Big data calls for a new breed of professional who understands how to find and generate insights, and then be able to sell those insights to the business. It can be a data scientists, but many types of positions, such as data analysts and architects, also are needed.
The insurance industry, of course, is as data-intensive as any industry can get. The challenge is to compete with other industries for scarce and valuable talent that can make big data analytics a business reality.
Consider a study, published earlier this year, which shows that more than nine out of 10 insurers are not yet capable of putting big data to use for the business. The research, conducted by Marketforce, the Chartered Insurance Institute (CII) and the Chartered Institute of Loss Adjusters in conjunction with Ordnance Survey, found that 82 percent of 242 members of the CII’s underwriting faculty believe that “insurers that do not capture the potential of big data will become uncompetitive.”
Vendors are also concerned about the dearth of big data skills. For its part, IBM recently announced that it has added nine new academic collaborations to its more than 1,000 partnerships with universities across the globe, focusing on big data and analytics — all of which are designed to prepare students for the 4.4 million jobs that will be created worldwide to support big data by 2015. The U.S. Bureau of Labor predicts a 24 percent increase in demand for professionals with data analytics skills during the next eight years.
As part of IBM's Academic Initiative, the company is launching new curricula focusing on big data and analytics with Georgetown University, George Washington University, Rensselaer Polytechnic Institute and the University of Missouri, as well as a new addition to IBM's partnership with Northwestern University.
IBM says big data skills most in demand include the ability to uncover insights from data to solve problems, act on findings, enter new markets, and gain a competitive advantage.
The Ordnance Survey points to specific skill areas within insurance companies that call for big data skills — with a focus on underwriting. The survey finds nine out of 10 underwriters think that “access to real-time claims data would help price risk more accurately, with auto (88 percent), household (76 percent) and health (60 percent) being cited as the insurance lines, where pricing accuracy could be transformed by big data-enabled pricing models.” Also, 84 percent of loss adjusters agreed that insurance companies currently under-utilize the information gathered by loss adjusters, and 87 percent believe that breakthroughs in predictive analytics mean that insurers will demand more detailed and frequently updated data.
Location intelligence is another huge area — such information that is third-party assured, fixed and verified “can ground disparate streams of data to allow underwriters to make sense of the data rush,” says the Ordnance Survey report. “Encouragingly, telematics and M2M devices, along with GPS-enabled devices and social media postings, are already being deployed by insurers and customers are proving willing to share information in return for rewards. Pitching this offer right could deliver a key competitive edge in risk visibility and pricing accuracy.”
Big data analysis makes a competitive difference when it enables decision-makers to look across a broad spectrum of information flowing through the enterprise. “Data is more powerful when it’s linked with other datasets, allowing underwriters to not only validate existing data, but also identify previously unseen patterns and risks,” according to Sarah Adams, financial services sector manager at Ordnance Survey. “Big data has the potential to transform underwriting by improving risk analysis and pricing accuracy, and there is a clear need for insurers to correlate premiums to risks more effectively.”
Joe McKendrick is an author, consultant, blogger and frequent INN contributor specializing in information technology.
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