How Big Data Is Changing Insurance Forever
How Big Data Is Changing Insurance Forever'
Bernard Marr , CONTRIBUTOR
I write about big data, analytics and enterprise performance
The insurance industry works on the principle of risk. Customers take out policies based on their assessment of a particularly bad thing happening to them, and insurers offer them cover based on their assessment of the cost of covering any claims.
So wouldn’t it benefit everyone if there was a way to more accurately assess risks? Well, it turns out that in age of Big Data there is. Big Data as many will be aware by now is a buzzword which refers to the ever increasing amount of digital information being generated and stored, and the advanced analytics procedures which are being developed to help make sense of this data. Predictive, statistical modelling basically means working out what will happen in the future by measuring and understanding as much as we possibly can about what has happened in the past. “Models” are then built which show what is likely to happen in the future, based on the relationships between variables which we know to exit from examining the collected data from the past. It is a key tool in the Big Data scientist’s toolkit, and insurance (predictably) has been one industry that has been very keen to adopt it.
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