The Role of Big Data Analytics in Insurance

Big Data encompasses large amounts of aggregated data that combines structured data models and relational databases with unstructured data, like text and images. Information from sources like radio-frequency identification (RFID) tags, which are in cars, computer equipment, smartphones, and other devices, can serve as a trove of information that can quickly grow into a conglomerate-hence the name “Big Data.” Many companies’ IT infrastructures were not built to anticipate such an amount of information and without a means to access and properly integrate the data, some businesses have since lowered its priority.

Insurance companies stand to gain the most from “Big Data,” as data is one of the most important assets of its industry. With growth posing the biggest challenge, finding a credible analytic solution becomes the biggest hurdle for the Insurance industry to jump. Big Data analytics brings new insights and assists with information on policy holders’ risk classification to reach the optimal rates for their clients and improve client retention. Analytics help to identify consumer behaviors and other expectations with the use of public and social media data to get an understanding of the services that best suit them, while opening up the right avenues to reach new customers.

Analytics plays a key role in advertising to identify consumer behaviors and utilize media real estate to build a well-structured, customer-centric, business plan. Data-driven strategies will help to broaden the perspective of both new and evolving business models. These help to understand aspects of a customer’s current assets, along with their purchasing and investing trends to help businesses develop new products and expand into new markets with insights that will attract and retain the best customers, gaining a competitive advantage among other businesses while ensuring return on investment. Start-ups are already beginning to utilize these technologies to offer customer-centric solutions.

In order to surmount an understanding for trends of markets, products, distribution propensities, and others, looking to big data is the solution that will offer effective management of past, current, and future data. Putting these tools in place to understand your current business model and expand it to include this new data will help your business to thrive in the fast-paced marketplace.