Big Data & Analytics for Insurance, Beyond Device Telemetry

Ben Miller on May 18, 2016

Like many consumers this year, I have slowly started taking the plunge into the connected lifestyle. Connected thermostats, connected bathroom scales, wearable fitness trackers and more. With each new device comes a new data dashboard to play with and obsess over. Having all of this personal data at my fingertips is fun, but, realistically, feels somewhat superfluous. I like looking at charts and graphs as much as the next guy, but deep down, I really don't care anymore about how long my furnace was running than I did before I had graphs to show me. What I do wonder, however, is how long it will be before I get a chance to hand all of my home, car and health information over to my insurance company.

I have been hearing about these initiatives for the past year, with John Hancock opening up the Vitality Program - a Fitbit data sharing initiative - last April. Given proper incentive and assurances around data security, I see no reason why this device telemetry exchange wouldn't become a de facto part of the insurer insured relationship.

It’s an exciting time to be an underwriter. We’re very close to a future where demographic tables can be replaced by actual data from each individual insurance liability. Big data analytics is becoming a reality. These analytics can take unsolvable problems - where we have no hope of ever finding a perfect solution due to the inexact nature - and brute force a solution with massive amounts of data. Think stock markets being taken over by algorithmic trading, where over 70% of trading volume is done by computers analyzing vast quantities of data.

Insurance companies getting their hands on customer data opens the door for similar levels of runaway automated efficiency. This will make it harder and harder for insurance companies to compete on price alone, but analytics have a place in the increasingly important value added services like customer service.

I have seen, first hand, some of the challenges surrounding increasing amounts of customer data being collected. Yet, with all of the innovative ideas for applicable use cases, wrangling in all customer data into a single, complete customer view, seems like a must for any company with direct customer interactions. For example, if I close my eyes and envision my touchpoint with an insurance company in the year 2026, I do not envision calling in to a toll free number, sitting on hold, reading out my policy number, and explaining my claim to an agent for the third time. Everything about me as a customer should be at the fingertips of my customer service contact. The data is there, and I know it, and solutions have been developed to leverage the data, so the next step is simply implementation.

From the perspective of the insurance carrier, all of these interactions also provide insight in why customers leave and how they can reduce churn. Things like Call Centre transcripts can be analyzed for sentiment, and win backs can begin before it's too late.

While I’m still watching the “Big Data” insurance industry disruption approach at a pretty glacial pace, I am very excited about what it has in store for consumers and corporation. I’m still excited for what my data can do for me.

It will be a give and take, where I give up data with the expectation that my data is being used to provide an ultimate streamlined experience. An insurer who is ready to do this will get my policy in a heartbeat, and my heartbeat (and step count) in my policy.

Is your insurance carrier leveraging your data & keeping you connected? Share below!