2. Claim Payment Automation Modeling
Many insurance claims require a manual inspection to assess the damage, leading to a long wait for a payout. It can cause claim amounts to spike out of control, a significant drop in customer satisfaction, and a potential decrease in retention rates.
End-User Value
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The above dashboard shows the top 5 Policies in which customer investment is maximum and the age group from which we can generate maximum revenue.
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So this helps insurance companies to understand which policies are more in demand for a particular age.
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We can increase customer satisfaction through this, and claims are made more quickly and efficiently.
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Hence, users can be confident in how much to reserve for incurred But Not Reported (IBNR) loss amounts.
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The user will build more robust and accurate pricing models Using the predicted developed loss for each claim as the dependent variable.
3. Claim Development Modeling
The claim amount can change drastically from an insurance claim's initial filing to full payment. Hence the ability to predict the final claim amount significantly impacts financial statements, specifically the reserves and IBNR amounts reported in Quarterly Earning statements.
End-User Value
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An extremely accurate and automatic predictive model can be built to understand better how much a claim will ultimately cost.
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The above dashboard shows which policy grabs the maximum number of customers from different age groups.
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It also shows the trend in the number of claims over a year. So this helps them to predict the future and also helps to give the best recommendation according to customers' needs.
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4. Life insurance undertaking for impaired life Customers
Life insurance companies do not underwrite customers who suffer from serious diseases; thus, doing so would require a long and expensive medical assessment process.
End-User Value
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A life reinsurer can use medical history and conditions to predict the risk of underwriting a serious disease survivor accurately.
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The insurer can identify which customers have good health prospects and directly underwrite them without further assessment, leading to more customers and reduced medical costs.
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As we can see above, clients with blood cancer have maximum chances of dying.
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The person on stage 3 or 4 also has a chance of dying soon. But we can compare that the death rate decreases with time, so it will be safe to offer cancer patients.
5. Fraudulent Claim Modeling
Fraudulent claims are too expensive and inefficient to investigate every claim. Moreover, investigating innocent customers could be a bad experience for the insured, leading some to leave the business.
End-User Value
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Predictive modeling in insurance industry can be used to identify and prioritize likely fraudulent activity.
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As shown in the dashboard, we know from which age group maximum frauds are detected.
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By using this particular incident and occupation, maximum fraud happened. It helps in two folds.
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Resources will be deployed where users see the greatest return on their investigative investment.
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Moreover, an insurer can optimize customer satisfaction by not challenging innocent claims.
Conclusion
The use of big insurance data analytics in the insurance industry is rising. Insurance companies invested $3.6 billion in 2021. Companies that invested in big data analytics have seen 30%more efficiency, 40% to 70% cost savings, and a 60%increase in fraud detection rates. Both the customers and companies benefit from these solutions, allowing insurance companies to target their customers more precisely.
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