Are you leading or lagging in predictive modeling? Judging from the TMPAA State of Program Business Study 2017, more and more program administrators are embracing predictive modeling. Nonetheless, appreciation for the technology remains tepid. While the study found use of predictive modeling among program administrators rose from 26 percent in 2014 to 37 percent in 2016, 56 percent had no opinion about whether predictive modeling helped their programs be more profitable.
Perhaps you’re not entirely clear on the meaning of the term. Basically, predictive modeling means using all the data at your disposal to make decisions. Its primary use has been in setting prices, particularly for personal lines, but predictive modeling is increasingly being used for commercial lines, and has moved into underwriting, claims, marketing and more. In fact, more commercial lines insurers indicate they intend to build their capabilities, according to the Willis Towers Watson U.S. Predictive Modeling Benchmark Survey published a year ago.
While commercial insurers were slower to embrace predictive modeling, they “have ambitious expansion plans in areas such as claim triage, fraud potential, litigation potential and case reserving,” the survey showed. Are you making decisions now that will allow you to exploit this new technology?
May we suggest one step you can take? Contact NetRate Systems to learn about the data analytics built into our solutions for commercial lines’ submission, underwriting, rate, quote, issue and reporting processes. Just call 877-790-1114.