07 Jan Big Data could transform underwriting
More than many other industries, insurers have to deal with information. How likely is it that an accident will occur? What is the proper amount to pay out if it does? Based on the answers to the previous two questions, what is the appropriate monthly premium to charge the consumer? Because these calculations are iterated across so many people, a small increase in their accuracy could seriously boost revenues.
Despite this, some insurers have been reticent to adopt Big Data principles. However, as its efficacy becomes proven across other industries, companies are taking note. To date, more than two thirds have implemented some sort of analytics program, across a variety of sectors.
Not only does it help them with claims adjustments and underwriting precision, it can also improve their sales and marketing funnels. In short, they can better target potential consumers, and then, once they've retained them as customers, can offer a higher level of service.
Managed IT services that incorporate programs like FileMaker have internal benefits as well. Using real-time personal metrics, underwriters can better manage the risk profile of their companies, and reduce exposure to financial catastrophe. Because they can better build and evaluate models that calculate exposure, the underwriters can see how a particular position affects their overall book. In some cases, this information might lead a business to take a more aggressive stance, which can lead to increased revenues and an opportunity to take advantage of subtle market shifts.
Insurance is a competitive business, and companies that are not taking the possibilities of analytics into account find themselves at a risk for falling behind.