Predictive analytics use among insurers still small, but growing: survey

Insurers are at least beginning to explore using predictive analytics in their claim operations, but few have actually yet applied it to their businesses, according to recent survey results from Towers Watson.

The September 2012 Claim Best Practice Innovations and Measuring their Impact, surveyd 41 chief claim officers (CCOs) between June 5 and July 9 at various sizes of insurance businesses.

According to the study, 63% of respondents are at least starting to use predictive analytics. Among large carriers, 75% are beginning to explore predictive analytics use, and 58% of small and midsize carriers are as well, the survey results suggest.

However, only 17% of total respondents have been using predictive analytics for more than one year.

All carriers clearly see best practices as crucial documents, but for different reasons, Towers Watson suggests. Smaller businesses view investing in best practices and technology as a way to improve operational efficiency, while larger carriers see them more as a tool for bottom line results, likely because of responsibility to investors.

Insurers are also regularly reviewing their best practices, with nearly a quarter of respondents making major modifications within the last six months. Over the past year, 56% had made changes.

Towers Watson notes, however, that systems could take a more integrated approach for better customer service and financial results. The company has included this most recent CCO survey on its website.