Big data a must for insurance industry

Petr Havlik, Managing Director for CyberPro Consulting

How to effectively manage big data is something all companies need to be aware of. When it comes to a data-driven business like insurance, it is even more critical to success or failure. Are local insurers adequately prepared for this?

The concept of big data is certainly not a new one. Many companies have been trying to better deal with the sheer amount of raw data they have at their disposal sifting the good from the bad. But to really manage it properly, executives are faced with difficult decisions in identifying the exceptional technologies able to efficiently process large quantities of data within acceptable time frames.

Cynics might argue that big data is just a buzz phrase and ignore it. However, an IBM study has found that 74 percent of insurance companies surveyed report that the use of information and analytics, including big data, is creating a competitive advantage to their organisations.

In South Africa, the rise of the connected lifestyle is resulting in customers who demand more from their insurers. This connectedness has also given rise to more informed consumers who are better aware of competitive offerings than in the past. Not only do they want better pricing but they also expect innovative, value-adds that appeal to their lifestyle requirements. If an insurer is not able to deliver this, then the customer is more than willing to change companies. Insurance brand loyalty is a thing of the past.

This means that insurance companies now compete on multiple levels ranging from premiums, customer services, and claims experience, to brand recognition and product structure, amongst others.

And the foundation to all of this? Quality data.

An insurer needs to implement the kind of IT systems that empower them to make informed decisions based on their customer requirements as well as market trends that will impact them from the short-term through to the long-term.

According to IBM*, insurance companies must leverage their information assets to gain a comprehensive understanding of markets, customers, products, distribution channels, regulations, competitors, employees, and so much more.

Of course, it is not all about just big data. Using Business Intelligence tools that integrate data management and analytics become essential to build the right kind of information needed for making quality business decisions.

Fortunately, South African insurers are willing to adapt. A case in point is the flexibility of solutions available to cater for a range of consumer needs. This could of course not have been developed without getting to grips with big data and testing new solutions. The future is looking promising for those insurance companies that have taken heed of the call to arms and are starting to realise the treasure trove that is their big data.

Source : Cover

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