A recent article in PEO Compass (www.http://peocompass.com), authored by Rick Kirsch, discussed the use of Big Data by insurance carriers as being a potentially disruptive technology. Big Data is the buzz word for accumulating large pools of data and having the ability to manage, coordinate and analyze the various pieces. A well defined Big Data strategy allows carriers to better analyze risk (losses and potential losses) and price that risk accordingly. Since premiums (price) is a function of risk a better informed carrier can reduce price when the market perception of risk is overstated and capture market shar
e. Conversely, when risk is greater then the market perception a carrier may require higher premiums or limit its new business underwriting therefore limiting its losses. Big Data is a powerful tool.Although SMP views the use of Big Data analytics by insurance carriers as a positive contribution to the overall health of the industry SMP recognizes that the proper data inputs are mandatory to the proper data outputs.
SMP Consulting Group specializes in Workers Compensation Audits and assuring the data inputs including classification codes and loss runs (an important input when calculating MOD) are accurate.
For further information please visit www.smpconsultinggroup.com
