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The amount of data we create comes to 2.5 quintillion bytes of data a day--so much that 90 percent of the data in the world today has been created in the last two years alone, according to IBM.

This data, known as "big data," comes from all kinds of places, according to IBM. These include: sensors used to gather climate information; posts to social media sites; digital pictures and videos posted online; transaction records of online purchases; and from cell phone GPS signals.

-- 30 billion pieces of content are shared on Facebook every month.

-- 235 terabytes of data were collected by the U.S. Library of Congress in April 2011.

-- 15 out of 17 sectors in the United States have more data stored per company than the U.S. Library of Congress.

In the insurance industry, there is interest in the possibilities of big data--especially information pulled from social media sites--and the ways the industry could use it to improve underwriting and to detect fraudulent claims.

"There's lots of data out there, some of it knowingly placed in play by individuals and companies," said Craig Weber, senior vice president at research and consulting firm Celent. "So the question is, can we leverage that? Should we leverage that? What are the implications for the brand?"

Weber's colleague in the United Kingdom, Craig Beattie said, "I can't imagine there isn't an insurer or someone with actuarial background that isn't thinking about this."

In the not too distant future, we could see quotes for automobile insurance based on an individual's behavior using information pulled from social media.

When it comes to claims, some insurers are already using data from social media sources to detect fraud. Analysis of big data might bring additional benefits. Two issues, however, have been obstacles: the technology to store and analyze the data and privacy concerns.

On the technology front, pieces are falling into place.

Google, for instance, released its entire search algorithm a few years ago to the open source community. Yahoo open sourced Hadoop, a framework for big data processing. Data storage and computing power are now available at a relatively low cost on Amazon's cloud platform.

LexisNexis, meanwhile, in June open sourced its data intensive supercomputing platform, which is seen as an alternative to Hadoop. SAS Institute and IBM also offer enterprise-class analytics capabilities.

While technology keeps moving forward, there are questions about what information should be used.

Insurers worry about the potential negative consequences of using social media data and don't want to find themselves with a public relations crisis or in a legal or regulatory mess.

A lot of social media users, however, share a lot of information, either failing to turn on their privacy settings or choosing not to do so. Businesses, for their part, are more than happy to have consumers share information with them and even offer incentives for them to do so.

This may work for fast-food joints offering cheap eats. But will it work for an insurer? Insurers are giving it a lot of thought.

PATRICIA VOWINKEL has worked for national media outlets for more than 20 years.

September 15, 2011

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