04.08.2015 – Kim Holmes, Global Head of Strategic Analytics, XL Catlin. Big Data is core to business strategy and success; I have no doubt that companies that adopt data driven decisions are more profitable and productive than those which do not. The insurance industry understands that and although as an industry we have always been heavily reliant on data and analytics, we are only just beginning to leverage the full opportunities that big data presents.
When thinking about Big Data it’s crucial to recognise that most Big Data is irrelevant to any one company. The key is to figure out what the relevant data for your organization is and analyze it to gain new insights for your business. But new insights are themselves not the full picture, the true value of big data comes from making decisions based upon the insights.
If decisions don’t change, results don’t change. We have certainly observed this; where we have implemented new analytical tools we are seeing significant decreases in claim frequency.
Big Data is not just a trend. It is here to stay and has the power to transform our entire economy. The most important factor is that we harness it correctly for our needs if we are to stay relevant as an industry as a whole. Insurance is a data driven business and the better the data we have, the better we can understand the complex risks we need to address both now and in the future. In practice big data allows our underwriters to make decisions on risk selection, terms & conditions and pricing.
I firmly believe that the companies that are not embracing the transformation big data presents are running the risk of becoming entirely irrelevant to their customer base – and you don’t have to work in insurance to recognize that’s a risk not worth taking.
Picture: Kim Holmes, Global Head of Strategic Analytics, XL Catlin, took part at Plenary Session “Big Data and the Insurance Industry” yesterday at WRIEC 2015, Munich. (Source: XL Catlin)
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