Big Data is changing Insurance. Can you change your industry?

By Clive Gold, CTO Marketing, EMC Australia and New Zealand.

Are you a smart IT leader who can transform your industry? Here is an example of one…

I mentioned a couple of weeks ago that I’ve taken up cycling and talked about accidents during the ‘MS Gong’ ride. So I thought I would do the sensible thing and insure my new bike and myself while riding.

I found an interesting insurance company called “Real Insurance” they offer cycling insurance but they also offer consumption based car insurance! The idea is to pay for the km that you travel rather than some generic risk assessment value.  So the insured’s car monitors the km travelled and reports to the company that adjusts the monthly premium. Here they are able to reduce the premium and lower their risk as it’s obvious that the less you drive the lower the risk of an accident. Interesting start!

Next I hit the web and found that international organisations have taken the next step. They are using in-car telemetric data to ‘judge’ the drivers behaviour. For example; what time of day/night are they driving, how fast do they go, how quickly do they accelerate, break, etc. The insurance company now has data about the individual. This fine grain data allows them to move the risk assessment from a ‘generic’ driver behaviour, (probably classified by age and sex), with a large standard deviation, to an assessment of the individual’s actual behaviour.

The thing I realised is that this is a fantastic example of how ‘big data’ is put into operation. Firstly the business of insurance is all about risk! Profitability and competiveness of an insurance company is simply based on its ability to assess and manage risk! Then I’m imagining some smart CIO sat down and thought, “How can I use data to improve our assessment of risk?” and in a blinding moment of inspiration they saw that they could transform the industry by removing the ‘generic’ assumptions of drivers behaviours by metering and monitoring it!

Lastly, I believe that these companies provide a device that plugs into the car to monitor this. So I know my smartphone has the required sensors to do this job, so I’m wondering how long before an insurance company simply has an app you run on your phone that does the same thing?

My question to you, is what is the ‘essence’ of your organisation, and how can today’s ‘Big Data’ improve this?

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One response to “Big Data is changing Insurance. Can you change your industry?

  1. In my opinion bigest oportunity for insurance industry are big data insurance, data center insurance and cloud insurance. It take a little time when companies discover risks of loss datas.

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