Question: How effective are insurers at sorting through mounds of information and turning that allow them to make insightful decisions?

Overall, the insurance industry lags considerably behind other financial services in sorting through the mounds of information they possess to make insightful decisions. The industry should receive an “A” for aspiration, finally embracing the value of analytics and beginning to invest significant resources to the process. At the same time the industry should receive no more than a “C” for how effectively it has integrated analytics into daily processes around underwriting, claims and customer service.

Of course this evaluation varies significantly when looking at specific insurers, lines of business and business functions. Some major insurers have been investing heavily in staff and outside consulting services to begin mining data and enriching it with external information. Certainly the greatest progress has occurred in fraud investigation, catastrophe modeling, consumer marketing segmentation, personal insurance underwriting and high frequency claims functions. Very little progress has been made in using advanced analytics for larger commercial insurance and customer service support.