If you take a look at just about any industry, you’ll see that big data is enhancing the way that business is conducted. For example, in the banking industry, financial institutions are using predictive analytics to create a more custom-tailored experience for clients. In the manufacturing industry, big data allows for better product quality and defect tracking.
In an effort to gain control of declining profitability, some insurance carriers are now using data to more accurately underwrite risk. For example, a few insurance carriers are now incentivizing property owners to use smart home devices in exchange for the data that comes from using this technology. This data could reveal that the property owner is not using smart devices such as a security system or hasn’t changed the batteries in the property’s fire alarm system, which increases the risk of loss.
While big data offers many advantages, the property and casualty insurance industry has been slow to adopt the use of advanced analytics. Some of the reasons why the insurance industry has been slower to get on board with big data include concerns about the accuracy of data, analysis paralysis, and segmentation challenges.
The Insurance Industry is Slow to Adopt Advanced Analytics
The property and casualty insurance industry has a huge opportunity to improve performance through the use of big data and advanced analytics, and the carriers that find opportunities to join this revolution will benefit greatly. According to a recent survey of 120 respondents, only 11 percent of respondents feel that insurance carriers are taking full advantage of the benefits of advanced analytics. This leaves a lot of room for insurance carriers to gain a competitive advantage for being one of the first to use big data to its fullest potential.
Two of the great benefits that advanced analytics offers insurance carriers and inspection companies using the data available is more accurate assessment of risk and a reduced timeline to process claims. By taking full advantage of the data available and employing an inspection company carriers also receive the greatest advantage of all by reducing proximity to their customer base. It is not uncommon for Insurance Risk Services to help its partnered carriers increase sales by identifying new opportunities to serve their customers.
While there is a lot of hype about big data and how it can be used to enhance the insurance underwriting process, it’s important to note that data can’t replace the value of an in-person property inspection. Instead, insurance carriers should view data as a way to compliment the property inspection process.
At Insurance Risk Services, we offer a lot of value to our insurance carrier partners by using technology and data to provide accurate underwriting support. When we complete an in-person property inspection, the data that we have in-hand helps us to uncover new opportunities for our insurance carrier partners. By engaging our firm for a property inspection, we can help you firm up the soft market in regards to the use of big data and advanced analytics.
Please contact us at Insurance Risk Services to learn more about how we can help reap the benefits of big data and advanced analytics.