Bringing Big Data to Life: Four Opportunities for Insurers – BCG
Article Synopsis :
Big data and analytics strategies have the potential to transform insurance business models and if implemented correctly, can lead to strong competitive advantage.
In the report “Bringing Big Data to Life: Four Opportunities for Insurers”, the BCG team argue that life insurance companies appear to be taking somewhat of a back seat approach to big data. The report then goes on to highlight how big data and advanced analytics can help life insurers gain access to a great deal of information that consumers might be persuaded to share – if the companies craft the right incentives, add value and create an easy platform for engagement. It also outlines how forward thinking life insurers can profit from big data to power four growth strategies:
- Enhancing Business Processes
- Increasing Market Penetration
- Deepening Customer Relationships
- Underwriting New Risks
The report also highlights that insurers can enhance their ability to generate competitive advantage from the above strategies with the following actions:
- Start with data-intensive business processes that have clear business potential
- Develop proprietary data
- Break down information silos
- Build trust through mutual benefit
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Digital Insurer's CommentsInsurers and in particular, life insurers, need to proactively identify opportunities to derive more value from their data in order to get ahead of the fundamental shifts occurring within the insurance industry.
We believe that insurers must begin to start implementing big data and analytics strategies now to attract and retain customers and to discover new market and/or product opportunities, all of which will have an impact on growth and profitability.
Insurers should start with the low hanging fruit and examine what data is already there that can be used to their advantage, but also consider what new data is required to truly transform the way they do business.
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