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How big data and cognitive computing are transforming insurance – Part 3

May 8, 2013

In my previous two blogs [here and here], I’ve talked about how cognitive computing and big data present the insurance industry with great opportunities and some challenges. To develop strategies that capitalize on the potential gold mine of information that big data represents, many carriers will have to challenge their data-centric, business-as-usual approach and the traditional principles that form the foundation of the industry.

In today’s world, companies figure out the questions they want to answer, then pass data requirements to IT to build into a system, warehouse or data mart. When data was considered a precious resource, IT became a de facto gatekeeper, limiting agility and timeliness in exchange for “protecting” the asset.

Shifting the paradigm means empowering and enabling the business to discover data rather than constraining it by requiring line-of-business (LOB) personnel to go through IT to request data. Going forward, IT will need to relax control over non-regulatory data and provide business users with a rich provisioning platform to explore all sources of data—internal and external—to not only answer existing questions, but also to raise new queries based on those answers.

This will likely create a new role: LOB data provisioners. These are power users who know what you are trying to accomplish, have an uncanny ability to anticipate needs, and can find, extract and refine data from any source. IT alone will not be able to keep up with the breadth and depth of this new natural resource. Your organization will need a new skill set to take advantage of your data, and those users will need a new set of tools.

 

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Cognitive computing—enabled by big data—will create a new paradigm for insurance that starts with the customer instead of a product, modeling the risks that each unique customer faces and matching them with the right coverage and price.

IBM calls this customer-centric approach Smarter Insurance. In this model, insurers attract customers instead of selling to them; they provide protection to their customers against the unexpected instead of just issuing policies; they serve customers by preventing claims rather than just paying for them; and they optimize the business with insight instead of just managing it with instinct.

 

To learn more . . .