This is a great article written by a colleague of mine about the effects big data is having on the insurance industry. With something as personal as insurance, customers want to feel that they are getting coverage that has been custom made specifically for their needs. No one wants to feel like they are over paying for a plan that they have been lumped into with complete strangers. See how big data is allowing insurance companies to treat their customers more individually and create coverage plans to fit any lifestyle!
Big Data in the Insurance Industry
Virtually every industry has found a way to put Big Data and data analytics to use. What are the industries that are utilizing the benefits of the data revolution? Education, manufacturing, retail, healthcare, telecommunications, and more. Really there is not an industry that can’t benefit from analytics.
Today, we will be talking about analytics in the insurance industry. Technology in this industry is booming. So what areas are being impacted the most?
Personalization
Similarly to many other industries, real-time data leads to a more personalized customer experience. Customers are more likely to feel as though they are being fairly treated and assessed, as individuals. They are no longer at the mercy of generalizations. This provides a more positive experience for them, making them more likely to remain loyal customers.
This also provides a more accurate risk assessment for the insurance companies. They, too are no longer at the mercy of generalizations.
Underwriting
Underwriters are also no longer at the mercy of generalizations. Through real-time data mining, they can better evaluate an individual, to match him or her with the best policy. They can also provide more accurate pricing based on the data assessments.
Fraud Risk
Unfortunately, fraudulent claims are rather common. But data mining and predictive analytics are starting to change that. Not only can they better evaluate the initial risk of fraud, but after a claim is made, they can track digital and social channels for evidence of fraudulent behavior.
Reducing Cancelation
Similarly to many other industries, advanced analytics greatly improve customer retention. In the insurance world, they leverage data to identify risk of impending cancellations. This way that can take preventative measures, and address unhappy customers.
They can even seek out more loyal consumers. Insurance companies are using predictive analytics to help them choose long-term clients. Because everyone knows that retaining customers is cheaper than getting new ones.
Relationships With Customers
This has clearly been brought up over and over again. And its an area where every single business or organization can improve; data analytics are the most effective way to improve customer experiences.
The insights from data analytics can be used to identify lifestyles, customer preferences, and characteristics. If employees that interact with customers have access to this data, then they can act on this. The data allows them to truly get to know the customers. By identifying with the customers, they are more interested in providing a positive experience for them. Simultaneously the customer really appreciates the personalized experience.
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