Big Data is not a new thing, but definitely a differentiating and an important thing to today’s businesses in gaining competitive advantage. Why is it a differentiating factor — when everyone is using Big Data? Well, the differentiation lies in getting the right information and relevant insights through analysis of huge volumes of data. In digital era, big data plays a much more significant role in every industry than earlier as today’s digital devices, social networks, mobiles, and censors capture innumerous data.
Insurance industry is in a phase of digital revolution replacing the legacy systems and infrastructure to meet the demands of today’s digital consumers. Aiding the insurers in customizing the products and services by providing a 360-degree view of the customer, big data and analytics is the game changer for insurers in the market.
Digitalization must carry forward throughout the supply chain to be consistent and reliable in providing service to the customers. Insurance intermediaries are the major source to get the products to the customers and understanding their needs to convey back to the insurers. Why need an intermediary when an insurer can directly reach out customer and vice versa? Cost is one of the reason for an insurer to go for agents to sell the policies. From customer’s perspective, numerous advantages such as a number of alternatives provided, ease of buying, part payments, and single point of contact are attained by approaching a broker.
For example, Indigo wants to cover its fleet of 500 flights for coverage of INR 1500 crores. In case of no single insurer is ready to cover the total amount of risk, how many insurers does Indigo approach to ensure its fleet? How does Indigo get a better deal (best premium)? These questions need a lot of analysis on premiums, insurers, policies, regulations, etc. which calls for a need of an insurance broker.
Now, with big data coming into the picture, it is beyond just buying/selling a policy on a mobile or a tablet. It is all about playing with the data and gaining relevant insights. Insurance broking is playing a significant role as today’s customers like to have alternatives to choose from causing a threat to the traditional door to door/face to face selling by agents. With digitalization and big data in place, there are days ahead when there is no need for broking companies to perform any brokerage functions, they just need to manage and analyze data.
Want to know about your future premiums? Want a family package travel insurance when you just think of a vacation? Want a specialized insurance quote if you are an artist, football player, guitarist, etc. while traveling or performing? Want insights on your driving skills to reduce the risk and eventually the premiums? Want to know ‘what-if’ claim analysis/recommendations? Want to claim a fire accident in the company before the fire engine arrive? Want multiple claims in a single event? Want to get analysis on re-insuring and alternatives? Yes, all these needs will be addressed by big data analytics by insurance broking companies.
Insurance broking companies must transform digitally at par with all the value chain partners to understand and service the customer needs. Big data analytics play a major role in getting 360-degree insights of the customer, forecasting their needs, providing educational training and assessing their risk parameters to get them best quotes. Big Data will remain to be a major force and will soon become a necessity for companies in this digital era.