Big Data, BI Tools and the Rebirth of the Insurance Industry

Featured article by Jeremy Sutter, Independent Technology Writer

Insurance is an industry already drowning in data. Some large insurance companies struggle to manage their in-house data as is, upgrading their internal data management systems every few years in hopes of finally getting it all under control. It might seem like they would be the last industry to welcome the era of big data, but think again. Just the opposite is true.

The era of big data offers new Business Intelligence (BI) tools like Tableau on Hadoop to help manage their existing data sets. It also offers tools for capturing and successfully processing new data that offers lucrative insights, such as who their real customers are. This can help the insurance industry perform a variety of important tasks, such as better matching people to existing products, creating new products and screening for fraud. One potential use is in customizing the online insurance quotes process to more accurately determine what kind of coverage an individual needs.

Although there is a danger of being too controlling and becoming Big Brother, there is too much upside for the insurance industry to simply abandon the approaches offered by the use of BI tools and big data. Instead, appropriate limits on the uses of the tools will have to co-evolve with their use. These are disruptive technologies that create a new landscape for both insurance companies and people seeking insurance products. This means it will take time to fully understand the pros and cons and place reasonable and needed limitations on them.

A very clear case can be made for the benefits of BI tools and big data use in the insurance industry by looking at what happens when large scale disaster hits. At such times, an insurance company can become swamped with not only claims, but also inquiries from countless scared claimants who all are having a crisis and just want to know the insurance company really is there for them when they need it. It is a situation where an insurance company and its customers can both benefit tremendously from the use of BI tools. It can allow a company to give each and every customer the prompt attention they need and expect at such times, thus curtailing the tendency for such situations to snowball into a business crisis at the company.

These are situations where claimants need to know the status of their claim. They need to at least know that their claim was received. When so many people are in crisis, under old methods of handling claims, the company could not handle all claims in a timely manner and could not even promptly reply to all claimants to let them know the status of the claim. This typically results in the same claim being resubmitted multiple times, the call center being inundated with frantic calls trying to find out where things stand, and other knock-off effects that just magnify the problem and further slow down the process of getting through the sudden influx of claims.

Big data and BI tools are a big win in such scenarios, allowing a company to triage claims, keep in touch with large numbers of claimants at the same time, and perform other vital functions that put a stop to this awful positive feedback loop, where the more behind they are, the more behind they get. Historically, it was an unfortunate reality that wide spread disaster events impaired the insurance industry’s ability to keep its promise to be there in time of need for all individuals when so many needed it the most. This is a problem that insurance is making headway against thanks to big data and BI tools.

.The old insurance model is broken. New realities have made that model no longer viable. But new realities are also breathing new life into this industry and opening up possibilities that did not previously exist. It is the end of insurance as we know it, but that does not mean it is the end of insurance. It just means that to survive, insurance needs to go through a process of rebirth. Many companies are happy to do just that and are embracing the new opportunities with arms wide open. Many customers are also seeing that as a good thing.