The vast majority of firms in the life insurance sector have implemented big data analytics into their operations in order to better compete with rivals, it has been found.
Research by LIMRA has revealed nine out of ten firms say they have adopted analytics solutions. And in many cases, the technology is being put to a wide range of uses to support business operations.
Almost half of companies surveyed stated they use big data analytics for six or more functions within their organisation. Common tasks for this include marketing initiatives, sales lead generation, underwriting, claims/fraud detection and prevention, improving sales productivity and product development.
However, a lot of these uses will still be new to many companies, who may have yet to determine exactly how the technology will work for them. While one in three firms that have full-scale operations say their programmes have been in place for more than a decade, two-thirds of life insurance providers have only adopted big data analytics within the last five years.
Norah Denley, senior research analyst at LIMRA Technology Research, said: "While most companies are exploring big data analytics programs, less than a third feel they are ahead of their competition in this field. LIMRA believes as companies innovate and find ways to use new technologies to improve business results, there will be differentiation within the market."
The study also found several different business models are emerging as firms get to grips with the technology. A quarter of companies have adopted a solution that sees their big data programme run by specific business units, while 20 per cent are business-unit led, but with corporate support.
Slightly more than one in ten maintain a fully-centralised big data solutions, while 26 per cent of firms have set up centres of excellence for their programmes.
LIMRA's study also identified some of the most common barriers to the adoption of big data solutions in the life insurance industry. The number one issue raised by respondents was a lack of financial resources, named by 58 per cent of those polled.
Difficulties with getting executive buy-in (50 per cent), accessing data stored in legacy systems (50 per cent) and a lack of knowledge about the technology (37 per cent) are among the other challenges businesses face.