This is the first in a series of blogs discussing the benefits of contributory data to the insurance industry.
Thanks to the rise of the Internet of Things, the internet has become a vast repository of information on just about any topic you can think of. We take for granted how quickly and easily we can use search engines to find answers to questions, make purchases and download music or video. The more data we put into a search engine, the more relevant the results it can provide. Search engines benefit from the data network effect, wherein its value to users increases as more people contribute to it by searching and using the data. For the insurance industry, this can help carriers be more competitive.
Every insurance company has data on their insureds, claims experience, cases of fraud and trends related to intermediaries and their own agents, intermediaries or direct sales staff. All this information sits in isolation inside each company and it is of limited use for any individual company, when looking for a broader, more accurate view of a risk.
When these companies join as an industry, however, to combine their respective databases into one massive pool of information, they get access to data they cannot get individually. The beauty of contributory databases is that an insurer provides their own data in exchange for a more robust set of aggregated data back that provides insight into the broader marketplace. Give a little, get a lot back in return – a pretty persuasive value proposition.
In the next blog in this series, I will cover how contributory databases can benefit insurance carriers. For more about contributory databases, download our new white paper, Contributory databases can unlock value for insurers.
Other blog posts in this series:
How can insurance contributory databases help consumers?
How do insurance contributory databases benefit carriers?