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Predictive Analytics Has Potential to Solve Insurance Pain Points Posted on : May 22 - 2015

Since the first actuarial profession began in 1762, analytics has been an integral part of business decisions in the insurance industry. With the advancements in technology, data availability and development of innovative analytical techniques, analytics has increasingly played a significant role in how insurance businesses function.

There is currently a major evolution going on in the analytics available to and used by insurance companies all over the world. Analytics is moving from a reactive model that was able to support existing business decisions and verify existing actuarial analysis to a new predictive, proactive approach that can improve business by optimizing processes before events happen.

This shift is essentially the next stage in the maturity of analytics – predictive modeling and analytics – according to thought leaders at the Workplace Safety and Insurance Board (WSIB).

“Predictive analytics has become an essential requirement of an insurance company; it is no longer something that’s just ‘nice’ to have,” said Eugene Wen, WSIB Vice President and Chief Statistician. “From the senior executive perspectives, we must support predictive analytics as part of the long-term investment strategy. It is our responsibility to finance predictive analytics and bring its new modeling techniques to the front line so they can improve daily business decisions.”

 

“Whenever new technology becomes available, it offers opportunities to change the way we do things, and its adoption separates the trailblazers from those that get left behind. The time for predictive analytics is now,” said Wen. In the recent years, most insurance companies have invested in new technology to some degree but, at this time, they are at different stages. Some are in advanced usage mode while others are still in their early stages of adopting and applying analytics. View more