Big data is a term used to describe large sets of information that can be analyzed to gain insight and understand implications. The insurance industry has been greatly benefited by big data. Insurance big data improves the process in the following ways.
- Exposes Fraud: When a fraudulent case came to an insurance agent in the past, it was easy to miss because these shams could manipulate the rules. Big data, on the other hand, uses text mining, exception reporting, rules, modeling and database searches to more quickly and accurately identify fraud.
- Makes Settling Claims Easier: Insurance companies have to look at a lot of data before settling claims to ensure a fair price is given. When insurance big data enters the picture, it is easier to settle claims with speed because analytics are able to calculate loss accurately.
- Reduces Lawsuits: Oftentimes disputed claims end in litigation. Insurance companies can use big data to analyze the different claims to find out which ones are more likely to end in litigation. The insurers are then able to assign the higher risk claims to senior adjusters who may be more likely to settle the claims without the need for lawsuits.
Insurance big data can be very beneficial for the insurance company and the insured when used properly.