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Data Analytics for the Insurance Industry
Faheem Shakeel
Faheem Shakeel Updated on Jan 20, 2022  |  3 Min Read

In today’s time, it is imperative for every sector to focus not only on better data handling solutions, but also steadfast the use of the data that is long untamed. The findings of a study indicate that data-driven organizations are 23 times more likely to acquire customers than their peers.

Insurance is a data-driven industry. Every day there are new players in the competition and each one of them has a mine of data, but only the ones converting that data into useful insights can make it a gold mine. According to the findings of a recent study, 86% of insurance companies are working on Insurance data analytics mechanisms for optimum predictions of big data reports.

According to a predictive analytics report, current investment in predictive analytics of the Individual Life and Individual Health ecosystem is 70 percent and 40 percent respectively, which is assumed to grow up to 90 percent and 80 percent in just the next two years.

Business Analytics in Insurance

This is the power of data that is being used as a source of energy today. But this source of data needs to be unleashed to its full power by procuring insights that will help the insurance companies achieve their long-term goals.

If advanced analytics in insurance is leveraged appropriately, it can revolutionize the insurance business.

Use of Business Analytics in Insurance

insurance data analytics

How does Data Analytics Benefit Insurers?

Insurance companies using data analytics solutions have witnessed significant improvements in decision-making, business intelligence, customer conversion, etc. The key benefits offered by data analytics are:

1. Generating More Leads

In the age of competition, every insurer is facing difficulty competing with the internet. In this scenario, the unstructured data available on the web is an unchained source of lead generation. Insurance data analytics of such unstructured data provides you a deep dive into the customer behavior and market opportunities to up-sell and cross-sell.

2. Improving Customer Satisfaction

An insurance company that can correctly predict the needs of the prospective customers by looking through data trends has much more potential to make the sale than an insurance company just using conventional methods of selling. Analysis of the existing customer data can also offer prescriptive insights in improving customer satisfaction.

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3. Mitigating Claims Fraud

Claims fraud continues to be a major challenge in the insurance sector. However, insurance companies using data analytics have seen considerable improvements in their fraud detection process. With the application of data analytics, insurance claims fraud detection and prediction becomes speedier and more accurate. For example, the history of fraudulent cases is stored in the data trends of an insurance company and while processing any claim, the insurers can carefully check if the trend is repeated. This, in turn, helps reduce the act of fraud.

4. Predicting Accurate Risk for Underwriting

Underwriting is a complex task for insurers and it can be simplified through insurance underwriting analytics. For example, the data trend would predict a higher premium for a customer who has been engaged in rough driving than that of a customer whose data trend predicts a lesser risk profile.

5. Enabling Business Growth

One of the important elements of the Insurance domain is quantifying the levels of risk which is best done by procurement of analysis of useful data available. In this way, Insurance data analytics acts as an engine to the growth of Insurance companies with its capability in predictive analysis of big data.

Conclusion

The emerging leaders of the insurance sector are leveraging insurance data analytics while making decisions concerning pricing strategies and risk selection. The new-gen technology is working progressively for deploying prescriptive methods of procuring deep insights from the big data in various insurance-related transactions like underwriting, claims management, customer satisfaction, and policy administration to ensure better predictive analysis. This enables insurance companies to portray analytical decision-making in all their internal processes and business transactions.

Faheem Shakeel

A specialist in Insurance Technology and services with over 15 years of experience in Software Development, Solution Delivery, Project Management and Business Consulting around Insurtech space. Built market leading COTS Insurance Platforms and successfully implemented for the insurers across the USA, UK, Caribbean Island & Indian subcontinent.

Faheem Shakeel Head - Insurance Practice

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