Transforming the Insurance Industry with Big Data Applications

IntroductionThe COVID-19 pandemic comes up with an opportunity for the insurance industry to remake itself strategically financially and operationally according to the current market needs.There is requirement of building stronger digital platforms and to develop more innovative ways of working.Now with the application of big data in insurance sector results in enhancing fraud detection rates, effective insurance services access and also providing low-cost benefits to the customers and the company.Purpose This chapter discuss about current development in insurance sector and big data application on various insurance sectors & impact of big data applications on overall efficiency and the profit of the insurance sector.The chapter will also discuss about how big data analytics helps insurance sectors in understanding the complex behavioural of the customers which helps in segmentation and targeting and how the application of big data helps the insurance companies to develop innovative strategies and to enhance operational and functional efficiencies.It also discusses the areas where big data analytics may be applied like targeting and attracting customer, long term retention of customers, assessment of risk, effective detection and prevention of frauds, reduction in insurance cost, personalized services etc. Methodology: Chapter will be based on secondary research.Findings: The adoption of Big Data is now highly seen in the insurance sector.An investment of us$3.6 bn is expected to be done by the insurance companies in big data analytics this year.The implementation of various applications & techniques of big data in insurance sector results in 60% higher fraud detection rates, 30% more effective access to various insurance services and40-70% reduction in cost benefiting both customers & company.Thus, it may be said that big data has revolutionized the insurance industry and making it more profitable and attractive for the companies.(SNS Telecom & IT) Insurance companies are using Big Data technologies in exploring new and customized ways for enhancing the performance of operations and to develop effective strategies for targeting large customer base, offering personalized products, efficient and timely claims processing, fraud detection etc.In 2018 total big data and business analytics market was 168.8 billion U.S. dollars and it is forecast to be 215.7 billion U.S. dollars by 2021(Source: Statista 2021).A huge growth is seen in the market of big data especially its application in insurance industry.Big data has revolutionized the insurance industry and making it more profitable and attractive for the companies.Thus it may be concluded that big data applications are providing great opportunities for the insures and the customers and applications of big data is transforming the insurance companies completely.