OLDWICK, N.J.--(BUSINESS WIRE)--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.”
Recent episodes of A.M.BestTV include:
- Reinsurers Battle for Risk on a Wider Range of Fronts: A.M. Best analysts who follow the reinsurance industry explore insurers' response to remaining relevant in the face of an ongoing soft market: http://www.ambest.com/v.asp?v=globalrepanel916.
- The Rendez-Vous Conference: Reinsurers Adapting to an Unforgiving Market, A.M. Best Analysts Say: At Rendez-Vous, A.M. Best Vice President Robert DeRose and Assistant Vice President Greg Reisner discuss how reinsurers have attempted to adapt to the increasingly competitive market by focusing their products on new technologies and geographic regions: http://www.ambest.com/v.asp?v=rvs5916nc.
- The Rendez-Vous Conference: Insurance-Linked Securities Must Address New Risks or Face Slower Growth, Executives Say: At Rendez-Vous, insurance-linked securities (ILS) experts say the overall growth of ILS continues, but the quicker turnaround and lower costs of collateralized reinsurance have made it attractive to a larger pool of investors: http://www.ambest.com/v.asp?v=rvs4916nc.
- The Rendez-Vous Conference: Brexit Has Insurers Exploring New Relationships, Changes to Operations: At Rendez-Vous, insurance executives spoke about the United Kingdom’s withdrawal from the European Union, which is setting off a host of potential changes within the London insurance market: http://www.ambest.com/v.asp?v=rvs3916nc.
A.M.BestTV covers exclusive A.M. Best information and reports, targeted topics and key developments in the (re)insurance industry every Monday, Wednesday and Friday. Sign up for alerts of episodes at http://www.ambest.com/multimedia/ambtvsignup.html. View A.M.BestTV episodes at http://www.ambest.tv.
A.M. Best is the world’s oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.
Copyright © 2016 by A.M. Best Company, Inc. and/or its subsidiaries. ALL RIGHTS RESERVED.