“Big data” – which admittedly means many things to many people – is no longer confined to the realm of technology. Today, it is a business imperative. In addition to providing solutions to insurance companies’ long-standing business challenges, big data solutions offer the power to transform processes, organizations and entire industries.
Big data is especially promising and differentiating for insurance companies. With no physical products to manufacture, data is arguably one of their most important assets. Financial, actuarial, claims, risk, consumer, producer/wholesaler and many other types of data form the basis for virtually every decision an insurer makes. And while the industry has made progress in capturing and analyzing much of the structured information associated with their products and policyholders, there is value in unstructured and semi-structured information that remains untapped.
At the same time, the industry is undergoing a significant transformation as insurers work to sell to continually more demanding and empowered consumers who have real-time access to more diverse and instant insurance services than ever before. To compete and win in this dynamic environment, insurers must leverage and optimize the value of big data.
Our latest big data study found that 74 percent of insurance companies surveyed report that the use of information (including big data) and analytics is creating a competitive advantage for their organizations, compared with 63 percent of cross-industry respondents. Compared to 35 percent of insurance companies that reported an advantage in IBM's 2010 New Intelligent Enterprise Global Executive Study and Research Collaboration, this represents a staggering 111 percent increase in just two years.
It is increasingly clear that insurance companies must leverage their information assets to gain a comprehensive understanding of markets, customers, products, distribution channels, regulations, competitors, employees and more. Insurance companies will realize value by effectively managing and analyzing the rapidly increasing volume, velocity and variety of new and existing data. By putting the right skills and tools in place to better understand their operations, customers and new markets, insurance organizations will be on the right track to compete and thrive in this global, dynamic marketplace.
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