The use of big data has the potential to be fundamentally disruptive to many entrenched business practices with insurance companies, experts say.
Insurers able to leverage analytic technologies to make sense of the growing amount of internal and market data available ultimately will gain competitive advantage, according to a recent report released by PricewaterhouseCoopers L.L.P. The report, “The Insurance Industry in 2012,” says insurers using big data can improve their overall performance by facilitating greater pricing accuracy, deeper relationships with customers, and more effective and efficient loss prevention.
“Carriers may no longer need to compete on price; they instead may be able to assess the risk of individual customers based on their actual behaviors,” according to the report. “Additionally, commercial insurance increasingly will be able to focus on providing customized, flexible products and value-added services that involve working with the clients to proactively avoid or reduce losses and manage risks.”
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