Denver, CO – Valen Analytics, an Insurity company, recently published its sixth annual 2019 Outlook Report. Employing industry and proprietary research, the report identifies evolving technology-based economies, informed by data, as the primary determinants in shifting dynamics within the insurance industry.
Key findings of the report include:
Small commercial market growth is fueling demand for data analytics solutions:
- Data analytics tools offer insurers an edge in this market, enabling automation and scalability to improve customer experience and pricing.
The competitive advantage provided by data consortiums enables highly predictive, actionable insights. Valen’s proprietary research finds:
- Synthetic variables appended with consortium data have up to 13 times more predictive power than variables built with policy-only data.
- While large aggregated data sets are still relevant in identifying useful trends, behavioral and transactional data will drive real-time decisions for quoting, underwriting, and claims handling.
Valen’s long-standing Underwriting Analytics study supports the market momentum centered around growing use of data-driven decision making:
- There’s a growing trend in insurers adopting data analytics indicating a future where insurers will proactively define how changes in technology and economy affect their business.
- Incorporating predictive analytics into underwriting strategy is higher amongst insurers (77%) compared to the last three years (60%).
On the talent and IT management front, the report finds that 73% of insurers surveyed indicate moderate to extreme difficulty in finding data and analytics talent and that most insurers report an IT backlog of two to three years.
“The evolution of the innovation economy has transformed the industry by redefining risks, premiums and insurable interests,” said Kirstin Marr, President of Valen Analytics. “Data and analytics have reached a strategic level of importance for industry players looking to get ahead of the curve. Leading insurers are leveraging data analytics as the gateway to all components of innovation, rather than limited to a specific use for individual products or initiatives.”
Findings also support growing investor confidence in Insurtechs and an overall push for innovation in the industry.
The 2019 Outlook Report, including the 2018 Valen Underwriting Analytics survey results can be found here.