Since the emergence of human civilization until 2003, the human race has generated a total of 5 exabytes (5 billion gigabytes) of data. Now, with the explosion of data through a variety of digital sources, we are producing 5 exabytes every two days and while you are reading this, the rate is accelerating!
The biggest challenge for the insurance industry is to make sense of the ocean of structured, semi – structured and unstructured historical data available today related to regulations, policies, customers, claims, partners and the market and transforming this under-utilized data into a valuable asset for the insurer.
Insurance analytics has introduced new opportunities for the insurers to analyze the past in a better way, be in command of the present and confidently embrace better opportunities in the future by finding ways to use these new streams of information to radically amend business processes and gain diamond-like insights out of the mountains of coal.
Moreover, the data generated from the continuous flow of interactions through various data sources and emerging platforms like social media influences the customer perception about the insurer’s brand, products and services offered. Finding value out of this exponential amount of unstructured data is a tremendous challenge and Big Data Analytics is one way of facing it boldly and optimally. It can devise sophisticated reserving models and bring in novel approaches in operations and processes. It can be used for designing unique pricing and marketing strategies for attracting new customers and retaining the existing customers.
It is also helping insurance companies to personalize their products, services and customer interactions. Advanced models in Big data analytics are revamping and evolving the insurance industry by offering such diverse capabilities which helps insurers to gain valuable insights about their customers, introduce new ideas for better decision-making, improved business performance, deepened market penetration and thus create a definitive competitive edge.