A new report from multinational professional services company Ernst & Young suggests that the use of data and analytics will play a central role in the development of the Canadian insurance market over the next few years.
Specifically, the report says that the extensive use of data and analytics tools can help Canadian insurance companies distance themselves from their competitors. It’s a particularly important strategy given lingering economic troubles and rising competition in this marketplace.
The good news, according to report co-author Marc-Andre Giguere: the amount of data accessible to insurance companies is rapidly expanding. Used wisely, this data can help insurance firms develop new tools that can enhance their profit margins.
“Companies have access to a lot of structured and unstructured data, such as information about customers’ lifestyles, online
Giguere says using this data will help some companies separate themselves from the pack. “Ignoring analytics will be very detrimental … in 2015 and beyond,” he notes.
Looking at the insurance market, Giguere sees the most potential for insurers involved in the rapidly changing automotive market.
“While a huge force on its own, analytics delivers more value when integrated with all facets of operations,” Giguere says. “That includes offering low insurance prices to low-risk drivers based on their driving habits, evaluating the value a customer can bring over a lifetime, and creating a more efficient claims process.”
For insurers, the goal should be to use data to improve their relationships with clients. “The goal is to create a consistent customer experience by integrating distribution and communication channels and providing enhanced transparency of information,” the report concludes.