Harnessing “big data” is proving essential for insurers seeking to maintain and increase market share and profitability, according to Fitch Ratings, who said that those that fail to keep pace risk being marginalised or coming under pressure to consolidate.
“Many elements of the insurance business could be transformed, such as distribution, risk selection, pricing and claims management,” Fitch said.
“The insurance industry’s core functions historically used large volumes of data to assess and price risk and predict future claims experience. But insurers have been slower than companies in other sectors to adapt their business models to rapid technological change.
“Expansion in computer processing capabilities, data storage capacity, the proliferation of internet use and the development of “smart” devices has created new opportunities for insurers to access and process information.
“The gap is starting to close now that insurers have realised the potential of modern big data, but it has helped
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