How Predictive Analytics Impacts Insurance Underwriting

Insurance CIO Outlook | Thursday, June 25, 2020

Insurers can leverage predictive analytics to enhance the efficacy of underwriting.

FREMONT, CA: Technology and innovative solutions are constantly transforming the insurance industry. With the onset of the technology boom, the insurance landscape has changed a lot in the past few years. Data science has significantly impacted the insurance industry. Researchers are combining the advancements in data science with innovation in analytics to give rise to make the most out of predictive analytics. Predictive analytics in insurance has helped streamline the way insurers process claims, data, and manage customers. Underwriting is one such branch of insurance that has gained significantly from predictive analytics. Here are the ways in which various aspects of underwriting can benefit from predictive analytics.

The proliferation of Predictive Analytics

Predictive analytics has been used in insurance underwriting for quite some time now. Insurers are researching the use-cases of predictive analytics across the various underwriting aspects. Despite the technology’s potential, actuaries are the ones to benefit from predictive analytics largely. The trend is set to change as the promise of future investments into the technology looms large.

Enhanced Underwriting Efficiency

The application of predictive analytics may not eliminate components of the underwriting process, but instead, enhance the efficiency of how those elements are reviewed. Instead of simply automating the review of documents, predictive analytics streamlines the process to improve underwriting accuracy and efficiency.

Predictive Analytics for Accelerated Underwriting

According to a report, accelerated underwriting is being used by most insurers. However, its actual potential can be realized with the aid of predictive analytics. The technology can propel the insurers to make a faster decision with a considerable level of accuracy. Thus, accelerated underwriting, which thrives on speed and accuracy, can significantly benefit from predictive analytics.

Predictive analytics is being viewed as an opportunity by the insurers who are eyeing to overcome the overheads involved in the underwriting process.

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