Article

Predictive Analytics for Forecasting

Data Analytics Sharing for The Conference Board

About the report

Deloitte Actuarial and Insurance Solutions Partner Louis Lee presented, discussed and shed light on the topic of predictive analytics for forecasting, at The Conference Board's Asia CFO Council in August 2021.

The Conference Board Councils enable senior financial executives across Asia to participate in high-level peer discussions on broad issues of corporate strategy, risk management, and governance as well as pertinent topics in treasury, capital markets, tax, mergers and acquisitions, and accounting.

(English version)

Viewpoints

  1. Cash Liquidity Management:  Cash conversion visualization can enhance cash velocity by providing a holistic view of overall cash conversion process, enabling early warnings of delayed processing with continuous monitoring, and enhancing visibility of investment utilization.

    Predictive analysis can be used to predict cashflow and the movement of actual cash for operational and investment purposes. Benefits include increase in cash utilization and investment return; more accurate investment planning; and enable strategic investment product offering.



  2. Risk Analytics: Agents have many touchpoints with customers and also with the insurer. It is conceivable that there can be some elements of risky behaviour that goes on during the sales and subsequent process for financial gain. We can utilize data analytics techniques to reduce risk and elevate controls such as anti-money laundering (AML) monitoring and fraud detection.



  3. Price Optimization: Price Optimization is a holistic pricing framework, which takes into account both the Expected Cost (claims, expenses) and Customer Willingness-to-Pay (elasticity, competitiveness). Most insurers are deploying their pricing and marketing decisions at portfolio level, based on aggregate level analysis. An optimized state includes defining customer demand elasticity in price and turn this into optimal pricing strategies.


 

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