Insurers and the Big Data driver
According to a BBC report, computer company IBM stated that 2.5 billion gigabytes of data was generated every day in 2012. Adding further gravitas to this are reports that an estimated 90% of the world’s data was generated in the last five years alone.
Given its importance on business strategy, data usage has not abated in the intervening years. Insurers have been major benefactors of this designing products and services that make use of Big Data to drive specific business models.
Identifying new sources
Big Data in the digital world is far richer than traditional historical data sources. This technology drives new insights that can be derived from the masses of information that come from seemingly irrelevant information domains.
Take public sentiment as an example. People share news and individual viewpoints on companies, economies, political parties, and other areas of interest with one another on any number of social networking sites. And while cynics might argue that much of this information contributes to data noise, the reality is that it could provide strong leading indicators of market behaviour. It also determines sentiment much quicker than it could historically be detected.
Monitoring social sentiment and responses to a variety of events or triggers can also provide more insight into true market influencers.
For insurers, this is important. It takes a lot of meetings and engagements with a client to build trust and a good rapport; however it takes a single wrong action to damage this. Research has shown that a satisfied person will tell four to five friends about their joy; on the flip side, a dissatisfied person will tell ten times as many people about their anger.
Data is king
Placing issues of personal privacy aside, the push towards the Internet of Things (IoT) is gaining momentum locally.
It is even extending beyond telemetry in transport and logistics and encompassing the likes of health and fitness, retail, and manufacturing.
Smart devices are creating new data points with information streaming into corporate networks. For investors, this should signify a different approach to their thinking when they evaluate possible candidate entities to invest in.
For the insurance industry, this information is vital. Fraud in the industry is a major issue, and if companies use Big Data smartly, and prepopulate application forms with information that is available from Big Data, certain instances of fraud can be avoided.
There is also a major debate surrounding this. As humans, the majority of us like to brag about our abilities (or lack thereof) to consume alcoholic beverages. We are also social animals and like to post pictures about parties or function we attend. What if a person has an accident coming home from these events? Can an insurer use publicly posted information from social media platforms to reject a claim?
Social influencer
For the sake of the above argument, some may say that the minute something is posted on a social media platform, it becomes public knowledge and is not considered to be private information. So using the Protection of Private Information Act (POPI) won’t be an option.
This also introduces a new thought. If a person knows that insurers are monitoring their social media feeds, will they be reluctant to post information about what a good time they had at a party?
Editor’s Thoughts:
Big Data brings both positive and negative change to the insurance industry. Mining data provides key insights to clients and their lives, but is monitoring Big Data forcing people to change their social behaviour? Is this a good or a bad thing? Please comment below, interact with us on Twitter at @fanews_online or email me your thoughts [email protected].
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