In spite of centuries of sales experience, most insurers rely heavily on price for acquiring and retaining customers. The reality is that customers base insurance purchasing decisions on many factors. While this does not mean that we can ignore pricing, it does mean that alternatives exist for insurers to remain competitive.For some companies, the frustrating cycle of hard and soft markets will not exist. By relying on the power of data mining, they can maintain the consistency and accuracy of their underwriting decisions; they can significantly reduce the impact of fraudulent claims; and they can have a better understanding of their customers' wants and needs.
Data mining is the exploration and analysis of potentially large volumes of data to discover or confirm useful relationships, patterns and rules. These discoveries are then used to make some prediction or inference about future behavior.
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