Predictive Analytics Market - Insurance

Part
01
of three
Part
01

Predictive Analytics in Insurance-Case Studies

Some case studies of predictive analytics in the insurance industry are pricing, risk selection and product optimization, and fraud detection.

Pricing, Risk Selection & Product Optimization

  • With the increase in variety and complexity of data sources, information gathered by insurers becomes more actionable.
  • This is because data that is not gathered through outside channels, for example criminal records and credit history, is more direct, and can hence provide valuable insights for insurers.
  • Since the improving data insights are majorly comprised of firsthand information, they result in the improvement in pricing and risk selection through predictive analysis.
  • Companies are currently in a position to use "pay-as -you-go and dynamic pricing models" based off of the predicted risk of the customers, their buying taste and behavioral signals.
  • Predictive analysis algorithms provide insurers with the ability to adjust the quoted premiums dynamically.
  • An insurer based in the United Kingdom used telematics to support a large client reduce the risk of accident-causing driving maneuvers by 53%.

Fraud Detection

  • Infinity, a property and casualty company, uses predictive analysis technology to spot "potentially fraudulent claims" and quicken the payment of the legitimate claims.
  • After incorporating predictive analysis, the claim fraud system raised the success rate in going after fraudulent claims from 50 — 88%.
  • In turn, the amount of time needed to refer the questionable claims for investigative action also reduced by 95%.

Research Strategy

In order to come up with the overview of the case studies of predictive analytics in the insurance industry, the research team sourced for the most relevant resources. By so doing, we encountered and obtained older resources, some dating back to 2013. However, we saw it important to obtain information from them due to their deep relevance to the case studies.

Part
02
of three
Part
02

Top Predictive Analytics Providers in Insurance

The top predictive analytics solutions providers for insurance companies are SAS, IBM, Mathworks, and Microsoft.

1. SAS

  • SAS was found in 1976 by Jim Goodnight, Jane Helwig, and Jim Barr. Currently, the company claims to be the leader in analytics, serving 147 countries.
  • Its headquarters is located in Cary, North Carolina with a total of 13,939 employees worldwide. SAS software has been installed at over 83,000 sites of different businesses and governments.
  • 92 out of 100 companies from Fortune Global 1,000 in 2018 are SAS customers.
  • The company's revenue was $3.27 billion in 2018.
  • SAS is considered a top provider, as the company holds the largest share (30.8%) in predictive analytics and their product solutions are among the top predictive analytics software.

2. IBM

  • IBM was founded in 2011 by Thomas J. Watson and its headquarters is located in Armonk, New York. The company is the largest employer in the world for having over 400,000 employees spread out in 170 countries.
  • 47 of 50 companies from Fortune Global are IBM's client. Currently, IBM is helping 20,000 clients to "produce better decision-making and business outcomes".
  • IBM has been recognized numerous times for its products. It has received 9 US National Medals of Technology and 6 Turing Awards and is home to 5 Nobel Laureates.
  • In 2018, the company earned $79.6 billion in revenue.
  • IBM holds 12.4% of the market share in predictive analysis and their product solutions are among the top predictive analysis software.

3. MATHWORKS

4. MICROSOFT

  • The company was founded in 1975 by Bill Gates and Paul Allen. Its headquarters is located in Redmond, Washington.
  • Microsoft is a multinational corporation which develops, manufactures, and licenses a wide range of software products and services.
  • In 2018, the company achieved a revenue of $110.4 billion. The company has over 130,000 employees globally.
  • Microsoft offers different products and services and the combined users of different products reached more than a billion.
  • Microsoft holds 3.1% of the market share in predictive analytics and its product solutions are among the top predictive analytics software.

RESEARCH STRATEGY

We commenced our research by analyzing industry and market reports, case studies, and company rankings from credible sources such as McKinsey, PRNewswire, Forbes, Techcrunch, and other similar sites. While we found numerous articles on predictive analytics for insurance, none of them listed the providers and ranked them according to revenue or number of customers. We came across the same information when we looked for the market share of this space. The most likely reason is that predictive analytics software serves different industries in which Insurance' is only one of the segment.

Thus, we looked for general predictive analytics software providers and found a report that was based on their market share. We deemed it credible, as market share is one of the metrics used in finding the top or leading providers of a product or service. Subsequently, we found a corroborative report which listed the top predictive analytics solution/software. We cross-referenced the list to verify if these softwares are produced by the top providers with large market share. According to the list, the top providers are SAS, IBM, Mathworks, and Microsoft. Following this, we checked the official website of the providers and discovered that the predictive analytics solution of these four companies includes insurance as well. Additionally, all the four companies generate revenues in billions.
Part
03
of three
Part
03

Predictive Analytics Solutions Providers-Competitive Landscape

SAS has been solving the toughest business problems for more than 4 decades; Mathworks is the leading developer of mathematical computing software used in a variety of industries; and Microsoft provides security and proactive compliance trusted by enterprises, governments, and startups. We have provided a competitive landscape of SAS, IBM, Mathworks, and Microsoft in the findings below.

SAS

  • The link to the website can be found here.
  • SAS's competitive advantage stems from the fact that they have been solving the toughest business problems for more than 40 years, so customers are assured that they can trust their powerful analytics platform. They also provide user-friendly and flexible interfaces that accommodate a variety of skills "from business analysts to data scientists". In addition, they constantly invest in innovations in artificial intelligence and the Internet of Things.
  • The solutions that SAS provides include AI and Machine Learning, Advanced Analytics, Internet of Things (IoT), Customer Intelligence, Data Management, Cloud, Fraud and Security Intelligence, Operationalizing Analytics and Risk Management.
  • The pricing for SAS Business Intelligence starts at $9,000 per year per user.
  • Some customers that SAS has worked with include Honda, Nestle and HSBC.

IBM

Mathworks

  • The link to the website can be found here.
  • Mathworks' competitive advantage is that it is the leading developer of mathematical computing software used in a variety of industries. Scientists and engineers globally rely on the different products it offers to speed up innovation, development and discovery; and over 6500 universities and colleges globally use their products for research and teaching in various disciplines.
  • Mathworks' solutions include MATLAB, a "programming environment for algorithm development, data analysis, visualization, and numeric computation"and Simulink, a "block diagram environment for simulation and model-based design of multi domain and embedded engineering systems."
  • The pricing for MATLAB and Simulink is as follows:
    • Individual: $2,350 for a perpetual license and $940 for an annual license
    • Academic Use; Individual and Designated Computers: $550 for a perpetual license and $275 for an annual license
    • Home: $95
    • Student: $29 for a student license and $55 for a student suite license
  • Some customers that Mathworks has worked with include Centers for Disease Control (CDC), Genentech and Samsung UK.

Microsoft

Sources
Sources

From Part 03