Insurers lag in analytics adoption amidst constrained budgets

2 in 5 said poor data quality was named as the biggest barrier to sound decision-making.

Many insurers still lack a unified view of their own risks and performance, with 38% of senior insurance leaders saying they are not confident their organisation has a comprehensive, real-time picture of risks, revenue and costs. 

The findings come from a Risk.net study sponsored by SAS, which highlights how often insurance decisions are still made in silos.

The report, based on responses from 350 insurance executives worldwide, found that although 85% say their company has a clear strategy, many doubt whether their structure, processes and technology are aligned to support it. 

Poor data quality was named as the biggest barrier to sound decision making (41%), followed by lack of collaboration and unclear ownership, both at 36%.

The study also shows that some critical functions remain less data-driven than others. 

More than 40% of claims decisions rely more on judgement than detailed analytics, whilst financial management and regulatory reporting are more advanced, with over 70% of decisions informed by analytics.

Surveyed leaders cited economic uncertainty (55%), regulatory change (41%), technological innovation (35%) and cost pressures (34%) as their biggest challenges. 

Technology and data teams also pointed to budget constraints, with 60% saying limited funding is slowing the adoption of analytics.