Analytics and big data are the flavour of the season and every educational institution worth its name has introduced courses around them. Magazines, books, articles are flooded with information on the use of analytics and the harnessing of big data.

Analytics is the process of gathering together huge chunks of data and then drawing business insight using various models and tools. Analytics helps companies and businesses to make better informed decisions and there is a huge demand for data analyst/scientists in today’s world.

Reading the recent books on big data and going through the syllabi of analytics courses offered by various business schools across the globe, the use of big data in marketing and sales, banking and engineering is evident. Customer analytics, social media analytics and many other forms of analytics such as cloud analytics, web analytics, channel analytics and content analytics, also find their way into the course contents.

However, the missing link is insurance analytics. Insurance is one of the most data intensive industries. Historically actuaries and underwriters have always dealt with large data sets and have used these to make decisions. But in spite of this, insurance analytics rarely features on the business school curriculum. Financial analytics courses tend to be focused on the stock and bond markets and while there are elements of fraud analytics and visualisation in a number of courses, none of them teach these techniques with application to the insurance industry. Even insurance specific courses in business schools lack focus on analytics.

It is time that business schools recognise that there needs to be specialised courses on insurance analytics. In fact schools should go further and each line of business in insurance should be a module in itself for the purpose of analytics. For example, motor insurance, its issues and the kind of analytics it warrants is very different from life insurance. Similarly, health insurance has its own issues which are very different from fire or marine insurance.

According to a report by PwC on ‘Top Insurance Industry Issues 2014’ one of the most significant issues faced by the insurance companies is data analytics. The insurance sector lacks data scientists, even though it has access to pools of data, it is unable to turn that data into advantage.

A lack of skilled analysts in this sector is preventing the insurance industry from advancing. This is especially true in emerging countries where insurance penetration is low and the use of analytics is far more important, both as a means of capturing and creating markets as well as a tool to help underwriters who are having to make decisions with limited information about risks.

Business schools need to recognise the potential of this untapped market and contribute to the development of this sector by offering courses on insurance analytics. Not only would the insurance sector benefit, but this would also be good economics for business schools. Currently there is a huge demand for insurance analytics, but as yet only a handful of suppliers.

Failure to act will mean that business school students who enter the insurance sector will be ill-equipped to deal with insurance in the 21st century.

Nupur Pavan Bang is head-analytics at the Insurance Information Bureau of India and Saumya Rastogi is senior analyst with ADP India Pvt.

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