Advantages Of Data Analytics For Insurance Sector
Often considered as a high-risk industry, businesses in the insurance domain have always relied on statistics to make key decisions leading to optimizing claims processing, risk reduction, fraud detection, etc. The insurance sector has seen a monumental shift in the past decade due to technological penetration. With the introduction of advanced analytics and affordability of different Data Analytics & Visualization Platform business analytics and key stakeholders in the organizations are turning to actionable analytics in the hope of eliminating risks and finding newer ways to grow their business and gain a competitive advantage over their industry peers.
In today’s blog, we take a look at how insurance businesses can use data analytics software to their advantage and escalate the process of orchestrating desired business outcomes.
Identifying Fraudulent Claims
In a report published by Gartner, it was observed that insurance companies suffer annual losses estimated to be close to $40 billion every year due to fraudulent claims! Only 20 percent of these claims are detected leading to massive loss of time and money for the agency. Recently, companies are turning to various data visualization platforms to create meaningful reports that produce actionable insights and help identify fraudulent claims by leveraging predictive analytics and behavioral patterns.
For example, an insurance company leveraging data analytics can easily spot excessive medical billing fraud by comparing similar surgical cases for hospital and medical charges. These data-driven insights can easily lead to savings worth millions of dollars, thereby justifying the investment in data visualization software.
Real-Time Risk Assessment
Effective risk-assessment is the backbone of every successful insurance business. Today, advanced data analytics tool plays a crucial role in accurately identifying risks associated with the policyholder and the type of the insurance thereby providing real-time insights that help the agents to calculate a profitable yet competitive premium to the customer. This has been particularly important for companies that offer vehicle insurance. With internet-powered vehicles collecting data 24×7, insurance providers get access to key information such as braking patterns, the average speed, that can unlock hidden insights into the policy holder’s driving. If the data collected from the individual’s vehicle suggests irrational driving patterns, too many speeding violations, the policy managers can increase the premium after considering the factors associated with different risks.