Johannesburg, Gauteng, 23 January 2017 – Analytics software has been around for decades, but in the era of connectedness, Big Data is beginning to reshape the insurance industry, allowing brokers to reduce their risks, optimise their operations and increase their revenue.
Predictive analytics is the use of information and various statistical techniques, to interpret patterns in historical data and provide the best assessment of what will likely happen in the future. In most cases a score will be generated indicating the probability of an event taking place. For insurers and brokers, they can use predictive analytics to identify the probability that a policy will have a claim.
“Databases are growing rapidly and sources of data are changing,” says Sujeeth Bishoon, Executive Head at Acuideas, a division of Indwe Intermediary Support Services. “For organisations to gain a competitive advantage in their various industries, it’s crucial they keep up with technology trends such as Geographic Information Systems (GIS) which delivers intelligent, real-time, location-based data.”
Through predictive analytics, brokers get valuable insight which allows them to more accurately predict future outcomes, helping them to manage and spread risk more effectively. There are significant advantages to using these progressive analytic tools, including these five benefits:
Efficiency: As the world evolves and customers become more empowered and technologically adept, they want real-time access to services and information. This is why the speed of response is so important, as it provides customers with good service. Through predictive analytics, brokers are better able to return quotes faster and with more accuracy, and respond more intuitively with claim service.
Pricing: Patterns are analysed through predictive analytics, which can then easily and quickly identify those policyholders with favourable risk profiles and claims outcomes. To retain these policyholders, competitive pricing can then be offered.
Individualisation: Rather than making sweeping judgements about particular organisations or businesses, an increase in relevant data allows for better fact-based decisions when it comes to individual policies.
Stability: With predictive analytics you also get insight into insurance companies, their market longevity and their ability to pay claims.
Advice: Predicting risk more accurately allows brokers to render better advice that is applicable to a customer’s unique situation. A simple example is using GIS technology to see that a customer lives near a golf course, and then offering them golfer’s extension cover.
“Technology is swiftly changing the pace we do business as it lets you analyse more data, more quickly, and with greater confidence and accuracy. Advanced risk analytical tools are becoming indispensable in our modern world, as they allow us to better understand, measure and mitigate risks. With this valuable data we can make better-informed and more strategic decisions, which not only improves pricing accuracy but also boosts profitability. As predictive analytics equips you with improved knowledge, you can offer better advice to your customers based on their needs and lifestyle, and this will ultimately assists brokers in growing their business,” concludes Bishoon.