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Insurance companies looking to reduce risks through big data plans

Rachel Wheeler Archive
Big data has been touted as an all-around solution that can help companies strike while the iron is hot, or even sooner - while it is still heating up - in order to gain an edge on the competition. This is because decision makers can harness the vast amount of content consumers are creating every time they make purchases, post on social media sites and visit companies' web pages.

Insurance agencies can benefit from detailed customer data
Insurance companies want to reduce risks and go beyond reacting to incidents in order to anticipate them, according to Smart Data Collective. Using new content-capturing capabilities, analytics tools and data quality controls, companies can tap into information they never had access to before. For example, they can learn whether individuals are maintaining their vehicles properly by harnessing information about oil change patterns, services performed at auto body shops, and GPS data showing when and where policyholders are driving.

Businesses in the insurance industry can also collect information from customers' participation in auto safety clubs and access police records and new incident reports, explains the source. Ultimately, compiling this data can help decision makers analyze risks more efficiently, thus saving time and money through anticipatory actions.

This is why insurance agencies like American International Group (AIG) are investing heavily in big data plans, according to The Wall Street Journal.

"There's no lack of data around us, but there is a lack of clarity around what questions to ask and why that matters," Murli Buluswar, chief science officer of AIG's property-casualty operation, told the media outlet. "With all this data that is being transmitted and created every day, the winners … will be firms that can understand that information and connect it to problems they are trying to solve."

Challenges lie in wait for those eager to tackle big data
In order to realize these benefits, insurance brokers will need to do more than invest. Simply building the structures doesn't guarantee companies will recognize the benefits they set out to achieve. Rather, they will face challenges when it comes to choosing the right solutions to suit their goals, finding a storage system large enough to house the data, modernizing business operations by breaking down traditional departments and upholding data quality standards. When they take the correct steps from the get-go, companies can find that needle in the haystack that will enable them to enhance performance significantly.