The insurance industry needs to adopt new ways of working in order to make sense of Big Data and remain competitive in future years.
The research, for the Chartered Insurance Institute (CII) and the Chartered Institute of Loss Adjusters in conjunction with Ordnance Survey, found 82% of those questioned believed that insurers that do not capture the potential of Big Data will become uncompetitive.
Big data is a collection of data sets so large and complex that it becomes difficult to process using database management tools or traditional data processing applications.
It would include lifestyle data such as purchases and location data.
Members of the CII's Underwriting Faculty also revealed that nine out of 10 underwriters think that access to real time claims data would help price risk more accurately, with motor (88%), household (76%) and health (60%) being cited as the insurance lines, where pricing accuracy could be ‘transformed' by Big Data-enabled pricing models.
However too many insurers believe they are ill-equipped to capture the potential of Big Data, 95% agreed underwriting departments lack necessary tools, whilst 81% agreed underwriting departments lack specialist skills.
Underwriters admitted that they don't expect to see any investment in Big Data in the next two years, and even 10 years on, the anticipated spend might be minimal to modest.
Commenting on the findings, Ant Gould, Director of Faculties at the Chartered Insurance Institute, said: "This report provides food for thought for underwriting teams preparing for advances in analytics and real-time pricing,
"helping them to identify the necessary skills sets that will be critical in enabling underwriters of the future to survive and thrive to the ultimate benefit of their customers."
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