Data mining is the land of what if in insurance: What if we tried to target policies to residents of this community? What if we eliminated this line of business? Most business analysts would have blanched at answering those questions a mere few years ago, but those with data mining tools and the imagination to understand its capabilities are finding the information they need to make wise decisions.

Overall, I dont think insurance carriers leverage their data as well as they can by utilizing data mining, says Craig Lowenthal, vice president and CIO of Hartford Financial Products, a unit of The Hartford. They can look at customer trends closer than they currently do and determine what product lines or coverages to get in or out of. Or even the type of industries they want to insure.

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