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6 Important Things You Can Learn About Your Insurance Business Through Insurance Analytics and Reporting

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6 Important Things You Can Learn About Your Insurance Business Through Insurance Analytics and Reporting

For decades, insurance companies have been at the forefront of business intelligence practices.

Actuarial science came about during the early phases of globalization in the 17th century, with early practitioners developing many methods and models still used today. Insurance analytics and reporting remain among the most important of these innovations.

While analytics and reporting still require human input, experience, and intuition, modern artificial intelligence (AI) and machine learning (ML) capabilities are now being used to augment or replace humans in a variety of related actuarial tasks.

The effects of these have been so profound that, today, an insurer’s choice of digital insurance platform can make just as much of a difference as their choice of actuaries.

The use of such platforms has allowed insurance businesses to draw from many more data points than was practical with previous generations of software.

The expanded capabilities of these platforms is offering insurers unprecedented visibility and insight into their business operations. Below are some of the important things insurers can learn through AI/ML-augmented insurance analytics and reporting

1.) Business Response to Market Events

Today’s insurance software solutions can leverage AI and ML to help create a clearer picture of events as they happen.

Because these solutions can draw from infinitely more information sources than any manual system, the models created through these can be extremely accurate and made as granular as the business needs. This permits insurers to take more calculated actions with less risk exposure than was possible with older platforms.

2.) Customer Habits and Demographics

Insurance businesses can get a clearer picture of the direction of their market through the use of AI/ML-augmented analytics and reports.

As these platforms can process much more information than manual systems, insurers can get a more accurate idea of current and potential policyholders’ profiles.

This improved visibility allows insurers to get a better appreciation of the relative risks associated with different customer segments, enabling better business decisions.

3.) Compliance Rates

Process compliance is important for reducing risk exposure from regulatory fines, penalties, and malicious activities.

With so many things going on at most insurance companies, it can be all too easy to overlook errors in compliance that could eventually harm the business.

With better software, the risks of noncompliance can be reduced significantly. Once the system has been set up, reports on processes in different pipelines can easily be created and analyzed within minutes. This not only reduces risks for insurers but also helps them identify opportunities for improvement.

4.) Fraud Patterns

Insurance fraudsters are getting more sophisticated each year. Before the introduction of advanced AI and ML capabilities in insurance platforms, teams of human analysts would need to painstakingly reconstruct the activities of malicious parties through largely manual processes.

This often meant that novel fraud techniques could be difficult to pin down, and criminal actors could only be prosecuted after much investigation and long after the crimes were committed—and that is if they’re ever caught in the first place.

The introduction of AI and ML in insurance has dramatically changed the landscape in favor of insurers. Now, fraud patterns could be detected as they happen.

This means fraudulent parties can be caught far sooner, with fewer false positives. In this way, new platforms not only reduce the risk of fraud but also prevent innocent policyholders from being inconvenienced.

5.) Opportunities to Improve Process Efficiency

Newer types of insurance software are designed specifically to automate and streamline all these different processes smoothly and transparently in the background.

Results of these processes will also be immediately available to analysts and decision-makers for review.

Using augmented platforms allows sales, underwriting, and other tedious manual processes to be performed faster, and with more accuracy and transparency.

This means actions such as policy payouts could be done faster and with far fewer risks to the business.

6.) Promising Insurance Products

Augmented analytics and reporting can also enable insurance companies to develop better, more relevant products.

By processing policyholders’ risk profiles, payment behavior, and current market trends, insurers can more easily come up with unique product packages that are more appealing to their target customers while still presenting acceptable levels of risk to the business.

Is It Time to Update Your Digital Insurance Platform?

If it has been several years since your last update, it may be time to consider newer solutions on the market. These will typically have expanded automation features over previous generations of software, giving insurers even more gains in terms of time and labor savings.

It’s worth noting that new digital platforms can also be deployed over the cloud, increasing service levels and saving insurers the cost of service, maintenance, and specialized labor. The deployment of these new systems can also be easily configured for local or partly local hosting if needed.

However, if your insurance business software has problems with creating timely or accurate reports, then updating your platform may be even more important.

Given the pace of activities in today’s markets, updated AI and ML-augmented systems should be considered a necessity for insurance businesses.

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