Top analytics and decision management technology provider, FICO, has released a new solution that is designed to help insurance industry predictive models to result in improved return on investment (ROI).
The FICO Model Central Solution for Insurance gives insurers the ability to decrease the amount of time needed for the deployment of their models. In fact, it can cut back this time by as much as half, while it still offering the initial indications that the performance of a particular model may be hurting profitability.
Insurance companies have been using technology models for predictive analytics on an increasing basis as a vital element of their decision making processes, but the current management processes for those models is actually causing harm to their performance. The majority of insurance companies have inefficient or inconsistent techniques for tracking the performance of a model, as well as for updating current models and for the implementation of new ones into the overall production systems.
A recent survey by FICO showed that 64 percent of insurance companies did not have the ability to quickly update or deploy models that would get the most out of their business impact. One in every three insurers who participated in this survey said that it took between four and six months to implement a new model, while just over half (51 percent) said that it could take more than six months to accomplish that goal.
According to the vice president of FICO and its head of insurance practice, Russ Schreiber, “Leading insurers rely on analytics across lines of business for marketing, customer management, underwriting, claims, and fraud prevention.” He went on to explain that “High-performing analytics are a cornerstone of high-performing insurers. The value Model Central offers is the ability to rapidly identify when model performance is drifting and then accelerate the deployment of more predictive models regardless of the modeling technology used.”
Schreiber stated that a great deal of harm can come to profitability when there are mismatched product offers, incorrect pricing practices, weak analytics models, and when fraudulent claims go undetected. However, at the same time, he pointed out that in this most recent FICO survey –