Bill Jenkins, managing partner at Agile Insurance Analytics

Carriers continue to pursue and plan for implementation of business intelligence and predictive analytics (as subset of BI) in order to develop the insights from the data they collect to differentiate themselves from the competition through service, products, and price, as well as being able to make better decisions. In this vein, a number of insurance IT solution firms have begun to incorporate operational business intelligence into their products/systems. As such, the ability to obtain business intelligence from core processing systems is becoming "table stakes" for buyers/users of these systems.

This keen interest in business intelligence/analytics now has carriers assessing their capabilities to manage and to successfully deliver and use these technologies. These assessments include the aspects of data quality, data management, data governance, needed skill sets, and proper numbers of staff along with aligning the data initiatives with the company strategy and needs( a data strategy aligned with the business strategy).

Surveys have indicated:

• Accenture: 80 percent of companies pursuing use of BI technologies are not achieving the desired results
• Accenture: Over two-thirds of companies acknowledge not having the needed skill sets to manage data and use analytics
• Ventana Research: In 80 percent of the companies surveyed, IT and business do not align.
• MIT survey and analysis done by Thomas Davenport in his book, "Competing on Analytics": Competent use of BI and analytics boost a company's productivity by five to six percent.

Frank Petersmark, CIO Advocate, X By 2

While technologies such as social media, mobility, and cloud based services/virtualization will continue to have mostly positive impacts on the insurance industry in 2013, I think that there are two other technological and process trends that will have a major bearing on the industry, and they're both things that the industry knows well: core systems modernization and data analytics. 

In both cases, many carriers have been working on borrowed time in terms of the functionality, information, and process limitations.  However, with the advent of better core system software choices—including well-integrated suites for policy, claims, and billing—2013 should finally be the year that carriers complete or at least make significant progress in their legacy modernization efforts. Hand in hand with these newer core system platforms is the ability to significantly improve a carrier's information gathering and distribution capabilities, and along with some new software offerings in the advanced analytics and predictive modeling realms, should improve most carrier's bread and butter business processes, and that should lead to improved customer service. 

It has been a long time coming, so long, in fact, that there are some questions as to whether or not modernized core systems represent mere table stakes or real competitive advantage, but in either case the time has come.   

Karen Pauli, research director, insurance, CEB TowerGroup

One of the major questions we keep hearing from insurance executives is: "Where I am going to get individuals with business and analytics skills?" Due to the ramp up in social media and usage- based insurance, combined with the mountain of existing unstructured data, the technology that will be important in 2013 is high performance, visual analytics.

Analytics, in general, is now a staple in the insurance industry so the logical next step is broadly institutionalizing the skills and wrestling the data into consistent insight.  High performance visual analytics allows a business analyst to work in an intuitive visual environment, that doesn't require deep analytics/modeling skills, yet enhances business outcomes. 

This technology delivers in-memory computing power value so that costly analytic and predictive cycle times are eliminated. This is critical given the escalating pace of time-to-decision.  High performance, visual analytics transforms traditional "project-based" analytics into enterprise, innovative thinking and decisioning.

Chad Hersh, partner, Novarica

While social media will continue to thrive as a marketing tool—and in a few rare instances as a sales channel—mobile is rapidly becoming a must-have for P/C in a number of areas, with apps for consumers (claims FNOL, policy view, electronic ID cards, home inventory, etc.) leading the way.

The trail for usage-based insurance continues to be blazed by Progressive with their well-played 30 day free trial of their Snapshot product which both draws in consumers without forcing them to switch while simultaneously allowing Progressive to both price out the bad risks and collect valuable data.

Ellen Carney, senior analyst, Forrester Research

In a word, it's mobile.  Mobile insurance experiences are evolving as fast as new technology gets incorporated into what seems like a near continuous stream of new phones with new features.

But digital insurance teams need to scan the mobile landscape for innovations that can create better consumer or agent experiences, increase efficiency, and reduce costs. And for mobile initiatives to deliver the expected outcomes, digital teams need a vision for 2013 that moves their firms from experimentation to mobile maturity.

Donald Light, director, Americas Property/Casualty Practice

2013 will see a substantial amount of activity in what is sometimes called "The Internet of Things."  This refers to devices that automatically record and transmit various kinds of data to large data repositories. 

Telematics, in the sense of devices on-board various types of motor vehicles, is an example that has been with us for several years. Usage-based insurance is a next generation version of telematics that records a much broader data set (for example, speed while turning, acceleration/braking patterns over time, etc.).  A  critical benefit of usage based insurance is that it can and should provide a feedback loop to vehicle owners/users giving them incentives to improve driver behavior. Think, for example, about the parents of a teenage driver, or the owner of a fleet of delivery trucks.

More broadly sensing/transmitting devices are being increasingly placed in other vehicles (ships, planes, farm and construction equipment), machinery, buildings, and bridges. Sometimes the devices will just tap into already embedded information systems—and work primarily as transmitting devices.  Other times, the devices will record and transmit new types of data (e.g. vibrations on a bridge, or the level of pedestrian traffic in front of a large office building).

Soon devices also will be embedded in people.  Monitoring the blood sugar levels of a diabetic person is an easy example. There also are numerous other serous (and eventually more mundane) medical conditions for which continuous monitoring (and corrective actions) will improve quality of care and outcomes.

From an insurance IT perspective, all this represents significant challenges in terms of acquiring (the communications link); storing, analyzing, and operationalizing insights from very large amounts of both structured and unstructured data. Celent believes that in 2013 many insurance IT groups will begin coming to grips with these challenges.