The Effect of Big Data on the Development of the Insurance Industry

Abstract

Big data is at the heart of the insurance industry through the uses it provides, where the year 2022 is considered the beginning of the “digital revolution” when humans were able to store more digital information in technological tools than ever before. Research results have shown the impact relationship between big data and various industries, including the insurance industry. Big data has improved all aspects of the insurance process, from pricing and underwriting to claims management and customer service to ultimately more effective risk management. Based on practical and theoretical practices in this framework, the question arises whether big data has brought about development in the insurance industry. Therefore, the purpose of this study was to gain a better understanding of the impact of big data on all aspects of the insurance industry. The research findings showed that the quantity and quality of data collected and used by insurance companies directly impact the services produced and developed. Big data enables insurers to identify patterns, trends and behaviors, allowing them to develop customized products and services. Also, by collecting and utilizing quality big data, insurance companies can provide more efficient and effective services, improving customer satisfaction and increasing profitability. Although big data is a lucrative opportunity for the insurance industry, it is also a threat as companies that need the means to access big data, technologies and skills will see their competitiveness drop significantly in the future. On the other hand, intermediary platforms, particularly GAFTA (Google, Apple, Facebook, Twitter, Amazon) that control the entire data value chain, can seek a large percentage of profits by providing the value chain to insurers, or the purchase of these platforms for vulnerable insurance companies, allowing them to dominate the insurance market.