Throughout the ages humans have felt a compelling need to record information about themselves or the world around them. From the prehistoric cave paintings depicting humans hunting, to early Egyptian stone-carved hieroglyphics and ancient painted pottery, our ancestors left information for posterity even before a sophisticated writing system was developed. We know a great deal about the past from the information that has been passed on over thousands of years. Unfortunately, valuable records have also not survived man's propensity for mindless destruction and much knowledge has been lost to history such as the libraries at Alexandria, Antioch, Granada and Baghdad. Still, where gaps in historical knowledge existed, scholars have attempted to chronicle the past with whatever fragments were available; unsurprisingly, not without subjectivity but no less admirably. Indeed, when one considers that some ancient sources were written hundreds of years after the event, it would be impossible to record historical information without conjecture.

Brave New World

Enter the age of digital data. We live in an age where the spread of information is not only global and instantaneous through internet news and social media channels (including Facebook, Google, Twitter, LinkedIn) but where the number of devices connected to the internet now surpasses the size of the human population. Our ability to predict an unknown future event (which, by definition, may never happen) can be enriched by the historical data available. The more data that exists, the higher the level of confidence we would have about the range of possible future outcomes and their impact. There is already a vast amount of digital information about every aspect of life. This includes granular data about how we live, think and behave. Although we have yet to harness the full power of data, we are in the throes of the greatest technological revolution the world has ever seen. In the not too distant future, self-learning machines will be able to capture all the information connected to computer systems around the world and dive deep into data for multiple purposes - social, business, legal, medical and much more. Companies that lead the way will establish dominance in their respective fields for years to come, whilst those that fail to keep abreast with new technology will face an uncertain future. In this new age, businesses that invest in technology and human capital will grow beyond anything they could have expected to achieve otherwise. Similarly, the most successful businessmen of the future might have no less entrepreneurial flair but they are more likely to put technology at the heart of strategic decision-making than at any time in the past.

It is not difficult to see why those that use computer models to obtain a better understanding of historical data will achieve a competitive advantage over those that do not. Data experience gives a lender insight into the likelihood of default and they can price lending accordingly. It can better inform an insurer about how to assess risk, where to underwrite profitably and what segments of the market to avoid. Companies trading in the international financial markets can granulate data to spot a price arbitrage that the rest of the market does not see. Retailers, car manufacturers, healthcare providers and local authorities will all be able to learn more from data than was previously thought possible. The opportunities are boundless and the richest multinationals of the future will warehouse the largest amount of data in existence. To put it into context, a database which held as much data about the past 200 years as we now have about the last 20 would be the most valuable commodity in the world.

Governments and companies of the future will employ data scientists to analyse data like scholars would study an archaeological site. Of course, no data is infallible. Data, like fragments from the ancient world, is a record of the past that is open to the same subjectivity and no less conjecture. But the difference is that the data scientists of tomorrow will have far more data at their disposal than historians have ever had from which to analyse the past and make confident predictions about the future. So too will we see considerable economic development opportunities for relatively small countries and cities that embrace high-tech centres of excellence and digital industries in much the same way as financial services and gaming have in the past helped to transform economies around the world and generated thousands of local jobs. Digital industries will grow rapidly in importance as other areas of economic activity decline.

Big Data and Insurance

Although the big data revolution will affect all businesses, I can see some of the greatest opportunities in the retail insurance sector (especially in personal lines, life and medical insurance). As would be expected, insurers hold a great deal of information on all aspects of their insurance business including about claims, policyholders, renewals, underwriting performance and more. In the future the most successful underwriters in direct business will be those with the deepest understanding of data and not just able to respond the fastest to market trends and pricing but proactively lead the market. Insurers will no longer simply talk about rating factors (which indeed are common to all insurers in one form or another); they must also be able to granulate data to include an assessment of all individual perils within a single risk. That is the future of underwriting. Moreover, in a challenging environment where low interest rates will continue for several years still, insurers are likely to focus more on investment performance (and not just underwriting) and here investment modelling and analytics that use data to a greater degree than at any time in the past will play an increasingly important role in the business. The market leaders of tomorrow are those insurers with the ambition to grasp the big data opportunity with both hands. The smaller (but only in terms of their share of the market in which they operate) insurance companies that remain flexible and able to innovate will benefit the most. At the same time, Solvency 2 will raise the barrier to entry for anyone looking at the insurance market who is not already involved in the sector in some way (at least as a provider of capital or as part of a group with an insurance business). The largest international insurers clearly have an interest in keeping abreast of these technological developments if they are to replicate the successes of the past and those that fail to reposition themselves will soon see any historical commercial advantage challenged by their smaller and more agile competitors.

The Past, a Crossroad to the Future

We may be witnessing one of the greatest advancements in the field of human endeavour. Greek advances in knowledge could well be the only parallel in human history. Whether conquering hero or blood-thirsty tyrant, whatever one's view of Alexander the Great might be, it is an indisputable fact that Greek became the language of scholars across the Hellenic world spreading Greek ideas and accelerating learning in the sciences, maths, engineering, philosophy, arts and medicine. But valuable knowledge was lost with the fall of the Roman Empire and much of what survived was not seen again until the Italian Renaissance over a thousand years later. It makes you wonder what the world would be like today if Greek civilisation, as it spread east and west to the outer edges of the known world, had developed technology for the storage and reproduction of information at a large scale, not just the great library at Alexandria with its stored papyrus manuscripts. The closest thing we know of is the Greek invention of a highly sophisticated mechanical machine with astrological knowledge built into it capable of predicting past and future planetary positions known as the Antikythera mechanism (a precursor to the first computer), which itself was only recovered from an ancient shipwreck in 1900.

As to what would have happened and when, we will never know but if more information and knowledge had survived throughout the ages, it is possible (if not probable) that modern technology would have been invented hundreds of years before our time and manned space travel would no longer be a thing of the future. Today, the internet has created the greatest depository of information the world has ever seen, without geographical boundaries. Knowledge is no longer the exclusive commodity of the wealthy or of a particular social or educated class (as was the case for most of the preceding 2,500 years of our history). At the current pace of technological advancement and in the not to distant future, how we look at information will also change immeasurably.


Nigel Feetham is a partner at Hassans and Visiting Professor at Nottingham Law School, Nottingham Trent University. Nigel is also the author or co-author of a number of books, including Protected Cell Companies: a Guide to their Implementation and Use (2nd edition). His professional and academic interests include the use of predictive analytics in decision-making. September 2014. All rights Reserved

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