In the first part of a two part special, Sabine VanderLinden, head of value propositions at SSP considers the use of big data.
Big data is everywhere. Open up a trade magazine or click onto an insurance website and the concept is laid bare, with commentators discussing its various merits.
Indeed, in the past two decades, the breadth of data available to insurers has grown at a rate which was unfathomable before the turn of the millennium. Back then there was only customer, geospatial and behavioural/transaction data. Now there is much more to contend with.
But, with big data on the agenda since the late 1990s, the discussion is starting to get tiresome. It is the use of the information - and not the boasts of its size - that should be attracting the column inches. The concept of blending information is more important and can help support decision making, reduce fraud and meet compliance requirements.
Recent research, compiled by IT strategy research and advisory firm Novarica, has revealed that geospatial data - the most common type of external data in active use - is still only being utilised by some 29% of insurers.
Big data is not a priority for many insurers because they are getting to grips with the use of traditional analytics and perhaps because of the apparently infinite number of sources and opportunities. Instead insurance firms need to identify where the use of selected sources of available data can help them improve their businesses and reach their goals.
Meanwhile, it seems that consumer attitudes are also changing. According to technology research firm Gartner, by 2020, customers will make the rules on data, and the majority of personal lines cover will be bought on the internet. Against this background a good online customer experience is vital and blending data will be crucial.
While customers like to control the buying process, options - such as other more suitable products and appropriate add-ons - are also important. Blending data from a number of sources - such as click through behaviour and data on previous purchases, combined with information on products, will help improve choice, the customer experience and sales.
In addition, the use of online, social media and mobile data blended with other internal and external data can help deliver new and innovative products faster and improve underwriting decisions.
Successfully combining data can also improve the claims process. In the run up to a surge event, blending weather forecasts, flood plain information and customer data may help insurers to get support services in place to help their customers and prevent or reduce claims.
However, this is not big data, this is using data intelligently. Instead of being overwhelmed by the endless possibilities of big data, insurers must find practical ways to combine the right data to make the biggest impact on their businesses, one project at a time.
It's not the size of the data that matters - it's how it is used.
Sabine VanderLinden, head of value propositions, SSP
#News: The insurance industry is putting forward ideas to make it easier for the financial sector to invest in greener assets, unlocking billions of pounds worth of funds which could help mitigate the impact of #ClimateChange https://t.co/icxnybN0Lp pic.twitter.com/68IovgDTJq— ABI (@BritishInsurers) March 11, 2019
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