Insurance providers should prioritise investments in technology if they want to drive profitability, according to research from management solutions firm Interim Partners.
The study found that a third of senior insurance executives agreed increased investment in technology would boost productivity. Just over a fifth (21%) felt that investing in new staff and developing new products would help insurers improve profitability - while only 6% felt increasing margins by raising average premiums would help drive up profits.
Ben Johnson, principal of insurance, asset and wealth at Interim Partners, said: “Firms failing to harness the power of new technologies, including big data analytics and social media profiling, could now be putting themselves at a real disadvantage.
“Investment in technology increases efficiency and allows for the analysis of a much wider range of information when it comes to product pricing and strategy.
“Many senior managers now rate it much more highly in terms of impact than traditional routes taken to boost profitability, such as a quick hike in premiums.”
Respondents to the survey emphasised the potential impact of Big Data analytics in underwriting, highlighting the biggest benefits across sectors spanning vehicle insurance (62%), health (24%), life (10%) and home (3%).
The report said that by cross-referencing large data sets with real-time geographic, political and economic information, insurers can better identify hidden trends, patterns and customer preferences.