- Where Insurance & Technology Meet

Analytics Investment Increasing for Business Generally, Insurers Specifically

At the beginning of this year, we identified analytics as a mega-trend which we felt would be an overarching priority in 2012.  A couple of recent reports show that we seem to be on the right track, if spending is any guide.  We’re interested in knowing whether analytics is a priority for you.

A recent report by International Data Corporation (IDC) suggests that business analytics software has reached a level of maturity and achieved significant penetration within the business community.  Quoted in BuisnessWire, Dan Vesset, program vice president for IDC’s Business Analytics Solutions, said: “Driven by the attention-grabbing headlines for Big Data and more than three decades of evolutionary and revolutionary developments in technology and best practices, the business analytics software market has crossed the chasm into the mainstream mass market.”

As a result, IDC forecasts that the worldwide market for business analytics software will continue to grow at a 9.8% compound annual growth rate (CAGR) through 2016 to reach US$50.7 billion.  Currently, the fastest growing segment of the market is the data warehousing segment (15.2% year over year in 2011), closely followed by the analytic applications (13.3%) and the business intelligence/analytic tools (13.2%) segments.

The IDC report also notes that industry specific solutions will take hold during the forecast period.  This is supported by recent data from the analyst/consulting firm Strategy Meets Action (SMA).

In collaboration with ACORD, SMA completed a survey of 165 North American insurer representatives, focusing on current and future plans for data management and analytics.  Commenting on the research, Mark Breeding, SMA Partner,  noted that survey respondents are spending nine percent of their IT budgets on data and analytics.

This is not all of the spend.  Breading says, “What is even more interesting is that business units outside of IT are spending approximately the same amount. All together this represents almost $10 billion in spending each year.”  And the trend is expected to continue.  The survey found that three-quarters of the the respondents plan to increase spending on analytics and Big Data.

The survey respondents indicated that there are benefits from use of ACORD standards in the new, analytic driven world.  These include promoting consistency for process management, enabling consistent definitions for application strategies, and providing a single reference model to bridge the Business/IT gap.

What do you think?  Is analytics a priority area for you?  What are key elements that you are following?  What benefits are you seeing?