With the evolution of ERM and new risk management techniques, organizations are now using big data to better analyze past data and current occurrences to predict and prevent loss simultaneously.
The risk management evolution is fueled by big data. Big data is described as “extremely large data sets.” These data sets are too large to be analyzed by traditional and manual methods; the large data sets are analyzed using computers to reveal patterns and trends. Big data improves all aspects of the insurer’s business. This large amount of analyzable data helps the insurer to better predict claims, better manage new trends, and better price insurance.
Big data has revolutionized risk management improving three primary areas of data and technology. We will cover each of these in the subsequent pages of this unit:
- Analyzing data
- Capturing data
- Storing data