We estimate that collectively the industry could tap up to $874 billion in value by investing in a data-driven approach.
DALLAS (PRWEB) December 16, 2022
By investing in becoming data-centric organizations, insurance companies can unlock a collective economic value of US$874 billion, according to Everest Group. This potential lies in the impact data and analytics can have in helping organizations increase operational efficiency (US$306 billion), reduce claims leakage and fraud (US$117 billion), and achieve premium growth in the Property & Casualty (US$285 billion) and Life & Annuity (US$166 billion) sectors.
“Insurers today are challenged by an environment of high uncertainty that includes natural disasters, geopolitical and macroeconomic risks, the repercussions of a global pandemic, inflation and the looming threat of a recession,” said Ronak Doshi, partner at Everest Group. “Nevertheless, they can unlock immense value and come out on top by investing in data and analytics. Everest Group has documented how insurers can use data and analytics to achieve cost savings from increased operational efficiency, reduce claims leakage and fraud expenses, and drive premium growth by unlocking higher sales efficiencies and rapid product innovation. We estimate that collectively the industry could tap up to $874 billion in value by investing in a data-driven approach.”
Currently, insurers’ data and analytics spend is growing at an accelerated rate of over 25% annually. The spend is being directed toward digital transformation of business operations. Key priorities include:
- Modernizing the data estate (especially, eliminating data silos and storing customer data in a governed data lake), enabling a single view of customers across ecosystems.
- Redesigning operations to infuse data across workflows to enable enterprise-level, data-driven decision-making capabilities
- Leveraging cloud-based analytics and AI/ML (artificial intelligence/machine learning) tools to process large data volumes for more effective risk assessment, building hyper-personalized products, and improving agility to respond to customer demands.
- Building focused solutions to extract value from existing data, especially to build value-added products and services and minimize loss ratios.
These improvements will lead to value creation across five key areas:
1. Product and experience innovation
2. Minimization of claims payout
3. Enhancement of operational efficiency
4. Reduction in fraud abuse and claims leakage
5. Revenue growth
These findings and more are detailed in Everest Group’s recently published report, “Insurance IT Services – State of the Market 2022: Unveiling the Economic Value of Data and the Road to Actualization.” In this report, Everest Group showcases the need for a platform-based operating model with a collapsed data supply chain that can enable insurers to transition into data-driven organizations. In addition, the report examines the global insurance IT services outsourcing market and lists various services and technology providers across the data and analytics ecosystem that can help insurers maximize the value from their data and analytics initiatives.
About Everest Group
Everest Group is a leading research firm helping business leaders make confident decisions. We guide clients through today’s market challenges and strengthen their strategies by applying contextualized problem-solving to their unique situations. This drives maximized operational and financial performance and transformative experiences. Our deep expertise and tenacious research focused on technology, business processes, and engineering through the lenses of talent, sustainability, and sourcing delivers precise and action-oriented guidance. Find further details and in-depth content at http://www.everestgrp.com.