Emerging data sources and advanced analytics provide an expanding universe full of promise for insurers

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Willis Towers Watson survey provides insights on the future of advanced analytics for Canadian P&C insurers

TORONTO, ON, August 2, 2018 — Three frontrunners lead Canadian property & casualty (P&C) insurers’ planned data sources for customer centricity: customer data, customer experience and social media. This finding, and the growing range of data sources that insurers find valuable, are key discoveries from a new survey about the future of advanced analytics. Willis Towers Watson (NASDAQ: WLTW), a leading global advisory, broking and solutions company, conducted the survey.

“Advanced analytics and emerging data sources are transforming insurers’ operations and customer experiences, but more data, in-depth analysis and new insights aren’t the end game,” said Nathalie Bégin, director, Insurance Consulting and Technology, Willis Towers Watson. “While data are the primary source of value in analytics, insurers also need to remain informed about the new technology that enhances analytical capability and system connectivity.

According to the survey, insurers acknowledge the high degree of importance for improving customer experience and say they’re striving to enhance it by harnessing data to establish faster service (90%), easier information access (74%), more personalized experiences (68%) and mobile-friendly applications (58%). The top data sources insurers plan to use for customer centricity include internal customer data (79%), customer interactions/surveys (74%) and social media (47%).

How insurers plan to improve customer experiences

 

Top data sources insurers plan to use two years from now for customer centricity

Now Two years
Internal customer data 63% 79%
Customer interactions/surveys 58% 74%
Social media 26% 47%
Clickstream data 26% 31%
Auto telematics 21% 26%
Web scraping 21% 26%
Home telematics 5% 21%

Source: 2017/2018 P&C Insurance Advanced Analytics Survey results (Canada)

“Retailers, online environments and apps have raised consumers’ expectations for a faster, smoother, more customized service, and insurers are now turning their attention to replicating these experiences,” said Bégin.

The potential of advanced analytics to transform claim management is evident from the survey. More than half (67%) of respondents will use it to evaluate claims for litigation potential in the next two years compared with 7% who use it now.

Respondents expect usage-based insurance to grow beyond auto, and anticipate using telematics and technologies associated with the Internet of Things to personalize risk assessment for homeowners (6% today, versus 18% in two years) and commercial property (0% today, versus 13% in two years).

Personal line insurers say the new data sources they plan to use most in two years include unstructured internal claim information (74%), unstructured internal underwriting information (48%) and other unstructured internal customer information (42%).

Insurers plan to increase usage of artificial intelligence and machine learning, and expect these techniques to identify high-risk cases, reduce time spent by humans, better understand risk drivers, build risk models for better decision making and identify consumer patterns to reduce risk.

Ninety-three percent of respondents say the level of understanding of advanced analytics models outside of their modeling teams is moderate or very limited. The top challenges preventing them from becoming more data-driven are infrastructure, data warehouse constraints (53%), data accessibility, difficulty of integration (47%), and information technology/services bottlenecks and lack of coordination (37%).

“While the benefits of advanced analytics are clear, insurers must access and deploy data to the right people at the right time for optimal benefit,” said Nicolas Beaudoin, senior director and head of Canadian P&C practice, Willis Towers Watson. “To improve understanding of how advanced analytics can benefit all stakeholders, insurers must focus on the data sources — new or better experience data, predictors and customer response information will prove the most beneficial.”

About the survey

Willis Towers Watson’s 2017/2018 Advanced Analytics Survey asked Canadian P&C insurance executives for their insights on the future of advanced analytics. Nineteen P&C insurers participated in the web-based survey fielded in fourth quarter 2017: 16 multiline carriers, one commercial lines carrier and two personal lines carriers. Respondents included nine of the top 20 Canadian P&C insurers.

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 over 40,000 employees serving more than 140 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.

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