Predictive Analytics in Insurance | Actuarial Post

2 – Take a strategic approach to deployment
Implementation of predictive models is arguably one of the biggest hurdles within the whole process. During this phase, the models are integrated with existing systems. The best thing to do is take a strategic approach by starting deployment with a system that will make the output easy for the organisation to get to grips with.

Often from an IT integration perspective, the easiest place to begin deploying models is in pricing. The ratings structure is likely to be familiar to the company as a whole, and a new model that creates a new variable is pretty easy to plug back into a ratings structure.

That said, it is important to keep in mind that it can be more complicated to determine which models to deploy to underwriters or claims adjusters, to inform the underwriting or claims-handling processes, for example. Asking the IT department to programme complex models into the underwriting or claims workflows is a lot to ask. It is difficult to deploy the correct algorithm and hard to get the data from a production environment, transform it to be usable for the model, and send appropriate data back from the model.

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Predictive Analytics in Insurance.