Insurers will benefit extensively from data analytics if they expand its application to understanding new risk profiles, new research finds.

A Swiss Re Sigma report says insurers are trialling data analytics in claims analysis and underwriting, or customer behavioural analysis. Most insurers are using it in “narrow use cases that can be operationalised quickly so that value add is easier to demonstrate”.

But the real potential of data analytics is through facilitating the understanding of new risk pools, it says.

“Insurers with access to analytical expertise can build detailed risk evaluation models. This is of particular value when moving into markets where they lack underwriting expertise,” the report says.

In cyber, for example, insurers are leveraging data analytics to construct risk profiles in the absence of historical data.

Building a business case for analytics projects is not obvious, and it may take six to 12 months for a rapid deployment of data analytics, with three to five years before there is any impact on the bottom line.

See ANALYSIS.