The Role of Big Data in the Changing Insurance Industry

Author: Lindsey Patterson, Freelance Writer and Entrepreneur (Based: United States)

Insurance companies need to adjust their methods for charging for claims in a way that is in line with the current markets. When a company gets hundreds of thousands of records, a system to manage, filter and process those records becomes essential. This is where Big Data comes in. By creating a platform that can quickly analyze large amounts of data, insurance companies can make more effective claims and ensure greater profits.

Better Understanding Industries

There are many organizations that use unstructured data to better understand their industries and trends. In the insurance industry, companies can use programs like Hadoop BI to make better decisions. Unstructured data consists of information on vehicles, drivers, local repair shops and policyholders. This data can be used to more quickly respond to claims, get the best rates for specific repairs, and respond more effectively to customers needs.

The Use of Unstructured Data

Unstructured data includes information on claims, policy descriptions and other data that consists of information longer than three words. These descriptions can help people get a better overview of their company and provide comprehensive data for many issues. Before big data, people had to complete this work manually. Data scientists would be needed to sort through the information and find the best option for their customers and business. Insurance quotes online were not possible since it required a person to review the policy, check reports and render a decision based on the readily available data. Now, insurance rates can include information on the typical cost to repair specific models and the driver’s history. Many times, a credit score is also used to help determine rates.

The Single-Tool Environment

Using a single-tool environment can help simplify the process of applying big data to insurance companies. Text, sensors, video and numbers can be combined and utilized in a single environment to provide you with data in the way that makes the most sense for your situation. You no longer need an expensive data scientist to interpret the data. It’s bad news for data scientists, but good news for companies. It used to be that companies would have a team or data scientists, or one data scientist and an IT staff to carry out analysis. Now, these applications can complete the entire process without outside help.

Image Recognition Capabilities

The ability to use image recognition capabilities drastically cuts down on the time it takes to prepare and process data. Most of the time spent on identifying big data is spent cleaning, modeling and locating the data in the first place. It also has to be modeled and indexed to be useful. Once this process is completed, then the process of analyzing the data can be completed. Image-based data can help map an area where a car accident occurred and find information between the car and its surroundings. This can help to determine information about the scene more quickly and completely.

Car Insurance and Leasing

Telematics and GPS data can be used to help determine information for car insurance and leasing. Agents can use feed images, video and other visual data to get a better view about objects in a scene. This can provide more detailed information and help make better decisions. It’s also possible to search for roadside accidents typical in the area to provide better information about a car insurance claim. Visual analytics software can help highlight information that’s important and relevant. For example, visual analytics software can superimpose dots on an area with the size of the dots correlating to the number of accidents.

Medical Insurance Rates

Big data can also be used to provide personalized medicine. If a patient comes in with a list of medications they are taking, the physician can use the data to identify the best medication for their situation. This can affect the cost of insurance premiums, so when insurance companies need to determine rates for an area, this data can be used. When there is a higher degree of correlation for a particular expensive form of treatment, the insurance company can adjust rates to provide more accurate information.

New Forms of Analytics

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Big Data is useful for sorting through large amounts of information, but a human is still necessary to make final decisions and process that information. By using visual cues that represent hundreds or thousands of pieces of data to make more informed decisions about claims and insurance quotes. The perfect use of big data fuses a combination of human and automated tasks to make better decisions and provide more useful data to agents.

Ultimately, big data is very useful, but you need to be able to make sense of the data for it to serve a purpose. By using big data, agents can better understand how to apply the data in the best way possible and make the best decision.

Disclaimer: This is a guest post. The statements, opinions and data contained in these publications are solely those of the individual authors and contributors and not of iamWire and the editor(s).