The word prediction brings up a lot of negative connotations. We often laugh at predictions made about who will win an election or a Super Bowl, but insurers aren't laughing at the predictions they are able to make about customer behavior that allows them to draw up models that limit exposure to risks.
In a recent report from Towers Watson ("Predictive Modeling Proving Its Worth Among P&C Carriers"), Brian Stoll, director and co-author of the report for Towers Watson, explains the value insurers have gained.
Stoll reports 70 percent of insurance carrier respondents use predictive modeling for personal auto and Stoll feels that figure understates the market share of carriers using predictive modeling.
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