What is predictive analytics in P&C insurance?
By collecting data from internal and external sources, predictive analytics in P&C insurance can help carriers foresee the future and understand potential behaviors, sentiment, trends and actions of the customers they insure. In addition, predictive analytics in P&C insurance can help carriers to convert insights gained from customer-agent interactions, telematics, and even social media into credible foresights. As a result, carriers can gain deeper insights into their customers’ preferences and make better informed business decisions.
What are the business benefits of predictive analytics in P&C insurance?
Predictive analytics in P&C insurance provides a number of benefits:
- Fraud reduction: In some cases, predictive analytics in P&C insurance can help providers identify those likely to commit insurance fraud ahead of time. It is also possible to gather and analyze data from social media after a claim has been settled. By reducing the human resources needed to identify and track possible fraud, detection becomes more efficient, lowering annual claims payouts and reducing the need to increase premiums.
- Lower customer churn: Predictive analytics in P&C insurance can help identify customers who are unhappy with their carrier or coverage, promoting actions to prevent churn, including personal contact from an agent or perhaps making a special offer. Personalized service is often all it takes to retain a customer.
- Increased customer satisfaction: Because the number of false positives identified and pursued is minimized for claims submitted, the time it takes to process claims can be reduced with predictive analytics in P&C insurance. Faster resolution is a key factor in high customer satisfaction and retention.
- Better business operations: Claims processing and underwriting can both be made more efficient through predictive analytics. In addition to helping employees be more productive, predictive analytics in P&C insurance can reduce fraud and minimize loss adjustment expenses, which helps the bottom line.
- Identify trends and new opportunities faster: With the capability to acquire and process more data, predictive analytics tools can help identify new markets, new opportunities in existing markets, as well as changing customer preferences and needs. As a result, P&C insurers can develop new products and establish leadership positions to provide a competitive edge.