Insurance Premiums Set to Fall as Big Data Disrupts Market – EMC
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Pictured: Jason Ward, EMC’s country manager in Ireland
According to IT multinational EMC, insurance premiums could get cheaper if big data analytics technology is used to create policies based on accurate marketplace insight.
“Insurers are realising that by analysing huge amounts of information in real-time, they can more efficiently price policies and detect fraud,’ said Jason Ward, EMC’s director for Ireland, Scotland, and UK North.
“This shift, fuelled by big data and high-performance analytics, enables insurers to select profitable business, implement precise pricing, manage risk, improve fraud detection, and drive revenues.”
Big data analytics requires strong alignment between business and IT, creating powerful new capabilities that can transform the bottom line.
“Big data analytics has applications in all sectors – but insurance is a particularly data-driven business model. Insurers employ actuaries to analyse the financial impact of risk. They rely on maths, statistics, and financial theory to calculate probabilities and develop measures to minimise risk. Now, with big data, actuaries have faster and easier access to deeper pools of data,” continued Ward.
Insurers increasingly draw insights from social networks, market surveys, sales demographics, customer claims, and lifestyle patterns to more accurately identify marketplace trends.
“The technology is now there to capture, analyse and visualise this information in real-time, uncovering patterns and trends in large data sets that would otherwise remain hidden,” he added.
“That knowledge can then be used to match customers with products at low risk and reduce claims costs and revenue leakage by detecting fraud sooner.”
Ward also believes that the growing alignment between IT and business is causing a fundamental disruption in the enterprise and public policy environments.
“Whether in banking or insurance, healthcare or policing, new technology enables the advanced analysis of rafts of data. This analysis generates insights that can be used to tailor organisations’ responses to everything from humanitarian crises to high-street sales slumps. If we understand the application of big data analytics across the economy, and invest now to help realise its potential, Ireland could become a global hub for this emerging area.”
Update: In 2013 and the years following, there were various reports regarding car insurance premiums, in particular, rising in Ireland. This was attributed to factors such as an increase in claims, changes in regulation, and issues related to the solvency of certain insurers. While Big Data and improved analytics may have brought efficiencies and more targeted pricing to the industry, it’s overly simplistic to expect that this alone would result in across-the-board premium decreases.
Thus, while Big Data brought about some changes and disruptions, examining the broader context and multiple variables affecting insurance premiums in any particular market or time frame is crucial.
Speaking of falls, did you hear the big one Hank Williams Jr. took off a mountain in Montana in the States?
About EMC
EMC Corporation, often referred to simply as EMC, is a global leader in information infrastructure solutions. Founded in 1979, the company has expanded its reach worldwide. In Ireland, EMC has established a significant presence since the late 1980s, playing a pivotal role in the country’s technology and business landscape. From its operations in Cork and Dublin, EMC Ireland focuses on research, customer service, and advanced manufacturing, reinforcing Ireland’s reputation as a tech hub in Europe. With an emphasis on innovation and sustainability, EMC Ireland has consistently contributed to the growth and dynamism of the Irish tech sector.