Predictive analytics has transitioned from exciting buzzword to a core component of a carrier’s arsenal over the last few years—and its effectiveness is no longer in doubt. In fact, a Willis Towers Watson survey in 2015 found that 87 percent of property/casualty insurers reported gains in profitability from the use of predictive models.
Executive SummaryPredictive model monitoring is one of the most pivotal components to building and sustaining an overall analytics strategy within an organization. Bret Shroyer of Valen Analytics reviews three measures of model effectiveness in meeting business goals.
Now carriers are asking, “How can I create the most effective model in the long term?” The solution ultimately depends on the available data and how well a company understands the unique questions and answers forming the basis of their model.
At Valen, we often talk about the phases that carriers go through in their adoption of predictive analytics. In Phase 1, carriers typically enjoy two or three years of easy wins from picking the low-hanging fruit that comes from initial model adoption. However, it’s important to know what the right “next move” is beyond Phase 1. These options include: