The term ‘Big Data’ has been thrown about for a while, but what does it mean and how does it impact commercial insurance?
“Big Data”, in a nutshell, is the collection of structured and unstructured data and it’s implied that people using it can analyse statistics and derive facts that help make better decisions.
What does this mean for brokers and insurers?
Big data can also be seen as ‘big picture’ data. What it will help brokers and insurers to do is move away from siloed information and shift towards a bigger picture view across teams, organisations and then cross-organisations. There is a massive opportunity to shape the experience and products of end customers, and customers now expect this.
Customers take experiences from their personal lives, Netflix is a good example of this, and expect businesses to join the dots for them much like Netflix does in the ‘recommended for you’ algorithms.
The point is…. Businesses need to utilise their data to the max in a world where the B2C experience is increasingly expected in a B2B world.
The different types of data out there are vast; risk data, renewals, cancelations, anonymised personal information, emerging niches, customer loyalty. Small pieces of the big picture which on their own, might show flat patterns but embraced correctly, the big picture becomes full market trends.
Where does this take the industry? How does it impact the end customer? Are brokers sitting on an untapped goldmine of customer information?
Fundamentally, the impact will be huge for everyone. Joining the dots in data to create a big picture story, of course, helps streamline relationships. One, visible version of the truth derived from fact can’t be disputed. New products can be developed with confidence that they will sell because they reflect changing demands.
With everyone singing from the same hymn sheet, time and effort is massively reduced. We can see this, for example, with our broker and insurer partners and how they have placed new business.
Look at other industries and what’s happening in commercial insurance, relationships are beginning to move online and in-platform, reducing the stop start process and allowing for targeted communication in a time scale that suits all parties and with greater visibility of and confidence in information. The flow of information makes the flow of business easier.
We’re not talking about changing existing processes or the parties involved, but rather giving the existing framework a more efficient channel through to operate through.
Insurers can start to analyse and get real time data on how, and importantly why, business is being placed as well as how products are used. When trends and specific requests are measured, new niche products can be created and the follow up data analyses ROI, satisfaction and whether it’s fit for purpose.
Easier, Accurate Assessment of Risk
Full analysis of pay outs, customer satisfaction and cover levels can start to build a picture of what policies are effective in the market and what needs to be tweaked to meet client demands.
Are there shortfalls in risks being assessed? Is the opportunity for value-add products to be developed for specific needs?
Or, are these products already there… but require data to help people join the dots on the accurate up-sell. The latter is what we’re seeing most.
These are the tip of the iceberg in what can be achieved. The standout point in Big Data is that it’s not the amount of data you have, it’s what you do with it that is transformational…. And this impacts everyone, regardless of business size.
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