Over the past 10 years, advances in technology have changed the face of businesses worldwide. One of the most striking changes has been the availability of Big Data. This large volume of both structured and unstructured data inundates companies on a day-to-day basis. But it’s not the amount of data that’s important. It’s how organizations use this vast quantity of information to derive insights that matter. When it is used effectively, Big Data and analytics can help insurance carriers streamline processes, better manage resources, and improve profitability.
According to IBM, 2.5 exabytes of data are produced every day. This amount of data would fill 2.8 billion CDs (each with a capacity of 650MB). Laid end to end, these CDs would wrap around the earth’s equator 11.5 times.
Because there is too much data to be processed in traditional ways, Big Data is defined in four dimensions: volume, velocity, variety, and complexity. With so much available information and new updates coming in perpetuity, finding the right information in all of the data can be like finding a needle in a haystack. That’s why, what we at LexisNexis Risk Solutions refer to as “Smart Data,” is so important. It’s not just about capturing and storing data. Analysis is critical.
Within the Life Insurance industry, many new business and underwriting requirements are available as structured data. And that data arrives within sub-seconds. Insights from this data can be gained to aid in identity verification, underwriting and risk assessment using motor vehicle records (MVRs), financial information, property ownership, criminal history, professional licenses, prescription history, and credit history. There is far more information available than a single carrier would be able to access within its own systems, and it offers an objective view for proposed insureds. Additionally, these records can contain independently verified data, reducing the need for underwriters to make follow-up phone calls to verify the applicant’s information.
Advanced linking technology poses an opportunity to connect data within and outside a carrier’s system to provide a comprehensive, single view of an individual. That’s where “Smart Data” comes into play: by incorporating real-time data and analytics, savvy carriers can achieve first-mover advantage, which will increase underwriting efficiency as well as increasing customer (and producer) satisfaction.
So where is the life insurance industry in the use of using Big and Smart Data? There are four types of organizations. We’ll discuss that in a future blog post. Subscribe now and make sure you don’t miss an update.
To learn more about how big data and analytics help life carriers streamline processes, optimize resources and improve profitability, download the LexisNexis Risk Solutions White Paper.