If you’re wondering how important predictive analytics is becoming to property/casualty insurance companies, consider this: 56 percent of industry respondents in a new survey said they plan to start using predictive models within a year.
Nearly half—45 percent—said they have already added predictive analytics to their underwriting processes over the last two years, according to recently released results from a Valen Analytics survey. Valen polled 39 property/casualty insurance executives at its 2nd annual Analytics Summit in Vail, Colo. on March 3-6 earlier this year.
The survey, however, reviewed some mixed results, too, highlighting some wariness about increased of analytics.
According to Valen, 82 percent of respondents said underwriting adoption was a “significant” or “high” concern when deciding to add predictive analytics to their underwriting processes.
Why is that? About 24 percent of respondents told Valen that their underwriters believe experience is worth more than a predictive score when assessing risk. A solid 25 said underwriters are worried predictive analytics will replace their jobs.
“In order to achieve predictive modeling goals, underwriters as well as actuaries, executives and training teams need to be a part of the discussion pre-implementation, and be educated on how the model will be making their jobs easier, more efficient and effective,” Valen CEO Dax Craig said in prepared remarks.
Other major survey findings:
Source: Valen Analytics