The challenges faced by the insurance industry are same as other companies. Insurance industry involves generating, storing, and making large & complex sets of data to create efficiencies and improving their bottom line. In a recent survey, 54% of 48 U.S. and P/C insurance executives said they use predictive modelling for underwriting/risk selection, and that usage is expected to grow by 40% over the next two years. Predictive modeling helps in claims triage, underwriting appetite and strategy, market-share analysis, and litigation propensity. Predictive analytics can boost companies' profitability by: 1. Developing a clear analytics roadmap across business units.
2. Monitoring their outputs against what is happening to avoid the situation where underwriters push back on predictive models.
3. Developing an enterprise-wide model monitoring program to ensure models are recent and recalibrated on a consistent basis.
4. Looking outside the industry to see how other organizations measure ROI.
For more read the article written by Loren Trimble and Michael Kim(Contributors) : http://ww2.cfo.com/risk-management/2016/03/predictive-modeling-can-make-insurers-better-risk-managers/