Big Data in Insurance Industry: Are they ready?

Big data is a hot topic for insurance industry. Every carrier in this industry is taking about big data such as “What is big data?” or “What does it mean to me?”  What does big data really mean for insurance industry? Big data can provide these carriers to:¹

1. Identifying the right customer for the fight product at the right price at the lowest risk.  

2. Reducing clams cost and revenue leakage by providing efficient means of processing and detecting fraud sooner

3. Speed to “new” market sooner –The new market is not just geographical but also demographical

The figure below represents one of the frameworks using big data:

Lot of companies is struggling for big data investment due to benefits. Costs are easy to estimate. The costs include introduce new software, servers, and training. The difficult thing is to predict the benefits. Stockholders won’t agree to spend million dollars in a so called “big data project” without showing benefits. You cannot easily quantify the new coming revenue from enhancing customer experience or getting better risk management. These companies even may have higher priority for other project in funding competition.  That’s why most of the successful cases are from other industries included retail industry or IT companies.  We would like to see some good case study from insurance companies in the nearly future.

References:

1. http://smartdatacollective.com/smartanalytics/78176/big-data-insurance-industry-ready-take-advantage

2. http://www.insurancetech.com/architecture-infrastructure/big-data-not-yet-a-best-practice-in- insu/240151052?pgno=2