Using Data Analytics: Commercial Insurance Losses

This article was published by Ernie Feirer on

The article states that for the past decade commercial insurance companies for automobiles (insurance on company owned vehicles) has seen a continuous loss despite raising rates. It has accelerated even more in the past 5 years to a point where insurers are looking for alternative ways to perform actuary duties to help mitigate the risk associated with insuring motorist of commercial vehicles.

They talk about the current use of MVR (Motor Vehicle Records) to calculate the risk an individual driver may pose for getting in an accident or filing an insurance claim. While working for FedEx Office I would see this option available in our hiring software so I assume that some of the things it takes into account is past driving records and credit score. Credit score surprisingly is linked to the probability that you may file an insurance claim.

Where data analytics can come in and save the day is by using other databases with information about the insured to adjust and qualify rates. This can allow them to look at not just an individual’s past driving history and credit score but other factors surrounding them. In this article they talk about the use of a contributory database that can automate the loss runs based on searches by the business and also by specific drivers. They will be able to identify prior claims by both company and individual, prior loss history and other information.


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