How Big Data Will Influence the Insurance Industry
Big Data is revolutionizing the insurance industry. Actuaries and statisticians have used data analytics for decades to help underwriters assess risk potential. Now, they can perform statistical modelling in minutes, benefiting insurers and customers. Predictive modelling enables insurers to make predictions based on measured data, for example, by using wildfire data to calculate the maximum annual premiums. By observing certain behavioral patterns leading to fraudulent claims, insurers can use dynamic modelling to flag claims made against commercial policies. Auto insurance providers are also offering options like telematics, with sensors that report driving patterns to adjust policy premiums. However, privacy concerns loom as personalized data collection methods may seem intrusive.
