A new survey of insurance executives reveals a growing number of insurance companies are using enhanced analytics to understand customer buying behavior and are incorporating this understanding into the design and pricing of their products.
Earnix, a provider of integrated pricing and customer analytics solutions for insurance, released the results of its latest industry survey: 2013 North American Auto Insurance Pricing Benchmark Survey.
Larger insurers—with over $1 billion in gross written premium—are more likely to use advanced customer analytics in their pricing processes. Nearly half (48 percent) of that group use segment-level demand models to estimate the effect of rate changes. Conversely, most of the smaller insurers (62 percent) assume no change in customer demand as a result of rate change, an assumption that is far less accurate.
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