Insurance and Analytics

An insurance company has 3 important functions – attracting the customers (collect premium), underwriting risk (balance premium and risk) and processing claims (payback the sum assured).

For example, for Home Insurance the insurance companies charges premium to all its policy holders monthly or yearly, the premium charged will be based on estimated risk and policy coverage and if there is damage to the property due to any of the defined list of causes the insurance  company will pay the agreed sum to the policy holder.

There are various types of insurance policies and some of the generic Insurance policy types are

                1. Life Insurance
                2. Health/Medical Insurance
                3. Motor Insurance
                4. Home Insurance
                5. Travel Insurance
                6. Pet Insurance
                7. Wedding Insurance

Advanced analytics techniques and methodology are being used in the Insurance Industry. Sophisticated analytical techniques help Insurance companies to

    • Acquire Customers
    • Reward Agents based on value
    • Underwrite risk
    • Spread risk concentrations
    • Assess Cash Reserve requirement
    • Retain the customers
    • Estimate claim size
    • Identify and reduce fraudulent claims

Example of Analytics use cases

    • Cross Selling Motor Insurance
    • Modeling Claim Size

Read more on Insurance analytics