5 ways Big Data is making a splash in the insurance industry
There are conflicting opinions on when the term Big Data really came onto the scene, but it is undeniable that its notoriety has skyrocketed in the past few years. Big Data has become the hot topic buzzword around the Internet, as is made obvious in the Google Trends graph below.
One by one as analytics solutions became more accessible, industries found different ways to leverage the Big Data Revolution to their best advantage in their field. Virtually every industry, from manufacturing and retail to healthcare and education, has found a use for the ever-growing labyrinth of data resources.
The Insurance Industry is no exception in the Big Data Revolution. The Ernst and Young 2015 Global Insurance Outlook claims “technology” is the one word that encompasses the Insurance industry right now. The report states, “Insurers across all regions are capitalizing on data analytics, cloud computing, and modeling techniques to sharpen their market segmentation strategies, reduce claims fraud and strengthen underwriting and risk management.”
Although there are many ways that insurers are utilizing Big Data and data analytics to benefit their bottom line, there are 5 areas being impacted the most.
1. Data for streamlined underwriting
Insurance underwriters are faced with the daily challenge of providing policy recommendations that are both fair to the consumer, as well as protect the best interest of the insurance company. Big Data is changing the future for underwriters as they must adapt to their new roles as data analysts as well as underwriters.
A study by Marketforce, the Chartered Insurance Institute (CII) and the Chartered Institute of Loss Adjusters in conjunction with Ordnance found that most underwriters are taking the evolution of their industry in stride. The study revealed that 9 out of 10 underwriters see the potential in access to real-time claims data to improve pricing accuracy. Real-time data mining is streamlining the underwriting process by providing accurate, current insights that could have taken days to locate and consolidate. With access to quality data sources, underwriters are able to complete processes in less time and with better accuracy. Real-time data facilitates streamlined processes leading to higher placement rates and a much faster underwriting cycle.
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