Point of View

GOAL

The global insurance industry is evolving and has leveraged technology to simplify some of the core operations of insurance to achieve profitability targets. Insurers need to identify the following:

Which lines of business to focus on by geography

Their current GWP status (based on different attributes) and the forecast

Projections of new prospects and existing customers

The segments necessary to focus on for price optimization

Without this data, the focus may defer to low priority areas or increase the insurance premium without due analysis. Unfortunately, this type of

strategy negatively impacts both new prospects and existing customers, bringing decline in their existing GWP. To overcome this, insurance carriers need a thorough analysis of their portfolios and adjust their pricing based on risks projected over time.

INTELLIGENT PROCESS FLOWS

Our cognitive technology-driven intelligent solution will help insurers in identifying key segments based on profitability forecast of customers and define optimal price for the risk underwritten. This will increase both insurer revenue and customer base. To arrive at this model, a detailed analysis of records is done before cleaning, correcting, and segmenting into meaningful format. Key attributes are identified and applied on the XGBoost algorithms for predicting outcomes and based on that a Premium Projection Model is created with 91.7% accuracy.

Premium Projection: AI-Led Approach to Drive Profitability

STEP 1Import historical Data of Homeowners Quotations for key attributes

STEP 3Analyzed, Cleaned, Segmented and Summarization of data

STEP 5Split data for training and testing of model. Run data through XGBoost model for predicting outcomes

STEP 2Features engineering to combine and select attributes for statistical modelling

STEP 4Normalization of attributes for statistical modelling

STEP 6Use predictions to project earned written premium, customer acquisition, retention, etc.

Stay connected:

For more information, contact marketing@niit-tech.com

© 2019 NIIT Technologies. All rights reserved.

NIIT Technologies is a leading global IT solutions organization, enabling its clients to transform at the intersect of unparalleled domain expertise and emerging technologies to achieve real-world business impact. The Company focuses on three key verticals: Banking and financial services, Insurance, Travel and Transportation. This domain strength is combined with leading-edge capabilities in Data & Analytics, Automation, Cloud, and Digital. With over 10,000 employees serving clients across Americas, Europe, Asia, and Australia, NIIT Technologies fosters a culture that promotes innovation and constantly seeks to find new yet simple ways to add value for its clients. Learn more about NIIT Technologies at www.niit-tech.com

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SOLUTION

Our intelligent solution is a combination of

machine and deep learning integrated with

predictive analytics. It analyzes historical data and

predicts the likelihood of new users/prospects

accepting new business quotes and policies on

renewal. This cognitive solution will provide

insurers with projections based on the premium

forecast (GWP) they plan to write in future

(monthly, quarterly or yearly). It will help insurance

carriers in optimizing the pricing for an individual

customer based on certain attributions, and by

supplementing the rate structure. However, the

insurance market is unsteady, and insurers should

consider future uncertainties to implement

impactful business decisions in appropriate

market segments. The intelligent solution aims to

identify these segments and provide insights to

assist in the decision-making process. The model

carries out future projections of GWP by running

predictive algorithms on historic transaction

parameters.

TECHNOLOGIES

Power BI is leveraged for developing machine learning based model and dashboarding

Random Forest and XGBoost algorithm are used and finally XGBoost is utilized

SUCCESS

Identification of market segments with high and low levels of business growth

- Effective campaign managements, personalized offers

- Resource optimization for each segment

Earned Premium: Actuals & Forecasts 12.70%Q4 Projected Earned Premium Growth

Portfolio Snapshot

Increase in market retention by 15 - 20%

Yearly rise in GWP by 4%

Preview of GWP growth in the next cycle (month/quarter/year) for effective decision-making

Identification of monthly trends of business in terms of customer acquisition, retentions, GWP and TIV