Win with Advanced Business Analytics: Creating Business Value from Your Data

FINANCIAL SERVICE INDUSTRIES AS PIONEERS*

The insurance and financial service industries have been pioneers in the collection, management, and predictive analytics of data. Given their mandatory reporting environment and that their revenue relies on being accurate with data, financial institutions and insurance companies started using simple analytics in the 1800s to price life insurance and underwrite marine insurance. They have since kept on innovating and have undergone many waves of improvement, including the use of neural networks to optimize premiums, the introduction of credit scores in evaluating a customer’s financial position, and the use of various behavioral and financial third-party datasets and social media data to supplement their future predictions. The success stories are numerous, and a financial institution that is not using predictive analytics today in product pricing and underwriting would be seen as obsolete and doomed to failure.

We see these companies now expanding their analytics into newer business units and newer applications being born. For example, safety analytics is the science of using information about a company’s current state and other geo-demographic data to prevent accidents from happening in the first place and avoid the associated insurance costs through a safer workplace. Claims analytics is a discipline where claims severity is scrutinized for drivers of high dollar claims by injury type. It aims at understanding what causes a particular ...