Insurance premiums could get cheaper if big data analytics technology is used to create policies based on accurate marketplace insight, according to IT multinational EMC.
“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, is enabling 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 are increasingly drawing 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 is enabling the advanced analysis of rafts of data. This analysis generates insights which 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.”