Big Data, Little Data and Decision Analytics

September 21, 2014| Von Steve Mannik | Life | English

How big is Big Data? Is it Gigabytes? Terabytes? Petabytes?

At Gen Re, we don't think data size matters as much as what you do with it. In the right hands and with the right tools, Decision Analytics can create powerful business applications for both Big Data and Little Data.

I believe that Decision Analytics applications will bring big changes right across the life insurance industry, transforming many processes from the back to the front office, such as agent recruiting, agent effectiveness, customer acquisition and retention, cross-selling, underwriting and claims.

As a direct reinsurer we don’t tend to interact with agents and consumers, so our leveraging of Decision Analytics can focus on the underwriting and claims aspects of the business. Because we do business with multiple insurers, we stand to accumulate a lot of data, and this should allow our Decision Analytics tools to produce some unique perspectives.

Decision Analytics is often promoted as a fraud-prevention tool. New analytical techniques will most certainly help combat fraud, but we will never fully eliminate it. Fraud will always be present in the insurance industry, and as elaborate and unscrupulous schemes involving stranger originated life insurance (STOLI) policies have shown, detection and catching can become a cat and mouse game.

Where Decision Analytics and reinsurers can really transform our industry is in developing new underwriting methods. For example, the middle market for life insurance is an underserved sector, and I believe the key to cracking this market is to drastically simplify multiple elements - not only underwriting, but also marketing, distribution, product design and administration. Decision Analytics can play a large role in enhancing middle market success for existing life insurers, so long as non-traditional competitors, such as Facebook, Google or Amazon, don’t get there first.

One thing is for sure, Gen Re will continue to challenge our clients to think differently about their business. We’ll provide them with all the technical and strategic insights that can help them differentiate themselves in these very competitive markets. Decision Analytics, in tandem with underwriting R&D and market research, is one of the powerful tools at our disposal to achieve this transformation.


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