Driving value from Data & Analytics initiatives

Driving value from Data & Analytics initiatives

Digital advances, the rise of social networks and the ‘internet of things’ are having a transformational impact on the volume, variety and velocity of data coming at organizations.

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Global Head of Insurance

KPMG in the UK

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While insurers and intermediaries are already very data-driven - capital modeling, pricing, reserving and claims management are all highly data intensive - antiquated systems and siloed cultures make it difficult to collect, store and analyse the seamingly infinit amounts of internal and external data now available. This presents a big challenge as insurers look to become more customer-oriented in product offering and services.  

In our recent survey, nearly two thirds of respondents said they still focus on descriptive and diagonistic analytics that provide insights into the past, while just 29 percent say their company uses prescriptive analytics.  This is not surprising given the challenges cited above.

What type of data analytics capabilities do you currently use?

  • 69%
    69%  Descriptive (what happened?; dashboards)
  • 41%
    41%  Diagnostic (why did it happen?; data discovery)
  • 51%
    51%  Predictive (what will happen?; forecasting and simulation)
  • 29%
    29%  Prescriptive (how can we make it happen?; planning and optimization)

Constructing a data innovation approach

Many data strategies fail to deliver as the focus has traditionally been on costly process and technology changes. Now insurers can do these complex projects economically and build an affordable proof of concept. This offers the ability to go beyond predicting future outcomes to using predictive models to dirve action.

We propose an evolutionary approach to data innovation, starting with:

  • A full understanding of the business outcomes that are driving the need for a data strategy.
  • Thorough assessment of the data landscape to understand the potential observations that can be used.

The goal here is to drive actionable insights from observing the business process that bring competitive advantage in a controlled and sustainable way.

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