Asking the right questions:
A methodology for successful analytic projects In the last few years, a range of
Powerful market forces and competitive imperatives have driven insurers across
The industry to embrace advanced analytics. There is broad consensus that carriers need to Adopt and expand analytics programs to improve insight into the business and decision
Making in everything from product design, marketing and distribution, to
Underwriting and claims. However, many insurance analytics projects have failed to produce Expected results. These failures are not the result
Of underinvestment in technology or a lack of effort. More likely, insurers
Deploying analytics struggle with a few common challenges:
• Resistance by end users reduces adoption and utilization of new tools.
• Current operating demands lessen the ability to make significant changes.
• Project focus is limited to data capture and model design rather than decisionmaking
processes.
• There is a lack of buy-in from stakeholders, due to overly complex models disconnected from actual business processes.
• Business impact of analytics projects is difficult to measure.
• Experience gained from one-off projects is not leveraged for use in subsequent efforts.
Given that developing meaningful analytic capabilities could require significant investment, Insurers are rightly concerned about maximizing return on their investments. One
Underappreciated driver of project success is a coordinated and comprehensive methodology to
Developing advanced analytics. Such an approach incorporates elements of
Strategic planning, technical design, project management and organizational
Change management. This methodology is designed to capture the knowledge
And techniques generated by each analytics project to build the
Organization’s analytic capabilities. Those insurers that execute successful
Analytics projects are likely to
Have addressed their key strategic, operational and technical issues by
Asking the right questions at the right time. These questions are applicable
Across the four phases of an analytics project, prepare, design, implement and
Monitor. The key questions are: Prepare
1. Are we ready for advanced analytics?
2. What is possible?
3. What operating assumptions are holding us back?
4. How do analytics help us win? Design
5. Do we have the data we need?
6. What’s the right technical math to analyze the problem?
7. What’s the best business math for decisioning purposes? Implement
8. How do we generate buy-in and “commercialize” the analytics?
9. How do we orchestrate an effective rollout? Monitor
10. How we do measure and define success?
11. What can we learn from our successes and failures?
These questions should be raised as soon as insurers begin to consider
their analytics options. However, it is likely that they will need to be asked
repeatedly, across every phase of the project life cycle. There are critical
feedback loops — for example between the prepare and the implement phases.
Success in advanced analytics calls for a holistic approach because it
represents more than just a technology implementation; in fact, it speaks to
how insurance leaders manage their businesses more effectively.
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