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US insurers look to advanced analytics benefits

Advanced analytics offer the greatest opportunities for the US insurance industry this year, according to almost one-third of respondents to an AM Best survey.

Increasing use of mobile apps to sell and service insurance, and Big Data were also seen as significant opportunities, each gaining about 18-19% of responses.

However, Silicon Valley-backed insurtech start-ups and increasing use of mobile apps to sell and service insurance were also seen as the greatest threats.

In the regulatory sphere, increasing resources and expenses to comply with changes was named the largest challenge, while upheaval of regulations under President Donald Trump was the least of concerns, gaining only 4.7% of responses.

More than 90% of respondents are not sourcing capital in the alternative market through catastrophe bonds, collateralised reinsurance or sidecars.

Most plan no change to their use of alternative capital, while 10.9% anticipate growth in its use.

The survey also shows “cyber risk” and “cyber security” were the phrases most encountered by insurers last year following publicity over attacks by offenders ranging from individuals to foreign governments.

“Many companies have developed cyber products to protect themselves and their customers from attacks and loss of confidential data,” the report says.

Cyber was nominated by about 30% of respondents, followed by low or negative interest rates, increasing regulation, disruptors and the presidential election.

The survey is based on several-hundred responses across the US life and non-life sectors. Property and casualty insurers account for 63% of respondents.