PriyaPatel
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TLDR:
Key Points:
- Insurance companies struggle to extract value from data and technology investments.
- Technology leadership can lead to significant business improvements.
Insurers Struggle to Extract Value from Technology
Insurance companies can gain a competitive edge by leveraging data management and analytics, but only 5% to 10% of them are currently able to extract value from their data and technology investments, according to a Bain & Company analysis. The report emphasizes the importance of technology leadership in achieving premium growth, reducing expense ratios, and enhancing customer loyalty. It also highlights the need for insurers to modernize their technology systems and make productive use of data to tap into emerging opportunities.
When comparing the scale of technology investment between carriers that are technology leaders in the property/casualty space versus carriers that are not, technology leaders stand out in several areas. Technology leadership can lead to up to 3 percentage points higher premium growth and 5 percentage points lower expense ratios, according to Bain.
The report suggests a playbook for improving technology throughout the enterprise and applying it to pressing business issues. It cites examples of companies like Allstate, Progressive, and Esure, which have successfully modernized their technology and data usage.
For the foreseeable future, insurers that don’t continuously modernize, innovate, and simplify their technology systems risk becoming not just inefficient but irrelevant. Purposeful investment creates a virtuous circle of increased value, market share growth, and the ability to invest further in tech innovations as they materialize.
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