B2Metric Underwriting Risk Management

B2Metric Underwriting Risk Management
Murat Hacioglu 05.01.2020
AutoML B2Metric AI Risk Management Underwriting Insurtech Machine Learning Risk Analysis B2METRIC Machine Learning Studio

Underwriting is the duration of assessing the risk of insuring a home, car, driver or individual in the case of life insurance or health insurance. Underwriting is also, determine if it's beneficial for the insurance company to take the chance on providing insurance. After determining "risk", the underwriter sets a charge and adjusts the insurance premium that will be charged in exchange for taking on that risk.

What Does an Underwriter Do?

The role of insurance underwriters is to pick who and what the insurance company will insure based on risk evaluation.

  • Tries to find out what the actual risk is according to reviews of specific information.
  • Adjusts what perils the insurance company agrees to insure or what kind of policy coverage
  • Decides the conditions that the insurance company agrees.
  • Tries to find proactive ways to eliminate or decrease the risk of future insurance claims.
  • May tries to insure you when there are some issues and when the issue isn't clear by work out with your agent or broker.
  • Changes or limits to endorsement coverage.

Briefly, underwriting is a critical risk palliation mechanism accepted in the insurance sector.

Insurance underwriting process

What is the meaning of risk?

Underwriting risk means the risk of loss undertaken by the insurer. In insurance, underwriting risk may appear from an erroneous evaluation of the threats related to writing an insurance policy or from factors that uncontrollable. As a result, the insurer's expenses may overrun the premiums that won. 

In the securities sector,  underwriting risk generally comes up if an underwriter overrates demand for an underwritten issue or if market conditions change abruptly. In such cases, the underwriter may be necessary to keep part of the issue in its inventory or sell at a loss.

An insurance agreement guarantees that the damages and losses caused by covered perils will be covered by the insurance company. Creating insurance policies or writing insurance policies is usually the primary source of income for the insurer. The insurer gathers premiums by underwriting policies and invests the revenues to get gain. An insurer’s profitability hang on how well it understands the risks it insures against and how well it can decrease the costs related with managing claims.

How A.I. Change The Future of Underwriting Process ?

Artificial intelligence is a disruptive force in multiple areas, like finance, healthcare, and security. The insurance industry can also benefit from these huge technology seriously. There some different ways to use AI in the insurance industry.  Risk Mitigation, Fraud Prevention and, Better Underwriting are just some examples of them.

According to report by McKinsey ‘Insurance 2030—The impact of AI on the future of insurance’   AI and its associated technologies will have an important impact on all senses of the insurance industry, from distribution to underwriting and pricing to claims. Advanced technologies and data already have a huge effect on distribution and underwriting, with policies being priced, purchased, and bound in near real-time.

How Does B2Metric AI Technology Distrupt the Insurance Industry?

Underwriting Risk Management based on Artificial Intelligence

Multiple models run with cross modeling using B2Metric AutoML to predict risky customers in auto insurance.

  • Filtered customer proposals coming from all agencies and banks to get the best insights on customers.
  • 20% extra profits (comparing GLM and statistical models) annually by de-risking customers’ accident risks.

Claims processing is the center of the insurance business. Even tiny improvements that reduce processing time and increase accuracy can drive huge impacts. Time is a valuable resource for employees and customers. Use B2Metric Hunter to predicting that claims ought to be a foundation on auto-paid characteristics with deep learning. Thus, minimize your the possibility of mistakes.

Fraud Detection and Prevention

The power of technology driven fraud detection solutions is derived from their ability to process large sets of data. The general rule is the more data the better, which consequently improves the accuracy and effectiveness of the analysis. B2Metric AI uses several data sources, both internal and external, to help insurers identify fraudulent behavior.

Risk Mitigation

Risk management is in a doubt on Insurance companies, brokers and other financial services. It is a wrong idea and just preparation for cash flow or financially bad days. The part of credit risks ensures services concentrate on helping management, reporting of the credit risk description. Financial market places depend to develop prediction models nevertheless they consist of the natural risks.

How Does B2Metric AI Change the Future of Underwriting Risk Management : HUNTER

B2METRIC RISK HUNTER

B2Metric automates the risk management process for a minimum loss ratio with great modeling of 100% explainability which improves your own GLM model results by 20%. AI can deliver on insurance industry expectations through machine learning and deep learning. B2Metric Hunter is the AI-native, SaaS and On-Prem based solution that’s powering risk analytics for the leading insurers. It uses multiple data sources and AI, delivered by dedicated account-based Data Science teams to optimize the claim handling period and drive innovation. 

"B2Metric does not analyze only structured data. You can also analyze the unstructured enhanced data."

Unstructured Data Analysis

Insurance data analysis

  • Reading content from document in scanned image/pdf format with OCR + Img. Recognizer.
  • Analyze data with NLP models to identify already defined red flags for risks or fraudulent situations.
  • Use the result of this data for B2Metric Risk model
  • Reported via dashboards for the actuary department.

AI is preparing to change the insurance industry on a large scale with risk analysis and other developing technologies. Using these technologies, insurance agents will be able to obtain customer insights, behaviors, and participation information that they have never seen and are unsure of. As a result, it will increase the value of buyers, attract new buyers to increase revenue as much as possible by moving your product or service beyond the promises.