Big data, unstructured data, high performance analytics. These are the big buzzwords in the financial services sector but unlike some corporate bombast, this discourse signifies deep and transformative change.
The challenge for insurers is to recognise how this change can be put to work to improve business performance. Those insurance companies unable to harness the power of big data will become increasingly uncompetitive as rivals gain an edge in product design, pricing accuracy and risk management.
We wanted to understand how underwriters are adjusting to the data-saturated connected world. In March 2013, Ordnance Survey and the Chartered Insurance Institute (CII) surveyed 242 underwriters from across the industry. At the same time, we asked 220 members of the Chartered Institute of Loss Adjusters about the data they collect and how underwriters could better exploit this data.
Our survey found an industry aware of the transformative power of big data and already grappling with data inflows from machine-to-machine devices, GPS-enabled devices and social media postings. As data increases in volume and variety, underwriters are using location intelligence to make sense of the maelstrom.
Yet this is also an industry anxious about its readiness to handle big data, with concerns about its systems, skills and investment. Many Insurers are battling with legacy systems and need to harness the value of their internal unstructured data before even looking at new external data sources. While the industry does have inherent analytical and data handling skills through the very nature of risk assessment and innovative marketing however, those insurers that fail to address these concerns will find themselves on the wrong side of the big data revolution.
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