Use of big data in insurance

The global insurance sector is currently undergoing a period of significant change. A new wave of advanced data-processing and analytic techniques, such as machine learning, are being exploited thanks to the supply of huge quantities of data. Abundant datasets are created and made available rapidly, even in real-time, from data captured via mobile devices, Internet of Things and wearable tech. Cloud computing and 5G networks provide the connective backbone of sophisticated data-intensive applications, which combined, have the potential to completely rewrite the basic mechanics of insurance. Although traditionally considered technology laggards, and risk averse, insurance enterprises are now starting to react to this digitisation and the new opportunities it brings. In this chapter, we discuss the function of insurance, how new technologies can augment and change the sector, and highlight some of the key challenges that these new technologies introduce.