Data equals opportunity — but only when properly collected, skillfully analyzed, and insightfully deployed. Over the past decade, the amount of available data has exploded, while innovations in analytics have brought new ways to gain strategic advantages.
And yet, the pace of change leaves many companies grappling with how to best use that wealth of information.
Organizations that are unable to harness their company’s data are missing opportunities. Consider that to “improve the use of data and analytics” was the most frequently cited means by which organizations hope to improve their risk management capabilities this year, according to the 2019 Excellence in Risk Management survey.
“It’s all about data to prepare for the future, and risk management is really no different,” the risk manager for a privately owned conglomerate said during an Excellence focus group discussion.
The Excellence survey has long asked about risk management priorities. In 2013 we first added “improve the use of data and analytics” as a choice, and risk professionals immediately made it their top priority.
In 2019 it was still on top, and by a wider margin. Asked which aspects of data and analytics most needed improvement, “informing decisions on specific risks” took the top spot.
As a risk executive from a life insurance company said, “We are constantly under pressure to see around the corner.”
Organizations also saw “optimizing insurance and other risk transfer programs” as a priority for data use. It’s here that they can make a connection between modeling and the strategic opportunities presented by alternative risk transfer (ART) solutions.
Interest in these products is increasing, but the uptake is slow, representing untapped opportunities for some.
Not every risk executive approaches data with business strategy in mind, as shown by a split between C-suite and risk professional responses.
The C-suite’s top choices were tied between using data and analytics to inform specific risks and to inform the overall business strategy. Yet among risk professionals, less than one third cited the use of data to inform business strategy as a priority.
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For further information, please contact Brian Elowe, Chief Client Officer at Marsh on 617 416 9835.