There is arguably no industry more dependent on historical data and likely trends than motor insurance, but according to new research from PriceWaterhouseCoopers (PwC) they are less likely to have a good implementation of Big Data than just about anyone.
The headline findings of the research are that Big Data will eventually lower insurance premiums as well as optimising the business performance of the insurers themselves.
In fact the emergence of Big Data has sparked interest in data management throughout the insurance industry. PwC believes there are opportunities for drivers and for insurers as more data becomes available for analysis. It should at best offer deep insights into customer behaviour and improve outcomes for insurers and policyholders alike.
Nitin Rakesh, CEO and president of leading digital modernisation and IT services company Syntel, said in the PwC announcement about the research that established insurance companies have vast stores of historical information that give them a distinct advantage over newer competitors.
“The foundation of the insurance industry is accurate risk assessment, and traditional insurers have a wealth of data at their disposal,” said Rakesh. “Their business is heavily data-dependent, and insurers must leverage data more effectively in order to remain competitive and retain customers in the digital age.”
Innovations and technologies that enable technology to contribute to a better insurance experience include pay-as-you drive. This involves vehicle-mounted telematics devices that allow insurers to collect real-time data on actual driving habits. This data then enables insurers to make accurate risk assessments and offer more competitive insurance premium prices, leading to better customer retention (or not, if the driver is going to be a bad risk).
The snag is that the model is data intensive and insurers don’t appear to be there with the analytics technology that would help. Big Data analytics would allow the companies to sift through a lot of real-time data needed to make informed, intelligent decisions.
“An innovative technology partner can help insurers stay ahead of the data overload and unlock hidden patterns and insights within their data to better serve their customers,” said Rakesh.
“Big Data provides insurers with an opportunity to create a competitive edge by collating, extracting and truly understanding customer data so that they can pass on both convenience and cost savings to their customers. Insurers that choose a digital path will reap the rewards, while those that hesitate will find themselves at a serious disadvantage in the new digital marketplace.”