The commercial-insurance industry may soon find itself in two camps: companies that adopt and utilize analytics and gain profitable market share by creating positive risk selection, and those who do not use analytics and suffer from adverse selection, a recent report says.
In its “2014 Outlook: Commercial Lines” report, Valen Analytics says commercial insurers are in a similar situation that the credit-card industry was in during the late 1980s and 1990s. In that time, Valen says, “new marketing and risk-assessment strategies fundamentally changed the credit-card industry. Technology and information-based companies like Capital One flourished and garnered significant market share while those that clung to traditional methods floundered.”
Valen sums up its point by asking, “The agent of change [for the credit-card industry]? Analytics.”
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