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Data Analytics in Insurance

Written by CFTE’s Experts

Data Analytics are IT tools that allow organizations or individuals to inspect and model data to get useful information out of it. Insurance companies have benefited from these tools a lot, as they are able to receive the things they need, but could not get before, with even more clarity.

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How has Data Analytics Transformed the Insurance Industry?

Data Analytics has brought about a huge change in all industries, and insurance companies are no exception. Let’s have a look at some interesting transformations:

Labour has been Reduced to a Half

Data analysis was always a priority of such organizations. However, back then this task had to be done manually, and many people were required for complex calculations and detailed analysis of the scope of their services and customers. With the help of data analytics, the need for labor has reduced significantly, because the tool is able to do all kinds of computations.

Insurance Companies are Able to Get More Output

Despite a lot of manpower, the analysis made by the professionals was minimal at best, because of the limited capacity of people. However, the organizational infrastructure of data analytics allows for a pinpoint analysis and gives the company the exact information they want.

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Services are Becoming More Personalized

The help of data analytics is being used to understand customer psychology better. This includes customers differentiated by age-groups, their gender, or the location they are living in. This allows for services to be more personalized, i.e., customers are introduced with services or offers that they really need.

Applications of Data Analytics in the Insurance Industry

The applications of data analytics are expanding even further, with the availability of more diversified and stronger tools. Let’s look at some interesting applications:

Data analytics is being used to do a background check, to help determine customers who have a higher risk of committing fraud.

Companies are using data analysis to determine what kind of service their customer is likely looking for, and attract them accordingly.

The claims process is being managed by insurance companies via data analytics.

Data Analytics is being used to determine the locations where insurance companies can expand their market.

Insurance Companies that are Making use of Data Analytics

Here are some insurance companies that are making use of data analytics:

Lemonade:

After making Maya (a chatbot) communicate with customers, data analytics are applied to attain the most useful information that can be further processed.

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John Hancock International:

They are rewarding customers that provide data about their fitness and wellbeing through wearables like a smart watch. Analytics are applied to the data to determine which customers have a lower chance of insurance.

Final Thoughts

Various organizations are always coming up with new data analytics tools, with added features and advanced functionalities. All of this, in the long run, will allow for greater progress in the domain of data and information handling, and deriving meaningful conclusions from data, contributing greatly to further success of insurance companies.

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The Centre for Finance, Technology & Entrepreneurship (CFTE) is a global education platform that aims to equip financial professionals and organisations with the necessary skills to remain competitive in a rapidly changing industry. Our leading training programmes, curated by global industry experts, help talent build skills to join the digital revolution in finance. CFTE’s courses are globally recognised with accreditations from ACT, IBF, CPD, SkillsFuture and ABS.

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