The term Big Data usually refers to any large structured or unstructured data source that can be collected, organised and analysed to produce business intelligence. While the advancement of technology and proliferation of the internet has always enabled businesses to perform data analytics, the difference with Big Data is the volume, velocity and variety of the data available, which leads to data in a more digestible form in 'real time' and which might assist businesses in making more informed and confident decisions.
For marketers, Big Data has the potential to capture information about target customers with an accuracy and level of detail unfathomable only a decade ago.
For insurers, Big Data represents opportunities to use a greater number of resources, particularly external resources, to capture information about the individual risk profile of a policy holder that might be more in-depth than traditional methods of data analytics. It can also enhance other functions such as insights into customer behaviour and buying habits, marketing distribution, claims management and fraud detection.
The flow on effect from the ability to understand and predict risk is the likely reduction of loss.
So where does Big Data come from and how is it accessed? Big Data can come from a huge number of sources, including consumer behaviour data, credit information, geospatial data and social media, just to name a few. There are currently a vast number of Big Data analytics tools available on the market and it is crucial to evaluate the potential business value that each tool can offer, in the context of the long-term objectives of the business.
Further, Big Data does have its limitations because the data is only as effective as its users enable it to be. The data can only suggest trends, validate claims and reduce uncertainty of human error in decision-making. It is still the human decisions that keeps the wheel turning and in order for Big Data to have its full impact, businesses will need to employ the right of kind of staff with appropriate technical skills to take advantage of the potential opportunities that Big Data analytics can present for them.
In summary, while Big Data can revolutionise the way that businesses do business, at the end of the day it is still data analytics and requires human input for its success. Saying that, Big Data seems to be the way of the future and for those businesses that are prepared to embrace it, the result might revolutionise the way the business operates and open up new opportunities that were not previously available.