Big data and insurance: Implications for innovation and privacy
On the principle of risk the insurance sector works. Insurance is the money which people claim after any bad incident. Insurance is rather a shield to protect from any bad incident in our life. It can be related to our health, life or for our vehicle. It is really important that we get a clear view how to assess our risk investment.
Big data is changing the insurance sector also. To predict the risk, and claims big data is widely used. The insurance companies can improve their customer satisfaction levels and they can deliver better results with accuracy. Let’s see how big data is a boon for the insurance industry.
- Assessing the risk level
While selecting the insurance policy, it is crucial to select the right policy premium. Using tracking devices can help them determine the risk levels. For home and health insurance, the sensors or telematic devices helps in calculating the risks.
The predictive models can be studied and analyzed to check the chances of road accidents. It can also analyze the safety of the local areas and what are the chances of getting the car stolen.
Smart devices like FitBit, Gramin, and Apple Watch can keep a track of the health condition of the people.
These activity trackers not only track the individuals but the results can determine and offer customized insurance policy. The insurance companies are collaborating their business with the smart device companies. John Hancock offered a discount to their clients for using the FitBits for the first time.
Apart from studying the data, it is important for the insurers to protect the data of their clients.
- Detecting fraud
Using big data, fraud detection or criminal records can be tracked. The social media profiles or the credit references can help the insurers. If any customer has a fraudulent record their record can be tracked and stored for future reference. These complex matches are successful highlighted by big data.
- Getting a view of the customer
Customer data can be studied with the help of analytics. From the call center data, to chat responses, emails, social media platform and user forums, customer behavior can be analyzed. If a customer is unhappy about a product and their issues are not resolved, then they will call the helpline numbers several times. It might show that they are unhappy about a certain product.
Big data can help in achieving the right customer relationship and customer satisfaction can also increase. The positive approach can also help the insurers to offer the right product and they can up sell it also.
- Increasing the customer satisfaction level
Gone are the days of offering coupons or loyalty programs to the customers. The insurers are offering discounts with the insurance policy and they are collaborating with the smart wearable as well as the medical stores.
With BodyMedia, Cigna has partnered and they are offer armbands to the customers. It is studying diabetic predictions and it is offering insurance plans according to the health conditions.
- Time saving and cost effective
Big data is helping the insurance companies to save time and eliminate repetitive works. Previously the companies did compliance checks, data entry and then process the insurance policy. But these days, to save time Big Data is used to study past record, loan records, property analysis, customer feedback also.
Big data is thus saving time for the insurers and they process more number of policies for more customers. Customer feedback is studied and what they need can be tailor made. The customers can also select the right policy packages with the help of the smart devices.