7 Reasons Life Insurance Data Investment is On The Rise
1. The Life Insurance Data Imperative
Life and annuity carriers face a tough reality: They have been largely behind other insurers in addressing the digital revolution in customer interaction. But that is changing. Notable carriers are adopting modern core systems and distribution technologies at an increasing rate, and recent research from SMA shows that their investments in advanced data and analytics capabilities also are on the rise.
"Life and annuity insurers have significantly upped their game in data and analytics — they are spending about $1 billion more this year than they did last year and many are planning further increases," says SMA partner Mark Breading, who authored the Data and Analytics in Insurance: L&A Plans and Priorities for 2013 and Beyond report, which is based on survey responses from 164 insurers.
Insurers are using these investments to jump-start a simple cycle, Breading adds: understand customer needs better, develop more innovative products, and improve the sales process.
"The whole focus is on customer acquisition: how do we get more business in the front door?" Breading says. "A lot of the analytics are on customers, as well as agents and advisors: how should they be placed, and how are they performing?"
Product development also can't be underrated, Breading says, as life & annuities carriers must flexibly adapt to customer needs. Following are some insights from Breading's research into how insurers are spending on data, and some of the insight's they're already gleaning.