Predictive analytics is becoming more accepted in modern Property & Casualty insurers. Business leaders in all areas of the business must be able to identify and implement the critical items that will enable their functions to be competitive and deliver profitable growth.
Marketing has traditionally relied on hit and miss referrals from agents or other sources to advance the business. Predictive analytics can provide insights into potential customers and captive and non-captive agencies and their selling habits.
Underwriting and Pricing
The most common area of use for predictive analytics is in underwriting and risk selection, here predictive analytics has evolved to improve the prediction of pricing and future losses. This allows the underwriter to “filter out” the normal underwriting cases and focus on the exceptions to the human underwriter. By automating this process, underwriters are spending less and less time screening potential applicants that would pass the underwriting screening. Instead, they are focusing on potential cases where an application would disqualify an individual, thereby resulting in only quality applicants that meet the underwriting guidelines.
By using our scoring process, a claims department can identify the claims that need specific attention, thereby allocating claim managers to focus on these claims or allocate claim managers based on their experience and skills.
Fraud and Abuse
Predictive analytics can also be used to prioritize claims by looking at past trends where a submitted claim has resulted in a higher loss amount compared to your own internal claims history, or identify anomalous patterns of claims.