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Insurance Business | 18 Sep 2013, 12:00 AM Agree 0
Classic, old-school broking skills will become more important than ever as the industry embraces the age of big data.
  • TMS | 22 Sep 2013, 10:07 AM Agree 0
    Big data has its benefits in many industries, but the danger is in insurance relying solely on big data to make its decisions, and also enforce its assumptions. Yes, good for estimating insurance risk (ie, which areas would be prone to flooding, bush-fire risk) from big analyses. No, not good for declaring the insurance risk based on buying patterns.

    For example, statistically I'm a higher car insurance risk because I'm a male P-plater. Never mind that I stick to the limit, obey the rules (moreso than than some drivers long since off their P's), don't tailgate and indicate when I change lanes.

    According to the linked article, I'm a bigger insurance risk because I like spirits, eat pasta, and fill up the tank on a tuesday night. This is extrapolated, how? Assumptions derived from data that has nothing to do with driving on the road.

    But big data isn't the be-all and end-all, and like all well-purposed inventions is open to misuse. More than just the broking, the industry needs to look at other ways to give value to its customers.
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