AI Based Underwriting Model - Forecasting Claim Expenses for a Leading Healthcare Insurance Provider
THE BACKGROUND
Loss ratio is one of the crucial metrics to measure the financial performance of a health insurance company. Understanding risk exposure help company estimate its loss ratio and take appropriate actions to maintain that. One way to estimate risk exposure is to forecast cost expenses for a member and group, and accordingly tweak premiums during policy renewal within accepted bounds of government laws and industry regulations. The forecasted expenses also help business understand its current customer base, quantify overall risk, and determine business strategy such as which customer segment they should focus on in future. A large medical insurance provider, which manages millions of insurance claims per year, collaborated with Soothsayer to revamp its underwriting process using AI for better managing loss ratio.