The number of auto insurers that use analytics to understand customer buying behavior and incorporate that knowledge into the design and pricing of insurance products is growing, according to “2013 North America Auto Insurance Pricing Benchmark Survey,” from Earnix, a vendor of pricing and customer analytics solutions for banking and insurance. Results are based on responses from 73 executives and pricing professionals from insurers that sell auto coverage in the United States and Canada.
Almost half (48 percent) of large companies, those with more than $1B gross written premium (GWP), use segment-level demand models to estimate the effect of rate changes, Earnix said. Most smaller insurers (62 percent) assume no change in customer demand as a result of rate changes, which is far less accurate, Earnix said.
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