BI’s Article search uses Boolean search capabilities. If you are not familiar with these principles, here are some quick tips.

To search specifically for more than one word, put the search term in quotation marks. For example, “workers compensation”. This will limit your search to that combination of words.

To search for a combination of terms, use quotations and the & symbol. For example, “hurricane” & “loss”.

Login Register Subscribe

Big data use can improve how insurers do business

Big data use can improve how insurers do business

The use of big data has the potential to be fundamentally disruptive to many entrenched business practices with insurance companies, experts say.

Insurers able to leverage analytic technologies to make sense of the growing amount of internal and market data available ultimately will gain competitive advantage, according to a recent report released by PricewaterhouseCoopers L.L.P. The report, “The Insurance Industry in 2012,” says insurers using big data can improve their overall performance by facilitating greater pricing accuracy, deeper relationships with customers, and more effective and efficient loss prevention.

PwC predicts the use of big data eventually may transform the commercial insurance business model, as insurers find ways to use these new streams of information to radically alter business processes.

For example, a commercial fleet insurer may use actual data derived from telematic devices implanted in vehicles to underwrite a policy and set rates.

“Carriers may no longer need to compete on price; they instead may be able to assess the risk of individual customers based on their actual behaviors,” according to the report. “Additionally, commercial insurance increasingly will be able to focus on providing customized, flexible products and value-added services that involve working with the clients to proactively avoid or reduce losses and manage risks.”

Yet, this propensity of an insurer to deploy advanced analytics and big data will likely depend on a variety of factors. A recent survey of 86 insurance information technology executives conducted by New York-based insurance consulting and advisory firm Novarica, revealed a split in analytics usage according to the size of the company. Indeed, the report accompanying the survey, “Analytics and Big Data at Insurers: Current State and Expectations,” said smaller insurers face an “analytics gap” relative to their larger rivals.

“Larger property/casualty insurers universally plan to embrace analytics across all financial and risk management areas (as well as most operational areas), while only about half of midsize insurers have similar plans,” according to the Novarica report. “This lack of analytic capability among smaller property/ casualty insurers will intensify the competitive advantage that larger insurers already enjoy in other areas.”