Marc Koskela Marc Koskela Marketing Director, Marketforce Business Media
The big data rush in insurance

The big data rush in insurance

Big data, unstructured data, high performance analytics. The big buzzwords but unlike some corporate bombast, this discourse signifies deep and transformative change for the insurance industry.

The insurance industry’s profitability is rooted in its ability to analyse data effectively. In that respect, the emergence of big data should only be a good thing. Yet there is a big difference between packaged data collected from credit ratings agencies and claims apps and the shapeless data streaming in from the connected world. Making sense of big data will require new ways of working. 

Therefore, we at Marketforce HQ wanted to understand how underwriters are adjusting to this data-saturated, connected world. In March last year, we surveyed underwriters and members of the Chartered Institute of Loss Adjusters about the data they collect and how underwriters could better exploit this data.

Armed with insights from over 400 respondents, we created our latest report, 'The big data rush: how data analytics can yield underwriting gold' to give insurers the tools and skills to take advantage of the big data rush.

What we found:

  • Loss adjusters are an under-used source of data and insight, particularly real-time data from the site of the claim. New technology offers a way to improve data collection and communication between underwriter and loss adjuster.
  • Telematics and M2M devices are already being deployed by insurers and customers are proving willing to share information in return for rewards. Pitching this offer right could deliver a key competitive edge in risk visibility and pricing accuracy.
  • Underwriting performance will come under increased scrutiny under Solvency II. Improved correlation between risk and premium will allow insurers to have a more accurate view of their risk exposure, reduce minimum capital requirements and boost the bottom line. The result will be a more resilient, more flexible and more profitable organisation. Big data and high-performance analytics will be key to achieving these wins.
  • Data is more powerful when it’s linked with other datasets, allowing underwriters to not only validate existing data but also identify previously unseen patterns and risks. Location intelligence that is third-party assured, fixed and verified can ground disparate streams of data to allow underwriters to make sense of the data rush.
  • Underwriters feel ill-equipped to capture the potential of big data. Working with high-performance data analytics partners can give underwriters the tools to highlight easy deliverables to keep pace with the fast-moving digital world.
  • Underwriters are concerned that they lack the skills to unlock the potential of big data. All industries will face shortages of the highly-specialist data and computer science skills required to deliver high-performance analytics. The insurance industry, however, has a natural advantage and should leverage this by making sure it embeds and nurtures its underwriting talent. Underwriters, after all, can go beyond the wit of machines, applying human experience, creativity and wisdom to turn big data into gold.