Recently, I was commuting frequently to a site which needed some issues addressed. On the third trip to that office, I noticed that when my phone connected to the bluetooth of my vehicle, it popped up a notification letting me know how the traffic was to the location, slowdowns, and alternate routes. I looked at it for a minute thinking “how did it know I was going to that location again?” My travel had not been routine and I had not used the GPS on my phone to get there before. This is where “Big Data” and data analytics were used to give me pertinent information that I could use for my trip. If you think about the information it put together to provide me with that data, it is quite impressive. First, the app knew I was going to drive somewhere because it connected to my vehicle’s Bluetooth. Then, it knew from data mining where I was going and the traffic information along the route. The traffic information would have been from a host of sources like other cell phones, historical information about that route, other apps and public traffic sites. All of that data was being crunched in real time to provide me with helpful information for my journey. Data analytics are now being used in a host of other areas. Recently, I went into a shopping mall that offered an app for your phone. This app would allow you to search for stores and it would guide you to them with GPS, providing discounts for merchants along the way. I downloaded the app and used it. It was a great experience. While it gives beneficial information, offers discounts to retailers and services that are useful to the consumer, imagine how the data it collects would be useful to the mall administrators. Not only would it let them know where consumers shop, they would know the paths people travel, what entrances people use, where they park, how often they visit and a number of other data points that could help determine where to place advertisements, stores and services. The possibilities are abundant with the data that can be collected.
“The reality is big data is all around us, we just have to find ways to start using it”
In the insurance industry, more and more companies are starting to use Big Data. Some have already started using devices to collect data about driving habits and then use that information to evaluate the risk of the driver and assign the appropriate premium. The insurance industry is just now starting to leverage the incredible amount of data that we have. While we obtain specific information about a customer’s home, vehicles and businesses, we actually may have additional data that we are not using or sources of additional data we can tap into. Depending on our relationship with the customer we may know random facts. For example, perhaps they have discussed where they like to vacation, when their children might start driving, or a number of other facts that can fill out the details around potential risk and opportunity. We can also obtain public record information to help complete the picture of our current data. These unstructured data points can add value to the information we already have, and can present additional opportunities to sell needed coverage or mitigate risk for them.
Additionally, in the health insurance business, data is being collected to provide the customer with additional services, along with creating data points that can be analyzed by the health insurance provider. Typically, your physician orders tests, reviews the results with you and orders prescriptions. The physician in turn forwards the results with notes to the insurance company. They can now monitor your prescription pickups and renewals, and send out reminders to patients about how they may improve their heath situation. These types of data points can provide an abundance of information to help health insurance companies provide better services to their customer. It also gives them better data to calculate a premium. I think we will start seeing health carriers use mobile and wearable device information, which can monitor a person’s habits and provide ongoing assessment of their lifestyle and activity. In turn the providers can then possibly allow customers to work to reduce their premiums on a sliding scale by showing that they are improving on their unhealthy behaviors.
While we do see some carriers starting to use big data, as an industry we have just started down the path of using this data.
At the Leavitt Group, we have always consolidated data as an organization. Now we are starting to use better tools to analyze the data and determining what other information we may have that can be useful to our overall goal of finding additional opportunities to assist our customers and finding markets that work for us. Just like many others, in our industry we see the importance of using Big Data not only as a sales tool, but also as a service tool to our customers.
One of the things I see that could help the insurance industry as a whole, is the sharing of data and finding an efficient way to accomplish that. One of the biggest hurdles we face in doing that is connectivity from carriers to brokers. Once we can overcome that hurdle, the sharing of data can evolve to the next step.
We also are starting to see the insurance market evolve. Consumers are looking for different ways to understand and purchase insurance in a convenient way. One of the innovations that we are not yet utilizing to the full extent is mobile and wearable devices. I expect that one day we will see a service connected to an app that can mine the data that is selected by the consumer that can help cover risks that may arise. How would this work? Let’s say they book some type of travel, that service could be mining personal data (emails, social media, calendars, etc.) in real time and offer coverage for that trip. Or maybe they make a purchase, and again that real time data mining would be able to offer coverage to cover the risk right from app. From my perspective Big Data and data analytics will be driving our industry forward, the best way we can get there is by providing useful tools to the consumers which also provide information data points. Customers will not mind giving up data if we are transparent about what information we are asking for and what value they are getting back from it. The reality is big data is all around us, we just have to find ways to start using it.