Nine in ten life insurance companies report using big data analytics to better compete in today’s market, according to a new LIMRA report.
“While most companies are exploring big data analytics programs, less than a third feel they are ahead of their competition in this field,” says Norah Denley, senior research analyst, LIMRA Technology Research. “LIMRA believes as companies innovate and find ways to use new technologies to improve business results, there will be differentiation within the market.”
While two-thirds of companies say they have been using big data analytics for less than five years, 33 percent who have full-scale operations say their programs have been in place for more than a decade. Nearly half of companies are using big data analytics for six or more functions within their organizations, including:
- marketing initiatives,
- sales lead generation,
- claims/fraud detection and prevention,
- improving sales productivity
- and product development.
As companies explore how best to run these programs, many different models are emerging. The study revealed that one quarter of companies’ big data analytics programs are led by specific business units; another 20 percent business-unit led with corporate support.
Twenty-six percent of companies have established Centers of Excellence for their programs and 11 percent have their programs fully centralized. The remaining companies have other structures in place.
Not unexpectedly, funding and executive buy-in are the two most cited hurdles for companies to implement big data analytics programs as companies try to decide how valuable these programs will be to their organizations (See chart on next page).
But legacy systems and staffing also are a challenge. Currently most companies say they have fewer than 10 people dedicated to their big data analytics program and half report finding staff with the right business skills difficult.
The report, “The Big Picture: Big Data Analytics in Financial Services,” is based on the results from an online survey of 44 companies in May 2014.