Key Opportunities in Outsourcing Insurance Analytics

Analytics is not new to the insurance industry. Data has traditionally been valued to fine-tune the actuarial and underwriting process. In the last few years, however, the scope and applicability of analytics within the insurance organization has grown exponentially. Best in class insurers are actively leveraging analytics to become more competitive within life and pensions, property and casualty (P&C) and reinsurance. Some firms are doing this by rapidly absorbing the data scientist talent pool to build in-house analytics centers of excellence. Others struggling to find internal champions, talent and resources have found success by working with third party analytics providers. These initiatives are often based on existing service provider relationships in IT, business services or consulting. More insurers are using a hybrid strategy of developing in-house analytics and business intelligence (BI) centers of excellence, along with provider partnerships in analytical support. Our recent State of Outsourcing study (see chart below) found that 21% of insurers are looking to outsource for the first time or increase the scope of insurance analytics in the next 12 months. Another 38% are satisfied with their current analytics partnerships. In this document, we discuss these existing and emerging opportunities for both insurers and their service providers.