The insurance industry has a reputation for being slow to change, but “big data” is coming to force big changes in workers’ compensation. The emerging use by insurers of “big data” analytics in underwriting—and the resultant waning of the purpose and value of the experience modification factor is impacting agents and their clients.
Big data has already redefined industries like Amazon, Netflix, Uber, eBay and Facebook. Stock and mortgage markets are well ahead of insurance with their own predictive models. Big data in insurance is still mostly under the radar right now, but it’s affecting pricing and how agents work with their clients.
Author: Frank Pennachio, Co-Founder at Oceanus Partners