Innovative vision needed to make Big Data work
While Big Data has no doubt moved beyond the hype across many industries – in our experience, the insurance sector still finds Big Data overwhelming, especially for the veterans in the industry.
While some insurers are sceptical about the value of Big Data, and do not see themselves as having massive amounts of data that can add value to the business on a day-to-day basis, other, typically ‘younger’ insurers are achieving significant competitive advantage from Big Data.
The connected lifestyle
The value of Big Data for insurers lies hidden in various treasure-chests. However, the most evident driver is probably the rise of the ‘connected’ lifestyle that has clients far more demanding of insurers – they want to engage on digital platforms, require immediate response and continuous digital interaction. This connectedness has also given rise to a more informed consumer base, and people are more aware of competitive offerings in this space. Not only do they want better pricing, but they also expect innovative, value-added solutions that appeal and add value to their lifestyle requirements. In this day and age, if an insurer is not able to deliver, the client is more than willing to change service providers. There is almost no insurance brand loyalty anymore.
This client-pull for digital interaction, coupled with the ongoing impact of fraud within the industry has necessitated many insurance firms to focus their efforts on information strategies of digitalisation, as well as more mature security and fraud prevention instead of Big Data strategies.
Digital security
Big Data platforms with sophisticated Big Data Analytics, descriptive; predictive; and prescriptive, can be a strong enabler for servicing clients in a fully digital mode, as well as predicting potential fraud incidents proactively with higher levels of confidence. This is achieved by augmenting Big Data platforms into the current Business Intelligence (BI) architectures, which increases the organisation’s capability to process more diverse kinds of data, translating it into insights for real business value.
Just another tool
Note that Big Data should be approached as an enabler and not as an end-to-end solution or a silver-bullet solution to various business problems. In essence, Big Data technology is to be utilised as another tool in your business and the BI or Analytics toolbox to be pulled out and used when it is deemed the optimum solution for a specific business problem. Big Data technology and its potential uses are so vastly different from traditional analytics tools that the real value from Big Data can only be truly discovered and effectively exploited if the organisation has users that can employ innovative thinking. If users lack the innovative vision, the risk is that the Big Data technology is implemented and deployed to do the same traditional analytics that the users are comfortable with, thereby losing out on the true value offered by the technology.
While many companies are currently embarking on replacing legacy platforms and systems, all the while trying to roll out more innovative solutions in an effort to address the client requirements in this digital age, there does not seem to be sufficient innovative capacity within the organisations to effectively invest in exploring the Big Data value propositions. While for many in this sector these modern-day IT concepts do not resonate easily at a business level and the true skills to interpret and translate Big Data opportunities into business cases are still very rare, those with the skills come at a significant price.
A step forward
Big Data is an opportunity to better manage many market concerns, like fraud, solvency, insurance risk management, and more, while still gaining a competitive advantage and delivering on immediate and future client requirements. Undoubtedly, there is a lot to learn, but the benefits and value that Big Data provides to insurers is just too good to ignore.
