An increasingly volatile market, aggravated by the climate crisis, global economic shocks, and technological advancements in areas like autonomous vehicles has highlighted the use of data to properly understand, price, and manage risk. Today 40% of insurers are using data to enter new markets, while 43% have modernized and upgraded their risk algorithms. This is according to a new report published today by Capgemini Research Institute titled, “The data-powered insurer: Unlocking the data premium at speed and scale.” “It has become increasingly difficult for traditional insurers to compete with InsurTech companies,” said Seth Rachlin, Global Insurance Industry Leader at Capgemini. “These organizations can only compete by embracing a data-driven approach to win market share, improve key ratios, and generate superior risk intelligence.” “Only 18% of insurance organizations have both the technical capabilities, as well as culture and behaviors to support data-driven programs that derive full value from the growing volume of data,” noted Ramana Bhandaru, Global Financial Services Insights & Data Leader at Capgemini. “These organizations are referred to as ‘Data Masters’ and they are considerably larger than their peers, with most averaging over $20 billion USD in revenue.”
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