Insurers are increasingly investing in big data solutions in order to improve product modelling, underwriting and marketing, according to Novarica.
The analyst did say, however, that most insurers are yet to take advantage of these solutions or realise the real business benefit. It claimed the industry should learn from other sectors where there are numerous success stories in regards to using big data to improve marketing, distribution, product design and risk assessment.
Martina Conlon, principal at Novarica, said: “Our research has shown that big data can deliver business benefit in insurance, but many insurers have not started to use big data in a significant way. The published case studies are limited, and insurers that are winning with big data aren’t talking about it in any detail – protecting their investment and keeping the insights they have gained close to their chest.
“I found that big data lessons can be learned from other industries: Insurers have the opportunity to use big data to develop more appealing products like Netflix did. Zest Finance uses big data in targeting and pre-underwriting prospective borrowers, while Target knows more about consumers than most of us would like them to – but use this in very targeted and effective marketing campaigns.”
The analyst added that internal data is now more accessible than ever, and third party data is also readily available for acquisition and purchase.