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How is data used in the insurance industry?

The insurance industry uses data to build up a picture of a client to be able to provide the best cover for them in the event that the unexpected happens. This data is both specific to each client, and general (to build up a big picture). Insurers use data for their customers’ benefits, to give them products and services that are as relevant and personalised as possible. It also gives insurers an idea of how risky a client may be.


Why do insurance companies need to optimise their data?

With recent widespread digitisation, insurance companies now handle huge datasets which can be clunky, slow, and riddled with errors such as duplicates. This not only makes it harder for insurers to get real-time insights (as there is always a lag) but it also means customers may get frustrated at delays.

Perhaps the worst consequence of unoptimised data is that it is prone to error. In datasets with errors and duplicates, automated insights will not be accurate. This could product insights which are erroneous, causing insurance companies to make poor decisions.


What data is used by insurers?

Insurers can only gather data from information that clients give them access to, via online forms or from other sources. They can also gather data through price comparison websites and data brokers, which collect data from multiple sources and anonymise it. Insurers also collect and use data across the insurance product lifecycle, including the product design, marketing, sales, and distribution of the product.