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.
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.
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