A Professional Governance Framework for Data Science
A growing number of executives are facing up to digital reality. They know that analytics can significantly improve the performance of their current business. They know that first-movers have an advantage. And they are aware that digital insurance can give birth to entirely new business models that shake up sectors, leaving companies that fail to adapt struggling to survive. They have therefore taken steps toward transforming their businesses.
The ability to predict that a customer is at a high risk of churning, while there is still time to do something about it, represents a huge additional potential revenue source for insurers. It enables insurers to improve retention rates, maximize lifetime value, and target preventative actions where it has most opportunity for successful outcomes.
The digital natives (Google Apple Facebook and Amazon) have led customers to expect an easy and convenient interaction with companies where the company process is built around the customer journey. In addition, this journey is increasingly digital and serviced by AI to reduce operational costs and accelerate the overall process. Insurance claims are an example of a process where there are large amounts of unstructured text. Text analytics can provide a tool to detangle this set of mulitple fragmented communications.
Customers and appointed repairers can easily capture photographic evidence of damage using smartphones. The video and image data can be analysed to support home, car and device damage insurance claims. This may be done manually today, but AI offers an opportunity to reduce the time that a claim remains open and to possibly settle simple claims immediately with implications of cost savings.
A predictive model of pricing and other terms under which existing clients would renew and potential new clients would buy is possible using data science and AI. Dynamic price optimization using machine learning can help correlate pricing trends with sales trends by using sophisticated algorithms which could give Insurers significant advantage for optimizing insurance cost and pricing, in addition to the possibility of creating new insurance services such as real-time pricing at point of sale.
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