Behavioural modelling in general insurance
#behavioralmodelling is becoming an integral part of the pricing sophistication process in general insurance.
#priceelasticity is a well-known concept?in economics and its adoption is becoming?more ubiquitous in the?field of airline, hotel and?car hire reservation pricing. However, its inclusion in the general insurance pricing process has not yet?been fully implemented. In an insurance context, behavioural modelling is addressed at different milestones in a policy’s lifecycle, from?the first quote issued to renewal and beyond.
Its four main applications are:?
1) #conversion : predicting the purchase of a new policy?
2) #midtermcancellation : predicting the cancellation of the policy during its lifetime (subject to regulations)?
3) #retention : forecasting the renewal of the contract at expiration?
4) #crosssell : which products the customer may buy from the company (for example buying home insurance while already owning motor insurance)?+ #upsell : which extra coverage will be added (for example adding fire and theft to the existing motor product)
Our experts Damiano Massimi and Thibault Imbert discuss potential benefits in the latest issue of The Actuary.
Chief Data and AI Officer bei Munich Re
2 年Great overview!
Strategic Partnerships | Dealmaker | Insurance
2 年Interesting stuff Joachim Mathe, thanks for sharing!