Open your eyes: Big data - Insurers need to make better use of information around them

Despite there being an ever richer source of information available to them, insurers are failing badly to properly capture this information.

This is the view point of Achim Bauer, insurance partner at PwC.

This failure means that the industry is not translating that information into insight, that it can use to better understand and select risk, along with creating valuable propositions against that risk, he argues.

“That insight can also allow them to better target sources of risk, based on that insight to ensure a positive outcome, in terms of underwriting result,” he says.

Bauer says that there is an emerging recognition that the insurance industry needs to be more sophisticated in leveraging information and turning it into insight, citing Lloyd’s of London as an example of an institution that has recognised this.

Solvency II should provide for enough stimulus to explore the systematic capturing, analysis and utilisation of the insight gained to enhance the ultimate economical outcome for all stakeholders, he argues.

“However, I cannot see systemic evidence of this being recognised across the industry,” he says.

“More importantly, this is also associated with the necessary recognition of the strategic benefit and the required investment and so the question is, looking at the current market, whether the insurance industry has the appetite to properly invest to create that future and that insight.”