Skip to main content Skip to Footer


Harnessing the data stream: Changing the way the insurance game is played

Insurers must explore, mine and harness external data to remain competitive, to find new growth opportunities, and to improve their loss ratios.

Insurers have been pioneers in using data and analytics, but the game is changing, and quickly. A flood of external data, from sources including government and third-party databases, social media, the Internet of Things and insurers’ own call centers and company websites, is creating opportunities to identify and act upon insights hidden within this sea of information.

We estimate that astute insurers can increase profitability by between 10 and 20 combined ratio points by using analytics to measure risk in underwriting more precisely; to anticipate and prevent losses with real-time monitoring; and to increase sales via more targeted distribution strategies. But insurers that cannot or are unwilling to act will be unable to identify and pursue the best risks because they will not know where to look.

"With analytics and insights drawing
upon new data
sources, insurers
can explore
entirely new opportunities
for new products
and services."

New competitors emerging

Non-traditional competitors such as insurance aggregators are using data to simplify the purchase of insurance products and offer customers a more frictionless experience. But insurers have many advantages in this competition, including vast quantities of proprietary data and the knowledge of how to price risks and process claims.

New sources of external data can help insurers gain deeper insight into risk factors and substantially improve loss ratios.

Accenture believes insurers should focus on three core sources of value: 1) Continuing to develop proprietary insights into risk selection and pricing; 2) Using internal and external data to improve market segmentation and the customer experience; and 3) Increasing efficiency and reducing overall costs by using data to digitize and/or automate existing processes.

Using external data and analytics to create value

Analysts now have a wealth of data at their fingertips that they can slice and dice to drive new insights; they can quickly go through data sets and test ideas to reach the right answer in a matter of hours.

Insurers now need robust data quality management, with rapid, near-real-time feedback mechanisms. These become all the more important as the business grows increasingly dependent on external data and analytics.

Insurers also need a new approach to dealing with the workforce. Larger segments of the workforce need to be trained in using analytics to add value to marketing and core insurance functions.

Changing the landscape for insurers

Insurers are already using external data in areas ranging from marketing to underwriting to claims management to pricing.

  • Enigma, a New York based tech start-up (and a graduate of Accenture’s FinTech Innovation Lab) provides property and casualty insurers with real-time notifications about changes in the status of commercial buildings, including the addition of kitchens, boilers and other features that change the buildings’ risk profile.

  • A start-up called Drive Spotter is developing a video analytics platform to reduce driving accidents by providing driving forensics and alerts to insurance companies and vehicle fleets.

  • Lenddo, another start-up, uses individuals’ social network patterns to establish creditworthiness and help make real-time underwriting decisions.

With analytics and insights drawing upon new data sources, insurers can explore entirely new opportunities for new products and services.

Building a winning strategy on external data

The playing field for insurers is changing rapidly and may be almost unrecognizable in a few years. External data—combined with industry knowledge, process expertise and sophisticated analytics—will be the basis for success for insurers going forward.

Harnessing external data is a complex undertaking, but insurers can start by developing a comprehensive plan and then undertaking specific, high-return initiatives. This can build momentum and help transform the enterprise into a winning competitor in the new digital arena.