Report says big data adoption in insurance will transform how industry works
A new report has revealed that the adoption of big data in insurance will transform how the industry works.
The growing use and influence of Big Data in the insurance industry all over the world has been chronicled by a recently published report ‘The Rise of Big Data in Insurance’ by Timetric.
Drawing on primary insights from industry leading experts, the report breaks down the potential impact of Big Data between segments such as motor, life and health insurance.
The ability of Big Data to draw new entrants into the insurance industry is also explored. Finally, careful consideration is given to the obstacles to the use of Big Data in insurance. Legacy IT systems act as a constraint on the ability of insurers to harness the data they hold, while regulations around the protection of individuals’ information could also act as a ceiling on the potential uses of Big Data.
The key findings of the report are:
- The adoption of big data in insurance will transform how the industry works, changing it from a reactionary function, focused on covering the costs of poor sub-optimal decision making, to a preventative service helping customers identify risks and improve behavioural trends to cut out avoidable illnesses and injuries that are often the source of claims.
- Incumbent insurers are generally finding progress trickier than nimbler, small companies and start-ups. Large legacy IT systems and, often an inability to tolerate failure, make it harder to innovate, while it is essential for smaller companies to take these risks to standout.
- The large technology firms, such as Google, Facebook and Amazon pose a particularly potent threat due not only to the wealth of data they hold on individuals but also the vast financial resources at their disposal to launch entry into a new industry.
- With the greater quantities of personal information being gathered and harvested by all business segments (including insurance); perhaps the most important factor in the immediate future of big data’s impact is how regulation will respond. The EU Data Protection Reform comes into force in 2018 and has more severe fines for breaches and tighter restrictions on use of individual data.
Source: Company Press Release