P&C Insurers Now Turning to Predictive Modeling for Answers

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  • In the past several years, many insurance agents working in the property and casualty sector may have had difficulties in dealing with claims issues and other questions from clients about the ways in which they were covered. Now, it seems as though more companies operating in this field are using new ways to handle not only underwriting and pricing, but claims management as well, and this may help agents to deal with any queries they face.

    Today, the vast majority of insurance companies with a hand in just about every facet of the P&C business say that they use predictive modeling to better ensure that they’re safeguarding themselves in a number of ways, according to a new poll from Towers Watson. However, they are not all using them in the same way, as many are using data and analytics to identify specific parts of their businesses that might need a little more attention. Even beyond that, the way in which that information is used can vary widely depending on the type of coverage being offered, and even the size of the insurer in question.

    “The survey demonstrates a real willingness by carriers to embrace predictive modeling programs, but in many instances, the actual investment in, or execution to establish these frameworks, has been incomplete or targeted to specific business lines or operational needs,” said Brian Stoll, director of P&C practice at Towers Watson. “It could be due to the financial crisis that insurers put many investments on hold and renewed focus on the expense side of the balance sheet, or maybe a narrow vision of predictive modeling’s applications and potential.”

    Why company size matters
    Of course, when it comes to how insurers use such data, their size is very important: Larger ones, with more resources, tend to use analytics more than their smaller competitors, the report said. Most of the smaller companies still rely on them when necessary, but instead try to differentiate themselves from the rest of the market by highlighting the ways in which they can pay more personal attention to clients than larger market participants. For their part, big insurers tend to use analytics as a means of shoring up their financial standing overall.

    As such, today’s insurance agents working for companies of any size may need to do more to concentrate on client needs in order to gain a competitive edge. The more personal the touch, the more loyal a consumer is likely to feel to an agent or company itself.