Analyzing available data could improve profit margins
TORONTO, Feb. 25, 2015 /CNW/ - Facing cost pressures and market challenges, Canadian P&C insurers must use data and analytics to increase their profit margins, according to EY's 2015 Canada property-casualty insurance outlook, released today.
"Companies have access to a lot of structured and unstructured data, such as information about customers' lifestyles, online experiences and even driving habits," says Marc-Andre Giguere, EY's National Insurance Leader. "Analyzing this data will require a new approach and significant investments in people, hardware, software and technology. But ignoring analytics will be very detrimental to P&C insurers in 2015 and beyond."
Tailoring services, products and premiums to each customer's specific situation is now an important competitive differentiator based on the ability to identify customer behaviors and personal risk profiles.
Data analytics can also be leveraged to develop strategies to retain high-value customers, employees and brokers, as well as to pinpoint hidden revenue opportunities within the customer base. With the right analytics tools, insurers can identify new growth opportunities while protecting and optimizing bottom-line results.
Besides the traditional sources of data insurers have access to, telematics offers Canadian insurers even more data about their customers. Telematics is the technology of sharing data through telecommunication devices. In cars, telematics allows insurance companies to track and evaluate driving habits. Telematics plays a big role in allowing for usage-based pricing and is a quickly growing trend in Canada.
Most top-tier Canadian insurers have shifted from a 'wait-and-see' mindset to a more aggressive, action-oriented approach. Early results indicate that consumers are increasingly ready to embrace usage-based offerings, and insurers need to make sure they are ready to fill that demand.
"While a huge force on its own, analytics delivers more value when integrated with all facets of operations," adds Giguere. "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."
EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities.
EY is proudly celebrating 150 years in Canada. For more information, please visit ey.com/ca. Follow us on Twitter @EYCanada.
EY refers to the global organization and may refer to one or more of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit ey.com.
SOURCE EY (Ernst & Young)
For further information: Erika Bennett, firstname.lastname@example.org, 403 206 5157; Julie Fournier, email@example.com, 514 874 4308; Sasha Anopina, firstname.lastname@example.org; 416 943 2637