4 Big Data use cases in the insurance industry you should know about

Insurance holds importance for everybody as it deals directly with the safety of our lives and assets. Big data analytics is an innovation that helps companies in taking the correct decisions by providing them with intuitive insights. Big data use cases in the field of insurance exemplify what an industry can do, given the right insights.
The insurance industry holds importance not only for individuals but also business companies. The reason insurance holds a significant place is because it supports people during times of adversities and uncertainties. With technology evolving at an astonishing pace, how it manages to find applications across several industries is an exciting spectaccle. Big data refers to the abundance of information collected from numerous sources. The data collected from these sources are of varying formats and change at tremendous speeds.

1.  Collecting information

As big data refers to gathering data from disparate sources, this feature creates a crucial use case for the insurance industry to pounce on. When a customer intends to buy a car insurance, the companies can obtain information from which they can calculate the safety levels for driving in the buyer’s vicinity and his past driving records.
Apart from calculating the risks, companies often phase out the possibility of the driver being involved in an accident. Using these stats, deciding on the premium and cover for an insurance buyer becomes easier as this information provides actionable insights to the insurance company.
Referring to life insurance and as big data in healthcare is already an application, companies can encourage users to wear smart gadgets that can be linked to databases that transmit health information from users to the organization’s database. Collecting information helps insurance companies in warning the insured individual about an impending illness or disease. If alerting is not feasible, companies can increase the premium and offer coverage accordingly. Raising the cover allows users to feel secure about themselves when under a life insurance.

2.  Gaining customer insight

Determining customer experience and making customers the center of a company’s attraction is of prime importance to organizations. With big data’s introduction in insurance, agencies can easily store, manage, and access information arriving from several sources, which is directly related to customers.
This data can help organizations in gaining customer insights, such as past policies held by her, and answering frequent questions asked by a customer to the organization. With big data analytics, insurance agencies can have accurate information at their disposal, which can help them focus on improving customer experience.

3. Fraud detection

Insurance frauds are a common incidence. Big data use case for reducing fraud is highly effective. Using big data in insurance, companies can keep track of past claims made by a client and the possibility of her claims being fake. When systems detect that a claim is being made by someone who has a history of false claims, the system automatically halts the claim processing and initiates an investigation against the customer.

4. Threat mapping

When an insurance agency sells an insurance, they want to be aware of all the possibilities of things going unfavourably with their customer, making them file a claim. Setting policy premiums also becomes easy as big data provides organizations with ample information to analyze from. When a customer wants motor insurance, for instance, the insurance company can analyze information about the areas where his vehicle travels the most and what is the possibility of that vehicle being damaged and how prone is that area to road accidents. When an insurance agency has such information available at their disposal, they can easily decide on how much premium they should charge to stay clear of any losses.
Even though the insurance agencies do not sell any physical products, this industry holds importance as it helps people by ensuring them of tehir social security. Organizations can look up to the use cases and learn about the ways in which big data analytics can help them. CTOs and CIOs of insurance agencies can start reading about how their agencies can further benefit from the use of big data.

Founder and CEO of Allerin. Works in Big Data, IoT , AI and Blockchain.