How Big Data is Changing Insurance Forever

Sometime between 2011 and 2014, especially in the insurance industry, the interest in the concept of "Big Data" reached its crescendo and was in an unenviable position, having reached some kind of high plateau of "Big Data Landscape".

This was the period when Big Data became the new "black gold", "oil" or something. After all, how big is Big Data phenomenon in the insurance industry today? Let’s dig in to find out.

Larger P&C (property & casualty), Life and Health insurers are universally embracing Big Data across all financial and risk management areas and most operational areas. And it didn’t happen overnight. Even today, while only about half of midsize insurers have similar plans, this lack of analytic capability among smaller or budding P&C insurers will essentially intensify the competitive advantage that larger insurers already enjoy in other areas.

So, does that mean that the traditional, relational database management technologies are on their way to extinction? Not anytime soon. Instead, insurance companies – awash in unprecedented volume of data – should look forward to benefiting from new technologies such as Big Data (like Hadoop or anything else). It builds a data-driven culture that extends beyond traditional sources, beyond the core policy administration and claims management processing systems.

The Ecosystem is Maturing

According to a recent report on Ernst & Young’s 2015 Global Insurance Outlook, the focus area of international property-casualty and life-annuity insurers capitalizing on data analytics is "technology." Their goal is to strengthen their relationships with customers across all product classifications and geographies, improving their front-end sales for consumers to better shop for insurance products, distribution mechanisms and an enviable competitive differentiation.

Demographic shifts such as stable economic conditions, greater longevity and new competitive challenges are all prompting big changes in the way insurance industry is doing business today. Apart from these factors, however, major shifts have occurred in the areas where the fragmented systems, old data silos, and legacy applications were long been known to be an impediment for insurers.

Thankfully, these old and archaic systems, which are costly to maintain and integrate, are no longer part of their overall Data Management and Monitoring infrastructure. For modern businesses, ultimately, Big Data powers a new type of enterprise infrastructure that handles a high level of complexity of data stemming from omni-channel touch points, available to both internal systems and external channels, whenever required.

For insurance companies, these changes encompass the benefits of using analytical applications known as Big Data creating compelling opportunities for the global insurance industry. Tapping into Big Data stream brings significant benefits in terms of the type of products being sold, marketed and advertised, how costs are reduced, how risk is assessed, and how fraud is detected.

Since data and analytics are providing a wealth of new opportunities for insurance companies today, the quality, consistency, and breadth of the data to increase revenue, control costs, and counter competitive threats have become even more important. Everything needs to be integrated seamlessly and Big Data provides that opportunity.

Finally, leveraging Big Data sets and predictive analytics tools handling the sheer volume, complexity, and types of data, insurance companies can capitalize on what they did not previously know – something that could bring in new streams of revenue for them.

Prime Technology Group, LLC is a global, technology services company with innovation at the core of our business engagements. For more Information visit http://www.PrimeTGI.com