Insuranceciooutlook

3 Ways Insurance Industry Makes Better Use of Data Analytics

By Insurance CIO Outlook | Tuesday, August 13, 2019

Insurance Industry The aim of applying data analytics in the insurance industry is to optimize marketing strategies, improve business, enhance revenue, and reduce costs.

FREEMONT, CA: Several years of accelerating investment in data and data analytics are transforming the insurance industry. To be accurate, data science is one of the historical pillars of insurance. Insurers are becoming more relevant to their customers and more efficient, by realizing the strategic importance of their data investments. Insurers want to harness data analytics to improve customer experience significantly while cutting claims handling time and costs and eliminating fraud. Below are top data science use cases in the industry which cover various activities.

· Fraud Detection

Insurance fraud can bring substantial financial loss to insurance companies, and data science platforms and software can detect fraudulent activity, suspicious links and subtle behavior patterns using multiple techniques. To make this possible, the algorithms should be fed with a constant flow of data. These models rely on the historical cases of fraudulent activity and apply sampling method to analyze them. Besides, predictive modeling techniques are used for the analysis and filtering of fraud instances.

· Price Optimization

Price optimization is a complex notion and uses numerous combinations of various methods and algorithms. This process combines the data not related to the expected costs and risk features, loss and expenses, and further analysis. It considers the changes in comparison to the previous year and policy. Hence price optimization is related to the customers’ price sensitivity. Price optimization helps to increase the customer’s loyalty and comes with a maximization of profit and income.

· Personalization

Customers always like personalized and relevant insurance experiences that would match their requirements and expectations. Insurers face the challenge of assuring digital communication with their customers to meet these demands. Highly personalized and relevant insurance experiences are guaranteed with the help of artificial intelligence and advanced analytics, which extracts the insights from a vast amount of data.

Modern technologies are moving extremely fast, making their ways into various fields of the business.

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