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Insurance companies tap big data for better information about customers

Paul Newman Archive

Big data is attractive to companies because it removes a lot of the guesswork, which is perhaps why insurance firms are interested in it. In the future, businesses may have vast amounts of information in their systems that can help agents make smarter decisions about prospects and customers in real time, if they have data quality measures in place and tools like address management platforms at their disposal. 

With these verification programs, car insurance companies can make more informed assessments about risks associated with clients according to International Data Corporation (IDC) News Service. The source highlights a program by Progressive called Snapshot. Customers who sign up are asked to plug a device into their vehicles that monitors driving habits, such as slamming on the brakes or operating cars between the hours of midnight and 4 a.m. 

With this information, insurance companies might be able to identify which customers are associated with more or less risk and adjust rates accordingly. However, if the content is not accurate because it was entered into databases incorrectly or based on incongruous calibrations, companies risk making the wrong choices. 

In a world that is dominated by always-on consumers who have embraced personalized service, insurance firms can't afford to misquote packages or expect to negotiate rates in person, reports Insurance Networking News. Today's customers are fickle and are willing to switch plans if their company can't deliver the services they want when they want them.