The Double-Edged Sword of Data Science

Although data science has been a huge help to the insurance industry, it brings its own risks too and insurers must ‘understand the risks rather than go in blindly’, according to data science lead...While the focus for data science is often on algorithms and other tools, it is essential not to overlook whether the database due to be used is indeed relevant to the population being served. For example, there’s no point in building models for young drivers using data from experienced drivers, or using data from rural areas for a model concerning London.

Max Ang, senior analyst in the insurance practice at Celent, noted that this is a particular issue with composite insurers because they have siloed systems.

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