The poll showed how in the major economies of Europe, big data is now the number one agenda item for insurers, with 87% of French and 90% of German insurance executives also saying a big data strategy is their top priority or of critical importance.
In addition, the survey revealed how UK insurers plan to use big data over the next two years, with 47% saying that they will leverage new data to achieve fairer prices for customers and make it easier for customers to do business with the company. Nearly half (49%) said that they will use big data to refine customer acquisition strategy, to enhance customer engagement and to combat fraud.
The survey also revealed that well over half of UK insurance decision-makers (61%) intended their big data initiatives over the next 24 months to boost profit margins.
“Although there may be different emphases, we can see that in the UK, as in France and Germany, insurance companies recognise the huge commercial potential in analysing the massive amounts of customer and sensor data, giving them the ability to offer consumers new, tailored products and services as well as more sophisticated risk models to refine,” said Lesley Winrow, Head of Insurance, Teradata UK. “However, it is important that these companies also acquire and develop the expertise and the enabling technology to fulfill their ambitions and capitalise on the remarkable opportunities that big data is opening up.”
Other findings of the survey showed that 76% of UK insurers believe customers are happy that personal data influences interactions when buying insurance or making claims, compared with 69% in France and 59% in Germany.
The survey is part of Teradata’s ongoing exploration of how big data is impacting the insurance sector. A recent Teradata-sponsored roundtable discussion in London addressed the big data challenges within the industry – and the topics on the agenda included pricing, privacy, data ownership and encryption. The event was attended by:
• Stephen Brobst, CTO, Teradata Corporation
• David Thomson, Director of Policy and Public Affairs, Chartered Insurance Institute
• Professor Jon Howes, VP Strategy, Secure Thingz and advisor to IoT Security Foundation
• Renate Samson, Chief Executive of Big Brother Watch
In weighing the pros and cons of utilising personal data, Brobst had the view that concerns around privacy would be outweighed by the advantages the data offers, adding: “The opportunity for insurers to utilise their most prized asset – data – is now greater than ever, as connected customers expect personalised policies that more closely reflect their behaviour.”
However, a note of caution was struck by David Thomson, who said that although big data represented a major opportunity, there were also wider risks.
He said: “Big data offers a major opportunity for insurers to provide varied and individualised products and services to customers.
“But in the pursuit of this, they need to be wary of the reputation of the sector, in potentially abandoning the value of pooled risk, where the losses of the few are paid by the premiums of the many.” He said there was a danger of price being favoured over value – to the possible long-term detriment of the public.
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