Perceptions and Misconceptions of Big Data in Insurance

by Craig Beattie,  Nicolas Michellod, April 24, 2013
Industry Trends
Global

Abstract

Celent has defined five tiers of data capability: Spectator, Experimenter, Practitioner, Innovator, and Scientist. Celent now follows up this model with a survey of over 200 insurance professionals regarding attitudes and activities related to data from the insurance industry.

Celent sought to understand what level of capability insurers are operating at today and where they should be operating. This report presents the importance of data in the insurance industry and examines where insurers are in terms of investment in data-related technologies and in Big Data in particular. To do so, Celent launched a survey in February 2013.

Celent found an industry not faced with volume challenges, as the big in Big Data would suggest. Rather, insurers faced challenges with velocity and variety of data. Insurers think that their industry struggles to find value in Big Data offerings and is behind in investment, but Celent found evidence of pragmatic investment.

“Insurers should not believe that competitors are laggards,“ says Nicolas Michellod, Senior Analyst at Celent and coauthor of the report, “They must treat data as a critical raw material.”

“We think the insurance industry is set for a step change in customer engagement,“ says Craig Beattie, Senior Analyst at Celent and coauthor of the report, “Insurers often have teams with strong data analysis capability, a position many data startups would envy. “

This 28-page report contains 16 figures and 2 tables.

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned operating unit of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

Executive Summary

1

Report Methodology

2

 

Survey Participants

2

Data Challenges in Insurance

4

 

What Is Big Data?

4

 

Ranking the “V” Challenges

5

Current Big Data Adoption

7

 

People and Tools to Look at Data

7

 

Attitudes and Benefits

10

 

Perceived Position of Competitors

13

 

Perceived Customers’ Expectations

14

Investments in Data-Related Technologies

15

 

Data-Related Technologies’ Definition

15

 

Investment in Data-Related Technologies

16

 

Investment in Big Data

17

 

Top Priorities Using Big Data Infrastructure

18

Applying the Celent Big Data Adoption Maturity Model to Insurers

20

 

Where Are Insurers Today?

20

 

Current Vs. Desired Situation

20

 

Filling in the Gaps

20

Leveraging Celent’s Expertise

23

 

Support for Financial Institutions

23

 

Support for Vendors

23

Related Celent Research

24

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