Embed Size (px)
DESCRIPTION
This infographic reflects the Towers Watson's fifth annual Predictive Modeling Benchmarking Survey and examines how North American property & casualty insurers are embracing predictive modeling.
Citation preview
2013 Predictive Modeling Benchmarking Survey
P&C Market Leaders Rely on Data-Driven Product Strategies
North American P&C insurers are keenly aware that predictive modeling offers a competitive advantage. At least 85% reported a positive impact on rate accuracy, nearly 80% on profitability and at least 74% on loss ratios.
Predictive modeling use increased in 2013 for nearly every line of business over 2012.
Commercial lines
Nearly half of commercial carriers are exploring or already using models to help flag claim fraud, set more accurate case reserves, evaluate claims for litigation potential and triage claims for adjusters.
Many carriers supplement modeling with internal non- rating variables to improve underwriting risk selection and price accuracy.
At least 73% use predictive models to revise underwriting rules.
Commercial lines carriers leverage product comparisons as a key component of their competitive market analysis (CMA).
What We Found
Why You Should Take the Next Step
What’s on Their Minds?Who’s Doing WhatPersonal lines
45% of personal auto carriers use or will use usage-based insurance (UBI).
59% of personal lines carriers are exploring or already using models to detect potential claim fraud.
95% of personal auto and homeowners carriers use or plan to use predictive models for underwriting and pricing.
Qualitative, quantitative and product reviews are essential elements of competitive market analysis for personal auto and homeowners carriers.
Insurers have a variety of concerns about underwriting. Personal lines carriers worry most about competitive alignment, while commercial carriers look more at pricing discipline.
Just the StartOur survey finds strong evidence that the benefits of data-driven analytics have not yet been fully explored, especially by smaller carriers.
Discipline in pricing execution
Geographic segmentation
Monitoring/Metrics
Class segmentation
Competitive alignment
Greatest level of concern with current underwriting approach
Personal lines Commercial lines
70%31%
49%48%
49%46%
46%
21%
25%
63%
Percentage not applying claim-related predictive analyticsfor these purposes
Small carriers Large carriers
Detect potentialclaim fraud
Triage claims foradjuster assignment
Evaluate claims for potential litigation
Case reserving
77%
30% 35%48% 57%
92% 92% 92%
Don’t Be Left Behind: Take Action85% of small personal lines carriers say predictive modeling is required to compete in their main business lines, and 61% of small commercial lines carriers say there is a competitive advantage for early adopters.
Serious market players will:
Assess their current programs
Commit to finding new ways to leverage data-driven analytics
Act to create or improve a flexible predictive modeling framework
For more information, contact: Brian Stoll | +1 860 843 7129 | [email protected] orKlayton Southwood | +1 309 452 6845 | [email protected] or visit towerswatson.com/pmsurvey.
Personalauto
Homeowners Workerscomp
Generalliability —CMP/BOP
Commercialproperty/CMP/BOP
Commercialauto
Personal lines Standard commercial
7% 17%7%27%24%7%
Percentage currently modeling
80% 62% 47% 33% 32% 28%
Increase in 2013
Renewed commitment to predictive modeling could positively impact both top- and bottom-line indicators.
Top line
Personal lines Commercial lines
25%52%48%45% 35% 39%
Expansion of underwriting appetite Market shareRenewal retention
Rate accuracyLoss ratioimprovementProfitability
96%85% 78%80% 74%80%
Bottom line
