Advanced Analytics and the Insurance Industry

Advanced analytics covers a broad spectrum of analytical techniques leveraging traditional business intelligence, predictive analytics and visualization. Text analytics is a growing piece of the advanced analytics spectrum. I saw a great article from Frank J. Coyne, Chairman, President and Chief Executive Officer of ISO. Mr. Coyne talks about the growing importance of Advanced Analytics to the Insurance Industry - a point I absolutely agree with. However, I would broaden his definition of advanced analytics. You can access the article via this link:

 

http://iso.com/index.php?option=com_content&task=view&id=2365&Itemid=211.  

 

In his article, Mr. Coyne does not specifically mention text analytics. Although the Insurance Industry has had considerable success with predictive analytics, text analytics is new to the industry. But that is starting to change. Voice of the customer (VoC) and fraud detection initiatives are gaining traction. Text analytics drives improved predictability in the context of fraud, and provides a better source of customer insight for VoC initiatives.  In light of the vast amount of information trapped in unstructured form, text analytics will quickly become an integral part of all advanced analytics efforts.

 

Future Insurance Industry initiatives will leverage text analytics to

- Reengineer the claims process

- Provide better risk analysis for underwriting

- Tighten the loop between claims and underwriting

- Accelerate product innovation

 

Text analytics has the potential to create significant value across any functional department within a business. It is widely recognized that a large percentage of the information available to a business takes the form of unstructured data. It is not a stretch to conclude that as text analytics evolves so too will the processes that drive business.