Predictive Analytics
Why you need it.
Why you can't afford to do business without it.
The hard market cycle of property and casualty rate increases from 2001 to 2004 is over. While industry indicators show that rates have increased for both property and general liability lines in the first quarter of 2006, the overall property and casualty insurance market is softening. Carriers are concerned about a wholesale return to a soft market given the downward spiral of premiums, and the market-following behavior it implies. They also recognize a fundamental shift currently occurring in the marketplace, and are concerned about being left behind in the search for a competitive advantage.
One of the key success factors emerging for insurance companies today lies in a carrier's ability to assess risk. Not only assess risk, but also assess it as accurately, and, when possible, more accurately than their competitors - and then price that risk appropriately.
Beyond this focus on pricing precision is an increased emphasis on the ease of doing business for agents. There is a desire for quality growth that adheres to current profitability guidelines. This means an increase in the automated processing of insurance transactions - whether it be new business, policy changes or renewals. As a result, carriers are looking closer at predictive analytics in order to develop fact-based business models, streamline manual operations and drive sound business decisions. Are you ready to put the power of predictive analytics to work? The integration of predictive analytics into your business processes and strategies will allow you to improve core business decisions - and ultimately increase profitability.
"By 2015 one-half of the life insurers and one-third of the P&C insurers currently in business will be gone. They will have been either swallowed up by winning insurers or other financial services firms, or will be placed into history books, surviving only as case study discussion material. The winners will be the insurers who quickly move up the learning curve of using information to compete."
- Barry Rabkin, senior research analyst, insurance, at Financial Insight, Insurance Networking News, July 2006
