Analytics inform decisions about future investment, identify high-priority as well as low-value customers and help streamline businesses, among other benefits. Gaining insights into an organization’s own data and having the capacity to perform deep analytics on complicated datasets have never been more crucial — or provided greater potential for competitive advantage. New analytics tools enable data insight for insurers and enhance understanding of what is happening in their businesses in real-time. This awareness, in turn, drives more profitable and sustainable growth.
Pricing and risk modeling
In insurance, the classic use case for analytics has been to provide vital information for decisions about risk modeling and pricing. The principal role of an actuary is to assess risk, which later determines the entire pricing structure for insurance company products. Analytics help provide a complete picture of any given situation for actuaries.
However, as additional and more complicated data input streams for insurers continue to come online, such as data from the Internet of Things, connected vehicles, customer service chatbots, etc., analytics become even more pivotal for making sense of new, disparate information and harnessing it to make effective risk and pricing decisions.
Attrition prediction and customer loyalty
With customer behavior ever more fickle and consumer choice increasing across the insurance industry, predicting customer attrition and improving consumer loyalty have never been more important. Evaluating which customers are at risk of dropping a policy — and why and when — can determine whether financial and growth goals remain on target or fall short.
Analytics that provide information about this type of customer behavior help insurers target at-risk customers with retention campaigns that can salvage a customer relationship before it’s severed permanently. Then, analytics can assist with testing which type of loyalty campaigns have the best impact, as consumers have come to expect loyalty reward programs, personalized one-on-one attention, bundle discounts and other benefits from their service providers.
Fraud is an unfortunate and growing reality for the insurance industry, costing insurers nearly $100b per year. Tools that ferret out and mitigate the impact of fraud can substantially bolster the bottom line. Advanced analytics play an increasingly important role in this detection, uncovering anomalous patterns that can flag a potential fraud attempt.
New analytics tools furnishing deep claim analysis, social media surveillance, text mining, previous denial of claims, etc. can all lead to a trigger which alerts an experienced fraud specialist for more expert investigation.
Outlier events are of increasing concern to insurers. Erratic consumer behavior, unusual catastrophic property and casualty incidents, cyber risk, volatile political contexts, etc. are all contributing to normalizing risk that previously would be considered negligibly infrequent. For example, previously once-in-a-lifetime climatic events are now occurring with increasing regularity due to climate change.
Insurers that apply deep analytics to finding new patterns not just within their own customer data but also by combining and synthesizing information with publicly-available data sources are at a competitive advantage.
DRC Analytics Empower Your Organization
DRC Analytics democratize data and empower all users to glean meaningful, actionable insights. DRC Analytics provide data insights which allow you to:
- Create customizable dashboards visualizing insights based on preferences and requirements
- Build recommendation panels highlighting relevant up-to-date insights
- Cross-reference panels providing deeper insights and a comprehensive overview
- Export data to PDF or Excel®️ to share reports with other decision-makers
- Create automated, dynamic, reports and visualizations based on real-time data
DRC Analytics help insurers of all sizes better understand what’s happening in their businesses, determine how to allocate resources and take advantage of new opportunities. DRC works closely with each client to load the relevant data and personalize the managed content dashboards, ensuring quick startup and speedy results to stay a step ahead of the competition.
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