We continue our focus on the insurance industry this week striving to further clarify why Location Intelligence is making such an impact in that vertical. And on that topic I was talking with David Sonnen, Senior Analyst of IDC earlier in the week and asked him for his thoughts. David reflected that with the economic recovery kicking in the insurance risk management teams are really digging into the details to make sure the overall system break down and recent meltdown does not occur again. In doing so they are seeing that knowing where stuff is, at a much more granular level is one of the key factors. Instead of doing risk profiles at state or county levels, many of the insurance companies are targeting right down to the property level. This is ambitious, but it drives the need for a lot of what Location Intelligence has to offer in terms of knowing property specific info, neighbourhood info and boundary or risk scores at that level of detail. Bottom line for David is "it's not about location really; it's about risk management. Location Intelligence, because of what it offers, is along for the ride."
As we chatted, David also brought up another real interesting point as he noted that this thirst for detail is spreading in many other ways. One of the strategic view areas is what David called "big data". What is big data? "It's the digital steam rising off of the planet" he stated. (I love that vision!) Big data refers to the growing realization among strategic thinkers, including the insurance companies, that there is a lot of digital data out there that can be found unobtrusively and used in good business decisioning. All of this type of data David refers to has geographic or location attributions. He is referring to cell phone data, GPS tracks, what is concerning a community info, crime rates, police info, and news info. It's about a situational awareness of what's going on at more granular levels like communities or neighbourhoods. David predicts that this big data phenomenon is going to help companies understand the relationship between people and their locations based on the trends and patterns in ubiquitous digital information, i.e. the digital steam rising.
I concur with David on both points. It really is about risk management in insurance. The clients we work with would say the exact same thing. And David is not alone in the outlook that more and more data is going to be analyzed (big data) and at significantly more granular levels. All this will lead to better business decisions.
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