Insurance companies can use data to boost customer retention and acquisition, detect fraud, create a more satisfying customer experience, transform the contact center, find operational efficiencies, create competitive advantage and improve claims operations. It’s the underwriting function, however, that stands to gain the most from increased agility with data. Successfully leveraging big data can make an enormous difference in the underwriting process. Underwriters can use big data to gain insights, inform decisions, drive innovation and improvements, and better understand and assign risk, all leading to greater insurer profitability.
But before they can take advantage of all the opportunities and advantages big data can provide, underwriters first must deal with a host of data-related challenges, especially as data burgeons, growing exponentially, relentlessly and almost unfathomably fast. In fact, according to the 2014 IDC/EMC Digital Universe Study, the amount of data in the digital universe is anticipated to grow from 4.4 trillion gigabytes in 2013 to 44 trillion gigabytes by 2020. Data production will be 44 times greater in 2020 than it was in 2009. And, the study notes, although more than 70 percent of the digital universe is created by the actions of consumers — for example, posting a picture online — enterprises assume responsibility for 85 percent of it, including items like account information and email addresses. IDC also predicts that big data spending will grow to a massive $125 billion this year.
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