A large number of organizations are now turning towards advanced analytics in order to seek solutions to their ever increasing organizational problems. Moreover, organizations are now facing intense competition; understanding the consumer needs is the key to gaining success. Like other industries, the insurance industry is now releasing the benefits of using analytics for crafting products, segmenting markets, creating unique distribution strategies, handling inforce business, making assumptions for financial reporting and developing metrics for risk management.
Traditionally, insurance companies achieved an edge over their competitors through their underwriting expertise. With a plethora of claims coming over each passing day, insurance agents do not have time to go through each and every claim in detail and missing out on a valuable piece of information may lead to inaccuracy. But, this phase is about to change; distinctive use of insurance analytics and creative sourcing of data will now allow insurance companies to outperform their competitors. Insurance companies are now less dependent on internal data as access to third party data has increased to a great extent due to emergence of multiple social media channels. This has helped insurers to understand risks in a better way. Advanced analytics is helping insurers in priority handling and also allows a closer inspection of claims. Analytics can play a pivotal role and make a huge different to insurance companies in a variety of ways.
It helps in detecting fraud beforehand. According to a recent survey, one of 10 insurance claims are fraudulent. Spotting these claims is not an easy task but analytics can come to your rescue here. It can help in identifying the fraud sooner and can also help in keeping a check at each stage of the claims cycle. When the analysis is done properly, it can help in making better business decisions. In-depth study of historical data can help in predicting future outcomes. Insurers will also be able to monitor key performance indicators; thereby allowing them to set operational goals. It also allows determining benchmarks for future success.
Insurers usually process claims on the fly; analyzing claims can help optimizing their limits for instant payouts. Insurance analytics can also help in reducing labor costs by shortening claims cycles; thus increasing customer satisfaction. Using analytics in insurance is definitely beneficial and can help companies boost their progress, anticipate risks and make better business forecasting and decision that can encourage growth.