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How Vehicle Insurance and Big Data Work Together

Virtually every industry relies on big data in some form these days. Even if you don’t know exactly what it is, there’s little doubt that you’ve heard of it, and it’s much more than a buzzword. Simply put, big data is the management and analysis of extremely high volumes of data that would take too long to process using traditional methods.

As industries and customer bases expand, the amount of data that an organization needs to record, interpret, and store rises rapidly. Big data is about accurately recording these large data sets and finding patterns within the data that can lead to greater insights. It’s a modern necessity for insurance companies, and you’ll need APIs to use it effectively.

APIs Explained

In order to make the most of big data, organizations need to use integrated software and apps that can seamlessly share their data in a single source of truth. This is made possible thanks to an application programming interface (API).

In a vehicle insurance company or a motor club association like AAA, an API gateway is situated between the clients and the organization’s backend services, ready to direct AAA members to the correct microservices and directories. An API also allows disparate software solutions to communicate, so you won’t have to worry about manually sharing siloed data in your car insurance company.

With an expert installation of API management tools, such as TIBCO API management, you’ll be able to deploy anywhere and manage your APIs from any location. TIBCO Cloud Mashery lets you handle your own API creation using any big data source, secure them with authentication processes and API keys, and analyze their data in real-time. Here are some of the most important ways that vehicle insurance enterprises can take advantage of big data.

Underwriting

When it comes to auto insurance, the underwriting process is crucial to determine how risky a driver may be and whether covering them is an acceptable risk. Big data and API platforms make it easy to collect relevant information in near real-time, such as driving records, years of driving experience, insurance history, annual mileage, and even credit scores.

Pricing, Quoting, and Customer Service

Once the underwriting process is underway, an auto insurance company will begin to determine appropriate insurance products and premiums based on the projected level of risk. This process may also involve using analytics to find ways to offer coverage, even if there are issues.

Additionally, big data and APIs can determine if a driver is eligible for any special promotions or discounts based on their driving history and other factors. Such rewards could include a AAA membership discount, for example. This organization provides roadside assistance and other services to AAA members.

Data visualizations made possible by APIs can also help with the quoting process, and it’s becoming one of the most common data analytics trends for good reason. Insurance companies can use API portals to automate much of this process by showing prospective clients accurate and easy-to-understand charts and graphs that highlight the advantages of each plan they’re eligible for and displaying a breakdown of price points. This makes the sign-up process as easy as possible for customers, and they can have peace of mind knowing that they fully understand their insurance package.

Of course, customer data is part of big data as well, and it can be used to provide more personalized experiences for your existing customers. When it comes time for them to renew their service, you can make them special offers based on their customer profile, or you may decide to create entirely new insurance products based on customer feedback.

Fraud Detection

  • Among your greatest priorities as an insurance company are to protect your business and your customers. Just as banks use big data analytics to scour their services for unusual activity and anomalies to uncover credit card fraud, you can scour your own data and networks for unusual activities that could indicate attempts at insurance fraud. Thousands of insurance scams are uncovered each year—don’t let your auto insurance company fall victim.

Big data is crucial to help you break the limit of old, legacy systems and take your vehicle insurance company to new heights. Let it help you reach the destination at the end of your digital transformation for the good of the company and your customers.

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