It doesn’t surprise me that analytics will be the key focus for Canadian Insures going forward. According to a recent survey by FC Business Intelligence, 59% of over 100 Canadian insurance executives surveyed, believe that analytics will gain the lion’s share of their attention in 2016. Furthermore, it was pleasing to learn that survey respondents named Earnix (along with Google, IBM and Apple) as one of the service providers that will be critical in delivering the future success of Canadian Insurance.
The following are 3 important takeaways from the survey:
1) Customer Centricity and Analytics – a top priority
In an increasingly competitive market, insurers need to differentiate themselves. 43% of survey respondents choose to do so through customer relationships, stating that the customer relationship should come first, above and beyond all else.
That’s where analytics comes into play; allowing the insurer to capture their customers’ data and extrapolate valuable insights like knowing what a customer needs and predicting customer behavior. Without having the right customer analytics foundation at hand, the customer-centric effort becomes a major challenge, much like driving with the sun directly in your eyes. As such, 72% of survey respondents declared that analytics is one of their top 5 priorities going into the New Year; 10% putting it in first place.
2) The Analytical Journey – it is not a one-time effort but a journey
Although the consensus is on improving analytics, many insurers find themselves at different stages in their analytical journey: 61% of respondents are in the throes of creating an analytical strategy and are planning on taking their first steps in 2016. 16% have already implemented analytics in some areas, while 15% are way ahead of their peers and are using advanced analytics. Only 8% responded that they are not ready to start their analytical journey just yet.
For the Canadian insurer, it is critical to continually focus on evaluating and improving data quality — because having data is one issue but being able to use the data is something completely different. Once the data is ready to be used, a modeling framework needs to be designed and built to turn the data into predictive models. These models can then be used for decision-making and deployed to the front office for use at customer interaction points.
3) Investment in Analytics – an investment in the future
The question many insures were asking themselves at the end of 2015, was have they actually seen a return on their investment from analytics yet? The numbers were positive – 36% were already seeing a return on their investment, 16% were seeing a healthy return on their investment, 18% expect to see a return after 2015 year-end numbers come in. 20% have yet to see a return and only 10% responded that they may not see a return for over 2 years.
But what analytics solutions should be next in line for capturing the IT budget-spend? Key areas of investment were around data management (better data, claims data, external data) and analytical enhancement that focus on the customer (predicative modeling, retention analytics and real-time solutions).
How do you stack up against your peers?
If you can answer yes to the following:
- You have put analytics as a high priority for 2016
- You have a customer-centric analytical focus
- You have allocated a healthy budget for developing your data and analytics practices
- You have a top-notch team or service provider in place to build and implement your analytical framework
then I think you are on the right path to a successful 2016!
To learn more, view the full infographic here.