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Survey Report

Advanced analytics: Are insurers living the dream?

2019/2020 P&C Insurance Advanced Analytics Survey Report (North America)

January 28, 2020

Many North American P&C insurers have indicated they have big aspirations when it comes to using advanced analytics to improve their businesses. By their own admission, most are falling short of those aspirations right now.
Insurance Consulting and Technology

The latest survey results suggest that many insurers have been either overambitious in stating their goals for advanced analytics or have had their longer-term vision blurred by the reality of the day-to-day business and market challenges. But pockets of significant market progress still exist.

Executive Summary

Data and advanced analytics capabilities have become prized currencies for many North American property & casualty (P&C) insurers looking to gain a competitive edge. This is hardly surprising — a large majority of respondents to our latest survey of progress in this area (as was the case two years ago) say their forays into advanced analytics have had a positive effect on the top line and, in particular, the bottom line (Figure 1).

Figure 1: Impact of advanced analytics on top- and bottom-line performance

Yet the nature of those capabilities — and the potential value and benefits they offer — are constantly changing as new potential sources of data become available and the analytical methods being employed by some competitors to gain an edge become more sophisticated.

The growing opportunities associated with the use of remote visual imagery in claim management offer a prime example, as does the more widespread adoption of artificial intelligence (AI) and machine learning techniques to achieve business efficiencies. The changing nature of relationships with InsurTechs, once seen as a threat to the very existence of some insurers, is also a factor. An altogether more collaborative approach is apparent among the companies that are tapping into this potentially rich seam of technological innovation and quick analytics wins.

From this latest survey, we see that many insurers continue to aspire to build up their advanced analytics reserves, notably in areas highlighted in previous editions — customer experience, claim management and telematics.

But we also see that current reality and rate of progress don’t always match the vision, which means that intentions to apply advanced analytics in some other areas, notably in expense management and marketing, are largely taking a back seat.

Survey highlights

Insurers expected to be farther along in using advanced analytics

Almost across the board of potential insurance function applications, progress with implementing advanced analytics has been slower than anticipated when we last conducted the survey two years ago, including in the key areas of customer centricity, claim management and telematics.

Big plans remain for customer centricity, but there’s a lot left to do

Insurers typically have even broader ambitions for using data to improve their customer focus in the short term than two years ago. Plans to expand the use of internal customer data (77% to 79%), social media (46% to 49%) and home telematics (27% to 37%) in the next two years illustrate that ambition. Progress since 2017, however, suggests they have a long way to go. 

Claim management applications take priority

Insurers have tempered their longer-term expectations for using advanced analytics in areas such as claim triage and fraud identification. But while progress since 2017 has still been slower than envisioned, comparatively speaking, the claim function has received some priority. Notable increases are apparent in the use of some data sources that can be seen as fueling claim management innovation, such as social media (now 38%) and images (now 24%) in personal lines, and unstructured internal data (now 53%) in commercial lines.

Telematics — a mixed bag

While concerns about the challenges of handling and analyzing mass volumes of telematics data have reduced in the last two years, a critical mass of companies that see a benefit from taking on these challenges may be reached, at least in personal automobile. However, companies see growth opportunities in commercial auto, homeowners and crop insurance. 

AI and machine learning on the rise

Both in terms of aspirations and progress to date, insurers’ use of AI and machine learning are trending upward. The percentage of respondents saying they use both to build risk models for decision making (26%) and to reduce manual input (22%) have doubled in the last two years. Sixty percent of companies are targeting such capabilities by 2021. 

InsurTech — dare to dream

Over two-thirds of survey respondents characterize their current state of InsurTech integration as early stage. Further, 22% say they’re not doing anything in that arena. Given that many InsurTech businesses are now looking to collaborate rather than compete with incumbent insurers, this seems like a void waiting to be filled.

Organizational challenges — same tunes, different words

Dreams of becoming more data-driven elude some companies because of three main obstacles: IT and organizational bottlenecks, data infrastructure, and lack of expertise and staff to analyze data. But North American insurers’ perceptions of these obstacles have changed over the last few years based on market trends and how companies choose to prioritize their efforts.

About the survey

Willis Towers Watson’s 2019/2020 Advanced Analytics Survey asked P&C insurers in the U.S. and Canada for their insights on the future of advanced analytics. Two distinct web-based surveys — one targeting technical managers, the other senior executives — were fielded in mid-2019. A total of 122 representatives (77 technical, 45 executive) from 99 P&C insurers participated, comprising 66 multiline carriers, 23 commercial lines carriers and 10 exclusively personal lines carriers. Respondents included eight of the top 20 P&C insurers from both the U.S. and Canada.

Number of participants in the 2019/2020 P&C Insurance Advanced Analytics Survey

Participants reported annual direct written premium as follows:

Annual direct written premium reported by survey participants

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    Fields of dreams

    By Nathalie Bégin and Lisa Sukow | January 28, 2020

    Many insurers aspire to build up their advanced analytics reserves, notably in the areas of customer experience, claim management and telematics, according to our 2019/2020 P&C Insurance Advanced Analytics Survey Report (North America).

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    Believers or day dreamers?

    By Nathalie Bégin and Lisa Sukow | January 28, 2020

    North American insurers expected to be farther along in using advanced analytics to gain a competitive edge according to our 2019/2020 P&C Insurance Advanced Analytics Survey Report. What’s holding them back?


Director – Insurance Consulting and Technology, Canada

Director – Insurance Consulting and Technology, U.S.

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