Bob Welton, Regional Director Northern Europe, NTT Europe.
With IDC forecasting the big data market to expand at a compound annual growth rate of more than 31 per cent to be worth nearly $24 billion in 2016, it is important that businesses understand that to unlock the true potential of big data they need to implement a cloud strategy first.
It is clear that a growing number of business leaders are turning to the cloud to help gain a competitive edge for their organisations as well as looking for new and efficient ways of working. In 2013 a study by KPMG study revealed that the use of cloud dominated boardroom planning, with 42 per cent of UK organisations revealing that at least one-fifth of their total IT spend in the next 12 months would focus on cloud services. However while the business benefits of moving to the cloud may be clear for many, insurers are finding the challenge of marrying data, security and the cloud a tricky one.
The most recent wave of automation and new technologies have significantly enhanced operational efficiencies in the insurance sector, increasing revenue opportunities and improving the customer experience. A recent PwC report highlighted that 49% of insurers think a competitive advantage will be gleaned for those who can unlock big data, but a strategy to understand how best to adapt is required. With so much data accumulating alongside growing compliance and regulatory demands the challenge facing insurers is how to use big data now to get ahead tomorrow?
Big data in insurance
Across the ages insurers have used data in all forms to profile customers and calculate risk. Today, insurers use analytics to build an accurate profile of their customer base and the increasing availability of customer data is driving the view that insight and personalisation is a key-driver for the industry. To achieve a personalised approach, insurers need to take data from a wide variety of sources and apply appropriate analytics to unlock key information. However this information is a moveable feast of timely updates and it’s this inconsistency, along with data overload, quality and data protection laws, that provide the real headache for those driving the sector forward.
Like the wider business community, insurers are beginning to adopt new computing models to embrace big data infrastructure. The cloud provides insurers with new platforms to manage the rapidly growing sets of data and support the compute power to process it all into tangible and insightful information. Similarly cloud computing has the ability to add great value to how data is stored, with Gartner predicting a third of all content will be in the cloud in just four years. Without access to cloud computing, detailed analysis of data would only be a dream for most organisations, as the high computing power systems are extremely costly to run. Coupled with big data, the cloud creates powerful value and insight that helps businesses innovate. This symbiotic approach to big data and the cloud is one recipe that will ensure insurers can build momentum in their space and stay ahead of their competitors.
An agile approach
It’s clear from our recent research that insurers have made a shift in outlook, altered relationships with their IT providers and are ready to make the investment in the cloud, to get ahead of their competitors. This united approach will eliminate bad service for customers and enable organisations to unify their applications so mistakes are not made. For example a customer with a quote lapse should not be targeted for new business; instead they will be approached with their existing records intact and provided a quote mechanic that is relevant. These solutions need to marry old, existing, legacy systems with new applications, and feed data through the business in a variety of different ways. Insurers that can do this stand to benefit from greater agility – being able to launch new applications more quickly than competitors and reap the benefits of higher productivity.
For now, the proprietary, actionable ideas and insights generated through analytics are the most valuable data of all and the investment in understanding big data will be critical. The next level will clearly involve insurers having the confidence to move systems into the cloud, and drive innovation and better ways of understanding their customers. Failing to act now will lead to missed customer opportunities and organisations being left in the dark while their competitors reap the benefits.
To find out more on the relationship between big data and insurers, download NTT Communications Whitepaper here.