Business intelligence projects can come into play across most of the functional areas of an organization, according to Steve Callahan, practice director for Robert E. Nolan Co. Today, BI tends to apply to dashboards and executive scorecards, but Callahan believes the industry is shifting to more predictive analytics, the next generation of BI, which he feels gives organizations the opportunity for competitive differentiation.

"I loom at analytics almost as a cube with three dimensions," says Callahan. "One dimension is the type of analytics—it can be trends, ratio comparisons, scenario models, simulations, sensitivity analysis. The second dimension would be the functional area it's applied against—agent effectiveness arena, market profiling, product performance, underwriting risk or the most common area, claims. The third dimension is the depth of the data. Here we look at the top level being the scorecards and the dashboards. You start drilling down to greater detail and the detail across variables as opposed to the density around a given variable."

Business intelligence allows insurers to gain a lot of detail around expenses, but Callahan believes if you want to use predictive analytics you have to get detail around the attributes of your customer or the different attributes of the claims environment.