A.M. BestTV: Novarica Vice President: Advances in Predictive Analytics a Mixed Blessing

OLDWICK, N.J.--()--In this A.M.BestTV episode, Jeff Goldberg, vice president, research and consulting, Novarica, said predictive analytics allows insurers to better underwrite individual risks, but could ultimately undermine the traditional business model of spreading risks over larger populations. Click on http://www.ambest.com/v.asp?v=predictive916 to view the entire program.

Goldberg spoke about what defines predictive analytics.

“The insurance industry is a data-driven industry, even though the methodologies have gotten more sophisticated over the centuries,” said Goldberg. “Predictive analytics is different from your typical actuarial modeling, in the sense that you are focusing on a specific case. It is still difficult to delineate between what is an actuarial model and what is a predictive model. An actuarial model tends to look at things from a more demographic, general perspective. The predictive model is a way of looking at a specific case, usually to score it on some angle such as the likelihood of accidents if you are talking underwriting risk, or some other value that you are bringing in to understand.”

Still, Goldberg said he believes that predictive analytics has a bright future in the insurance industry.

“I doubt the industry will ever be actually predicting the future, but a predictive model does start to lead insurers down a path where they are making better, smarter decisions.”

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Contacts

A.M. Best
Lee McDonald, +1 908 439 2200, ext. 5561
Group Vice President, Publication and News Services
lee.mcdonald@ambest.com

Contacts

A.M. Best
Lee McDonald, +1 908 439 2200, ext. 5561
Group Vice President, Publication and News Services
lee.mcdonald@ambest.com