Key Insurance Analytics
Key analytic application areas within insurance are
- Marketing analytics used for customer segmentation, cross-sell and upsell, marketing campaign management;
- Product management analytics used for product management and product profitability;
- Underwriting analytics used for risk assessment and pricing;
- Claims analytics used for claim valuation, reserving, settlement and recoveries, and fraud detection;
- Enterprise risk analytics for solvency and capital allocation;
- Sales analytics for channel and producer management, and incentive compensation management;
- Finance management for planning, budgeting and forecasting, and profitability analysis.
These areas will be explored in depth with use cases and example case studies in Chapter 10, “Use Cases and Case Studies.” Figure 1-3 shows an overview of commonly used analytics by business process.
Figure 1-3 Key Insurance Processes and Analytics
Analytics Users and Usability
Literally every function in the industry uses analytics: actuaries, underwriters, claims professionals, loss control specialists, marketing professionals, finance analysts, customer service representatives, agents and brokers, and regulators. Everyone in the insurance value chain needs and uses some form of analytics.
However, within these functional areas, different roles have different analytic needs. Executive management, such as CEOs, and board and senior management want key metrics in an easily consumable and highly visual format: dashboards or score cards, and increasingly on mobile devices such as tablets or mobile phones. Middle management wants key operational dashboards with more navigation including drill to detail and often standard or ad hoc reports and desktop, as well as mobile access. Analysts want yet even more detail plus the ability to manipulate data, create additional metrics, and even create their own reports/analytic views. Tools are reviewed further in Chapter 7, “Analytics Tools.”