The financial services provider’s report said three quarters of insurers said using data effectively across the organisation is currently a challenge as it is often siloed and in antiquated legacy systems.
The report said insurers had been reluctant to address this issue so far because of the costs and complexity involved in replacing those systems.
“Many seem to be struggling with the scale of IT investment and system redesign that it entails, given that existing systems sometimes don’t even provide a consistent view on what might be considered comparatively basic data points, like number of customers or policies,” said Robin Matthias, associate principal at McKinsey Global Institute.
The report said regulators are, however, demanding that companies grasp the nettle of consolidating IT so that they have appropriate data to assess risk. It added that leading companies will go further and use regulatory-driven technology investment to address inefficiencies and create the data and integration needed to make better business decisions
“There are still huge gains to be had out there, from IT that has already been successfully adopted in other industries,” said Christopher Morgan, senior manager of technology risk at Deloitte.