A global survey of insurance industry leaders reveals that many say they are making decisions for their business in isolation, with limited awareness of the broader consequences.
The study from Risk.net and sponsored by data and analytics leader SAS found a number of indicators that insurance decision makers are often working in silos – whether by choice or due to obstacles within their organisations.
The “Breaking Silos: Agile Insurance in an Uncertain World” report on the study says that nearly four in 10 respondents (38%) said they aren’t sure their organisation has a comprehensive, real-time view of risks, revenue and costs. On a positive note, 85% of respondents say their organisations have a clear vision and strategy for success, and they mention data and analytics, AI and digital platforms as top technology investment priorities – indicating that the industry is acting on the need for more connected decisions.
Identifying gaps in decision making
The study surveyed 350 senior insurance leaders from around the world, followed by a series of interviews. The questions examine how insurers are responding to challenges including climate change, cyber threats, regulatory uncertainty and wavering customer trust. From their responses, a few key themes emerged:
- Room for improvement in alignment
A large majority of respondents feel their companies have a plan for success. But 38% are not confident that the structure, processes and technology are aligned to support that strategy. Further, while poor data quality is seen as the biggest obstacle to robust decision making (41%), it is closely followed by lack of collaboration and confused ownership, each at 36%.
- Many decisions are still not data-driven
In claims management, over 40% say decisions are based more on gut feel than on detailed analytics. Other areas report being more data-driven; in financial management and regulatory reporting, more than 70% say decisions are informed by analytics.
- Insurers face familiar challenges
The strategic challenges most frequently named by insurers are the same ones every industry is facing: economic uncertainty (55%), regulatory change (41%), technological innovation (35%) and cost pressures (34%). And among technology and data leaders, 60% point to budget constraints as their biggest challenge – perhaps shedding some light on why analytics solutions are not more widespread.
Principal Global Insurance Industry Advisor at SAS, Franklin Manchester, said, “Technology such as AI can help, but a disparate technology investment is a poor substitute for a cohesive business strategy. That’s reflected clearly in this research: The path forward has to be adopting and championing a cohesive approach.”
While the organisational alignment for insurers may not be where it could be, technology offers the possibility to address that issue. Respondents and interviewees note multiple opportunities for AI, machine learning and advanced analytics to improve data quality and cross-functional alignment and to streamline fragmented processes. M