ARLINGTON, Va., May 04, 2016 (GLOBE NEWSWIRE) -- Life insurers across North America foresee a dramatic shift in their application and usage of big data and predictive analytics over the next two years, according to leading global advisory, broking and solutions company Willis Towers Watson’s (NASDAQ:WLTW) Big Data and Predictive Analytics Survey. Survey participants were life insurance chief and senior financial officers, who said data mining continues to evolve with big changes in the future for both internal and external data collection sources.
Survey respondents indicated their companies have a lot to learn about the application and use of big data and predictive analytics, as nearly three-fifths (58%) said their organizations know only a little or understand just the basics. But nearly all insurers (92%) expect to use big data and predictive analytics in some aspect of their operations in two years. Further, only a handful (8%) expressed that they’re currently using data to inform decision making; however, over three-fifths (62%) anticipate doing so in two years.
“Many life insurers are just getting started with utilizing big data and predictive analytics across their business functions, though the momentum is clearly building to apply these tools for making critical enterprise decisions,” said Elinor Friedman, North America Life Insurance practice lead, Willis Towers Watson. “For most life insurers, achieving this goal will require a strong commitment to tackle barriers such as infrastructure limitations, investment dollars and competing demands on their time.”
Today, insurers’ primary use for big data and predictive analytics centers on increasing market penetration (53%), though they expect this to tail off slightly in two years (48%). Yet over the next couple of years, they envision ramping up big data and predictive analytics across several business areas. These include enhancing the customer value proposition (18% now versus 52% in two years), transforming the business model (12% versus 48%) and expanding customer relationships (41% versus 61%).
The change in focus will also be apparent in internal and external data collection sources. Insurers said they aim to use new internal data collection sources such as email interactions (18% now versus 27% in two years), website clickstreams (14% versus 36%) and agent-customer voice-to-text logs (5% versus 27%). Major changes are also expected to take place with external data collection, as insurers plan to gradually mine credit scores (39% now versus 63% in two years), websites (22% versus 42%) and social media (17% versus 42%) for intelligence.
Half of the insurers (50%) said improving risk selection is their top strategic goal for using big data and predictive analytics, while over half identified conflicting priorities (54%), data availability/quality (54%) and people (50%) — including availability of resources, training, skills and capabilities — as their primary challenges to address in using big data.
“Advancing beyond basic knowledge of big data and predictive analytics will require commitment that starts with attracting and retaining the right talent with the knowledge and experience to execute company strategy,” said Friedman. “Those able to break through these barriers will establish more clarity for decision making and greater opportunities for differentiation in a highly competitive marketplace.”
About the survey
Willis Towers Watson’s Life Insurance CFO Program provides ongoing research on issues of importance to the North American life insurance industry. The program enables CFOs and financial executives to benchmark their company’s approach to financial issues and challenges against those of their competitors. This survey program launched in 2002 and includes responses from CFOs and senior financial executives from large and midsize North American life insurers. This particular survey asked about current and planned use of big data and predictive analytics. It was fielded from September 15 to October 13, 2015.
About Willis Towers Watson
Willis Towers Watson (NASDAQ:WLTW) is a leading global advisory, broking and solutions company that helps clients around the world turn risk into a path for growth. With roots dating to 1828, Willis Towers Watson has 39,000 employees in more than 120 countries. We design and deliver solutions that manage risk, optimize benefits, cultivate talent, and expand the power of capital to protect and strengthen institutions and individuals. Our unique perspective allows us to see the critical intersections between talent, assets and ideas — the dynamic formula that drives business performance. Together, we unlock potential. Learn more at willistowerswatson.com.
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Source:Willis Towers Watson Public Limited Company