The COVID-19 pandemic hit investor confidence and halted business, which led to investments into big data declining, but it is a temporary decline and the theme remains critical to insurance, according to GlobalData, a leading data and analytics company.
GlobalData’s latest report, ‘Thematic Research: Big Data in insurance’, reveals that the value and volume of investment deals in the analytics theme in insurance dropped in 2020 after reaching record highs in both categories in 2019. This was heavily influenced by COVID-19, with economies around the world grinding to a halt and investor confidence dropping to extremely low levels. However, Q1 2020 saw the second-highest number of deals completed on record (33) at that point, while Q4 2019 registered the second-highest total deal value on record at $960.1m.
Ben Carey-Evans, Insurance Analyst at GlobalData, comments: “The high number of deals completed in Q1 and especially Q4 2020 indicates that interest and developments in the analytics theme is set to pick up. Investment in the theme was showing strong growth before the pandemic, and a spike in activity in Q4 2020 suggests investor confidence is picking up.
“Big data is already heavily used in health and motor insurance, with consumers more accustomed to the tradeoff between giving access to personal data for cheaper premiums in these lines. Activity trackers in health lead to consumers being rewarded for increased exercise, while telematics is relatively mainstream in motor insurance and rewards good driving behavior. As businesses and personal budgets are squeezed while we leave the pandemic customers are likely to be more prepared to trade personal data for cheaper premiums, which will increase the importance of big data and analytics in insurance.”
