Other parts of this series:
When I introduced the topic of big data in my previous post, I noted insurance chief financial officers (CFOs) are among those who could gain substantially by using data and analytics. Why? Increasingly it is the finance function that takes responsibility for getting and analyzing data, for sharing the resulting insights with other teams throughout the business, including the board, and externally with the market and the supervisors.
Our paper, Exploring Next Generation Financial Services: The Big Data Revolution, describes four ways financial services CFOs can tap into data, benefiting both the firm and themselves. For insurance CFOs in particular, big data holds much promise.
Here we’ll look at two ways CFOs can leverage big data.
First, insurance CFOs can use big data to make better decisions, based on the elaboration and analysis of large amounts of data versus relying on perceptions, judgment or intuition. CFOs now have the opportunity to use insights generated from data to make decisions with the aim of improving revenue growth, managing capital allocation and liquidity, strengthening investment management and driving cost reductions.
Bringing together both structured and unstructured data to build predictive analytics within all business segments, operating entities and asset portfolio, we expect insurance CFOs to gain faster, more direct insights with a robust process for managing big data.
This access to better insights can be used to make better choices, based on the data.
This brings us to the second gain for CFOs. With reliable insights at their fingertips, insurance CFOs are better positioned to become strategic to their businesses. Having data at the ready also positions the CFO to shift from a monitoring and control role, focused mostly on budgeting, forecasting and performance monitoring, to a more strategic, proactive role. Sound data equips them to become real partners, providing inputs, guidance and analysis for identifying and developing new business opportunities and making investment choices.
With the right data and supporting tools, an insurance CFO can gain a greater view and understanding into the way the business functions and a fresh perspective on where to take the business. The use of big data is about differentiating and profiling clients and policyholders to uncover opportunities, not aggregating, averaging and dissimulating.
With data, insurance CFOs can become full strategic partners, guiding the business based on sound, well-vetted insights and knowledge generated by big data.
See my next post to learn how insurance CFOs can benefit from tapping in to big data.