Big Data Not Yet A Best Practice In Insurance
One aspect of big data is the growing volume of third-party data. How are insurers balancing this with management of all the internally generated data?
Conlon: Certainly, third-party data sources are abundant, and new ones are showing up every month, especially now that there is so much big data out there. Regarding internal data, the database technology is better, data warehouses are better, so most compa- nies are in a position to better leverage their internal data.
In the last seven years, more and more information is coming from [sources such as] ISO or LexisNexis as part of the new business or claims process, from claimants or agents. This makes for a more efficient business process. The fact that you can prefill applications means the agent doesn't have to do as much typing, the quality and consistency are better, and carriers are comfortable with the data they are getting from these major data providers. Also, policyholders are willing to share more private information to get discounts.
We think this will continue, partly due to telematics and the increased availability and leveraging of third-party data. More information will be incorporated into the new business process that will enrich the context of whatever that business is.
Are there any best practices around big data, whether within insurance or from other industries, that insurers should consider?
Conlon: There are major industries that have activity around big data, such as retail, other branches of financial services, potentially health insurance (maybe more so on the provider side than the payer side). [Carriers need to] try and bring those concepts and apply them in insurance. One of the best practices we've seen includes having business buy-in, having these projects be business-sponsored.
[Nationwide CMO: 'I Have Double-Digit Million Dollars in IT Projects']
When you create a big data team, the task of leveraging big data and providing them with a high-level scope is critically important, so that they're not floundering and they have a focus that is linked to the business goals of the organization. For example, it could be the scope of increasing revenue (if the goal is growth). Translating those goals into the scope of the big data team is crucially important, so they're not just out there working with large amounts of data.
Just looking at the applications that are interesting, you can envision how they will impact insurance -- for example, activity around customer engagement. In the next 10 years, our behavior will change and companies will be more proactive in terms of marketing, learning what prospects look at on [company] websites and what kinds of activities appear on their social media pages. I can see those applications coming more actively into use in the insurance industry.
Katherine Burger is Editorial Director of Bank Systems & Technology and Insurance & Technology, members of UBM TechWeb's InformationWeek Financial Services. She assumed leadership of Bank Systems & Technology in 2003 and of Insurance & Technology in 1991. In addition to ... View Full Bio
Tweet This