Today’s issue of WorkCompRecap features the release of a new A.M. Best special report that found that the presence of predictive analytics in the U.S. property/casualty (P/C) industry has become increasingly prevalent, but its specific use has varied by company and line of business.
According to the report, the workers’ compensation line appears to be the furthest along in terms of the impact of predictive analytics, noting that while most workers’ compensation insurers have adopted predictive analytics for risk selection and underwriting, a growing number are fighting back against rising severity by using predictive models to lower claim and fraud costs. A.M. Best noted that it believes that this approach has played a role in tempering the workers’ compensation underwriting cycle over time. Best also noted that the ability to be nimble in developing better products and services for clients and providing them in a faster and more efficient manner will become more critical in the future.
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