analytics will fundamentally change the UK home and motor insurance landscape over the next few years.
That is according to a study by LexisNexis Risk Solutions.
The report- Deep, Rich and Meaningful - Insurers See Data and Analytics Transforming Their Business found that 89% of insurers believe that data and analytics are either extremely or very useful to their business.
96% of personal motor insurers and 89% of personal home insurers are already using data and analytics, and this is either extremely or very useful to their business.
And they see this trend continuing, with 82% of personal motor and 85% of personal home insurers saying that data and analytics will or probably will transform their business in the next year or two.
But the two sectors differ on what they think the main benefit of data and analytics to be:
70% of personal motor insurers felt improved, more targeted and enhanced customer experience to be the main benefit, but more than half of personal home insurers thought more accurate policy pricing was.
When asked about how they could use data and analytics more effectively, 69% of motor insurers and 60% of home insurers said that marketing could be most utilised, while 65% claimed to be ‘extremely or very positive’ about improving the ability to detect fraud.
Data and analytics – the key benefits
Improving targeted marketing:
70% Personal Motor 46% Personal Home
Improving the ability to detect fraud:
51% Personal Motor 54% Personal Home
Achieving better risk assessment:
53% Personal Motor 46% Personal Home
Making operational cost savings:
64% Personal Motor 50% Personal Home
Where else do insurers across both lines believe data and analytics could be better utilised?
Martyn Mathews, senior director of insurance at LexisNexis Risk Solutions, Insurance UK and Ireland said: “Our findings confirm just how fundamental data and analytics are to the insurance sector today and the role they will continue to play in shaping the sector over the next few years.
“Data and analytics empowers insurers by giving them a holistic view of customer behaviour, their individual risk and the ability to link valid information to real-time interaction. This helps insurers to not only understand risk, but also spot profitable opportunities and apply the right strategies across their books.”