Big data has a bigger future

Big data has a bigger future

Big data has a bigger future
Major insurance companies in the UK and beyond are no longer just window shopping when it comes to big data – they are ready to buy.

According to research by Teradata in March this year, 82% of UK insurance companies with a turnover surpassing £500m are prioritising big data strategies during 2016.

However, while the big boys have jumped on board, it seems the smaller the company the less willingness there is to take the leap into big data.

The same survey polled 42 respondents from companies with a turnover of £50m– £500m, against 22 companies with a turnover of £500m or more. Among the former group, the number prioritising big data fell dramatically – to a minority of 46%. So if the smaller the insurer the lower the interest in big data, can we assume that retail brokers, with lower premium volumes in general, have a passive attitude towards big data? If they do, that is a mistake, says David Umbers, CEO of Ascent Underwriting.

“Brokers have not been great innovators and adopters of technology – but the use of big data and the technology platforms that surround this will provide enormous efficiencies as well as create better margins for brokers and their clients, breaking down a somewhat antiquated and bloated process,” he says. Changing times Big data benefi ts customer, broker and insurer alike as it allows for more accurate assessment of insurance risks; this is the fundamental use of big data in insurance terms.

Read Also:
2017 Will See Strong Focus on Machine Learning, Data Consolidation

Thanks to advanced analytical procedures it has become possible to make sense of vast amounts of digital information. Statistical and predictive modelling can work out what will happen in the future by understanding and measuring as much as possible from the past. Models then make predictions while measuring variables from the data collected.

The result, for the insurance industry, is a host of potential benefi ts, including: Car insurance: With price comparison services ramping up competition for consumers, the need to accurately assess risk, particularly among younger drivers, is stronger than ever.

Telematics-based packages allow an insurer to make accurate assessments of the likelihood of an accident based on comparing behavioural data across thousands of drivers.  Aviva Drive, for example, is an app that monitors driving habits and measures accelerating, braking and cornering. The data is factored into the premium, and safer drivers are being rewarded with cheaper premiums.

Health and life insurance: Wearable technology, including the Fitbit and the Apple Watch, offers new ways to monitor people’s habits and make assessments of their lifestyle. Research by Accenture in the US showed that one third of insurers are already using information from these devices, rewarding healthy behaviour with lower premiums. Home insurance: Smart home-tech is seeping its way into home insurance too.

Read Also:
A modern-day Renaissance: APIs fuel a cultural shift in businesses

In the US, providers American Family Insurance and Liberty Mutual Insurance have formed a partnership with Nest Labs to o er its smoke alarms and carbon dioxide monitors to their customers. As part of the deal, customers are able to enjoy reductions on their premiums as the insurers receive data from the devices. Each insurance sector has the potential to benefit from the arrival of big data.

According to Susan Penwarden, chief underwriting officer, commercial lines, at Aviva, this benefit can make insurance a more appealing and fairer proposition for customers too.

“Big data provides the opportunity to change the level of potential insights and understanding that we can have regarding the customers and exposures we insure,” she says. “This allows us to offer more tailored insurance solutions and potentially more accurate pricing.

Read Full Story…

Leave a Reply

Your email address will not be published. Required fields are marked *