When a market is volatile, it can be tempting for companies to make rash decisions in response. Maintaining a profit in today’s hard market means making careful decisions based on the most accurate data available. As such, companies like Opta are leading the charge using advanced analytics to help companies get a competitive advantage.
The widespread industry solution when companies are losing money is to undertake broad-sweeping price increases. However, with advanced analytics, companies can view their books in a more refined manner, allowing them to recognize opportunities to offer competitive rates to specific customers across Canada; based on analytics, Opta clients have a better understanding of the risk associated with each individual customer. Further, as Opta acts a single source providing a complete risk solution, clients can make informed decisions having all their data in one place.
If a company does not have data or sophisticated pricing strategies, it can lead them to take bold action. When asked in a recent interview with Canadian Underwriter what happens to insurers that don’t have access to advanced data, Greg McCutcheon, President of Opta, said, “I hate to take an axe to a problem when you could use a scalpel or a laser beam.” Instead of increasing prices broadly, insurers should use analytics to assess whether or not a price increase is a good risk and, in turn, remove the bad risks from your books.
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