Big Data and Insurance by Graham Newitt, Advisor to The Data Company
Everyone talks about the “Big Data” opportunity for Insurers but is this fantasy or fact?
There are two quite distinct areas when talking about using big data, the first is to help acquire new business and the second is to improve the management of the existing book.
And whilst the use of “big data” is still evolving for Insurers, there have been some successes in using this to drive more accurate product pricing and other areas are being explored, for example, the use of data from wearables for Life and Healthcare Insurers.
Managing the existing book is where life is more problematic. It’s true, Insurers do have enviable amounts of data about their customers. Unfortunately, this is often badly organised and spread across multiple systems making it a little tricky to access in one place, let alone manipulate to draw meaningful conclusions.
However, all is not lost, businesses such as The Data Company have built powerful tools and processes that can help Insurers to extract, aggregate, cleanse and organise their data to get to a single version of the truth.
The new insights this can create will allow these Insurers to:
- Provide a better service to customers
- Identify opportunities to increase customer lifetime value
- Highlight areas of risk or opportunity in the performance of the existing customer book relative to pricing and valuation assumptions
And it’s not just about the existing data. Once organised into a modern data structure, new sources of external data can be added, allowing Insurers to develop a richer understanding of their customers and to start developing predictive analytics about how they might behave.
Imagine being able to access all the data locked up in internal systems, even spreadsheets, and enriching it with data from external sources, all within days.
Then being able to use the combined data to drive actionable insights again within days not months. These actionable insights will help drive areas such as better customer service, customer segmentation & analysis, improved exposure management, pricing, and fraud detection.
Once the new data set is established, it will be much easier to visualise trends in key performance indicators with a series of simple interactive dashboards allowing you to view and then drill down into the detail.
Whilst the jury may still be out for some, being able to aggregate and organise data effectively to draw insights and even automate some processes will increasingly become commonplace over the next few years. If you are interested in more big data solutions in the Insurance Industry, contact us now to see how we can help.