Data and analytics are major focuses for many business today, and particularly for insurers. Consider that in Accenture Insurance Technology Vision for 2011, data and analytics were named two of eight critical technology trends for insurers to address over the next three to five years.
But it doesn’t end there. In the course of doing business—from underwriting to claims—insurers are amassing a stockpile of consumer data. And that creates opportunities in Big Data.
Opportunities for insurers in Big Data
According to a recent article in Outlook, the business of data was traditionally limited to market researchers and data specialists—but today, nearly any company with a large customer database can become a player in Big Data.
The Accenture Information Value Pyramid breaks down data into three categories, of increasing value. At the base of the pyramid is raw data, which can be in multiple forms; as such, it isn’t immediately useful. In the middle of the pyramid are insights that result from predictive and descriptive analytics. At the top of the pyramid, the most useful data are transactions, which can drive end-to-end business processes.
Notably, the higher up the pyramid you are, the more differentiated your product and the greater the revenue you can derive.
Differentiation through data
The value of consumer data lies in information scale and scarcity, as well as data management and analytics capabilities. Before launching into Big Data and the information business, insurers should consider three factors:
- Information scale. Quantity does matter, and in the marketplace, having access to a lot of information can be a differentiator.
- Data scarcity. Rare data, or data that is hard to obtain, can also be a differentiator.
- Data blending and analytics. The ability to combine different data sources and apply analytics tools can also be a source of differentiation.
Read more about How Big Data can fuel bigger growth in Outlook, the online journal of high-performance business.