Big Data-Beyond Experimentation to Innovation – SMA
Article Synopsis :
It is no secret that insurers are increasingly seeking greater insight into customers’ behaviours and sentiments. Insurers have been using various analytical techniques in the past and the not so new buzz word in analytics is “Big Data”. Big data is seen to be the key to innovation and has great potential for value creation in the form of product pricing accuracy, customer-centricity and fraud prevention.
In the ISO and SAS sponsored white paper “Big Data in Insurance: Beyond Experimentation to Innovation”, SMA presents a synopsis of opportunities and challenges related to big data based on a ‘Big Data in Insurance’ survey of 75 insurers from property/casualty and life/annuity companies in North America. The white paper identifies four business areas where insurers can implement big data analytics for competitive advantage:
- Customer Acquisition: New Insights for Marketing and Distribution
- Risk Planning and Evaluation: New Insights for Actuarial, Product Management, and Underwriting
- Customer Service: New Insights for Policy Service, Billing, and Claims
- Enterprise Services: New Insights for Vital Internal Functions
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Digital Insurer's CommentsWhile big data has the potential to yield extremely powerful results, it also presents key challenges with respect to costs and the amount of data to deal with. Another key limitation in exploiting big data is a lack of knowledge and shortage of skilled professionals. Having said that, insurers who are able to leverage analytic technologies to obtain better insight from both structured and unstructured data will ultimately gain competitive advantage.
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