Predictive analytics uses statistical and analytical techniques to develop predictive models that enable accurate predictions about future outcomes. Predictive models can take various forms, with most models generating a probability that represents the likelihood a given future scenario will occur.
Predictive Analytics not only reveal and measure what is driving cost, they also reveal why an insured is having these results. Understanding the ‘why’ allows us to collaborate with our insureds and focus on the cost drivers and contributing factors to claim costs.
Pricing advantages for better risks: When insureds provide underwriters with analytics and financial analysis to give justification for a premium credit, they will receive optimal insurance pricing.
More relevant, individualized policy reviews: Instead of making wholesale judgments about certain types of businesses or industries, underwriters using more relevant data make better-informed decisions on individual risks. With predictive analytics an underwriter can discern that Company A is a better risk than Company B and price accordingly.