As Predictive Analytics and GLM increase in popularity there is an increasing challenge associated with optimizing the acceptance and integration of these new techniques into sound underwriting processes and decision making structures. All too often these new tools are met by underwriters with the same skepticism as any other challenge to their established intuitive norms for risk selection.
This presentation will discuss how both actuaries and underwriters can engage each other in cooperative ways through predictive analytic endeavors to both sharpen the underwriters’ intuition and skill at risk selection and increase the real-world business case perspective of the predictive modeler. It will explore why no predictive model can be sustained in a vacuum as well as why no underwriter should address any predictive modeling project with anything less than a strong enthusiasm for the insights that can be garnered through the process. Finally, the presentation will give examples of how predictive models can help to mitigate some standard intuitive underwriting decision traps and how an underwriters intuition into the daily use cases for a predictive model can help stave off degradation of model stability.