Insurers Making Progress in Digital and Data Capabilities, but Core Developments Lag

Approximately 25% of pilot programs reported in last year’s study have been operationalized: Novarica’s 2nd Annual New Normal 100 Benchmark Study

Boston, MA (July 25, 2017) – Insurers still have widely divergent technology-enabled capabilities, but they are making progress especially in digital and data analytics areas related to marketing, underwriting, and product development. That’s according to the second annual “Novarica New Normal 100” capabilities benchmarking study of more than 80 insurers, published today by research and strategic advisory firm Novarica.

“Digital and data capabilities are growing among insurers,” notes Matthew Josefowicz, president/CEO of Novarica and lead author of the studies. “Looking at results among insurers who participated last year and this year, we see that about a quarter of capabilities that were in pilot last year have been deployed this year. Progress may be slow, but it is real.”

The Novarica New Normal 100: Digital, Data, and Core Capabilities for Insurers was published separately for property/casualty insurers and life/annuity insurers. Previews of the reports are available.

Novarica CEO Matthew Josefowicz will be presenting the findings from these studies in a webinar on September 6 at 1 PM EST. Interested participants can register here.

Some of the other findings from the reports include:

• Digital, especially mobile, is a major area of pilot activity for large P/C insurers. More than half report mobile pilots for agent new business and customer information access, as well as pilots for E-signature.
• More than half of P/C insurers report current capabilities in using data analytics for key functions in product development, underwriting, and claims, including predictive scoring. But fewer than a quarter report mature capabilities in these areas.
• Analytics usage in customer engagement is rare among life/annuity insurers, with less than a quarter of them reporting current capabilities in using analytics for retention modeling or other areas.
• Among life/annuity insurers, core capabilities are most advanced in underwriting, least advanced in product development and billing. This may reflect the current, still largely legacy, environment at most life/annuity insurers.
• Pilot activity in core capabilities is lower than in either digital or data, and the rate of conversion of previous pilots to operating capabilities is also lower, likely reflecting the greater complexity of modifying or replacing core capabilities.

Each report includes more than 50 figures analyzing deployment rates of 100 technology-enabled business capabilities that represent the “new normal” for insurers. These capabilities span product, marketing, distribution, underwriting, customer engagement, billing, claims, and finance/operations functions as well as digital, data and analytics, and core technology areas. The reports also provide a benchmarking tool for insurers to determine their own maturity levels.

About Novarica

Novarica helps more than 90 insurers make better decisions about technology projects and strategy through retained advisory services, published research, and strategy consulting. Its clients include more than 90 property/casualty and life/annuity insurers. Its knowledge base covers trends, benchmarks, best practices, case studies, and vendor solutions. Leveraging the expertise of its senior team and of nearly 400 CIO Research Council members, Novarica provides clients with the ability to make faster, better, more informed decisions. Its consulting services focus on vendor selection, custom benchmarking, project checkpoints, and IT strategy. More information at  www.novarica.com.

SOURCE: Novarica