Insurance industry 'behind' on harnessing big data

By Danny Palmer
18 Aug 2014 View Comments
Unlocking Big Data

Insurance lags behind other industries when it comes to harnessing the power of big data, but analytics represents "the next frontier" for the sector.

That's what Jason Cabral, group head of pricing and management information at Zenith Insurance and the Markerstudy Group, told Computing in a recent interview.

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The firm has moved away from spreadsheets to data analytics, using SAS to improve business performance, but Cabral said insurance in general needs to play catch-up with other sectors when it comes to using big data.

"To be honest, I think the insurance market is a bit behind when you consider real big data," he said.

"When you consider incorporating things such as Facebook feeds, Twitter feeds, all that into insurance pricing and for tracking down fraud, I think we're quite behind companies that do this as their day to day."

Cabral contrasted the way in which web firms use big data when compared with the insurance industry, pointing out how the likes of Google use algorithms in everyday decision making and are benefiting from this method.

"Real data companies such as Google and the rest will be constantly analysing and changing their prices depending on people's potential to buy. Their different profiles and algorithms used for selling adverts as well as general marketing is quite advanced in that area," he said.

"I'd say no insurers are really using that at the moment, but I'd say that's the next frontier of insurance; incorporating everything we know about the customer, having a single customer view and actually trying to see which factors correlate with insurance claims," Cabral continued.

"We're trying to use everything we know about the customer to retain them in the longer term," he added.

Indeed, Zenith Insurance will soon be deploying telematics – GPS technology that will enable the firm to collect data from motorists and use it to determine insurance policies, as Cabral explained.

"We're launching a product at the start of September which is our own telematics product. It collects big data, so when you drive it sends the information every one or two seconds about your geolocation," he said.

"They'll put that in the vehicle and that will send information every one to two seconds on the location, the speed, how much they're braking, which roads they're driving on, what time of day it is," Cabral continued, going on to explain how Zenith Insurance will use SAS to analyse the information.

"That data comes back to us and it's using all that to decide what makes a good driver, what makes a bad driver. It's trying to analyse driver DNA to figure out who are the good ones we need to reward and who are the poor ones we need to give a warning or try to educate about their driving," he said.

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