Which of the following statements about insurance companies using big data is true?

Insurance companies utilize big data primarily for actuarial analysis to evaluate risks, making it a crucial element in their operations. By analyzing vast amounts of data, insurers can assess the likelihood of various events, such as accidents or natural disasters, and price premiums accordingly. This process involves understanding patterns, trends, and correlations in data that help predict potential claims, optimize underwriting processes, and ultimately enhance overall financial stability.

In contrast, the other options do not accurately reflect the comprehensive use of big data in the insurance industry. The idea that big data has no impact on understanding customer needs overlooks the insights derived from customer behavior and preferences that can inform product development and customer service strategies. Suggesting that data is used exclusively for marketing purposes underestimates its role in risk assessment and operational efficiency. Lastly, indicating that insurers rely solely on customer feedback ignores the broader analytical capabilities afforded by big data, which includes predictive modeling and risk stratification derived from quantitative data. Thus, the assertion that they use data for actuarial analysis captures the essence of how they integrate big data into their risk evaluation practices effectively.