Insurance companies invest considerable time and energy refining their loss-cost models in the hopes of achieving improvements in their loss ratio. With decades of practice, insurers have become the masters of GLM loss modeling. Ironically, it is this very same passion and expertise that may be standing in the way of insurers when it comes to demand modeling. Having spent their entire professional career immersed in loss-cost models, some insurance professionals may be missing opportunities when it comes to models predicting retention and conversion, also known as demand modeling.
Demand modeling is very different from loss-cost modeling, aiming to predict the probability that a prospect or policyholder will either buy or renew the policy at a given price. Failing to apply a thoughtful analytical approach that accounts for these differences, insurers may be missing on opportunities to build more robust models that can be leveraged to improve their business results.
Download the whitepaper to learn about the differences and similarities of Loss-Cost and Demand Modeling and the opportunities they hold for insurers.