Dear Annie Analytics: I love my insurance carrier!

Analytics Advisor, IBM

For all the business questions you’ve been too afraid to ask, Annie Analytics has the answers. Here, Annie advises Tanya in Tacoma, who finds herself in hot water with her friends. Tanya actually likes her car insurance company, but her circle of friends is in a very different situation. Not only are they unhappy, but they're all actively looking for new car insurance. Has Tanya just gotten lucky, or can she help her friends also find car insurance happiness?

Dear Annie Analytics,

I’ve had the same car insurance provider for years, and have been very happy. My premium is reasonable, my liability coverage is excellent, and recently they even reached out and put me in a new program that lets me lower my deductible every year. However, I'm finding my experience is not mirrored by that of my girlfriends in our local coffee group. They all feel their insurers are not responsive to their needs, or they have rates and deductibles that are inexplicable in terms of age, driving history or even demographics. While it's not surprising that all of them are looking for new insurers, I'm wondering why I am the exception. Was I just lucky? Should I tell my friends about my wonderful insurer, or would that be jinxing myself? Am I a bad friend?

– Tanya in Tacoma Tanya in Tacoma,

Well, these days everyone is a bit anxious about no, you are not being a bad friend. And you can feel free to tell your friends about your great car insurance provider without worrying about jinxing yourself. Insurance is not about luck—and while you may feel like an exception now, that situation is rapidly changing.

Insurance is basically a type of risk management, where you pay for coverage to hedge against the risk of a loss due to an accident or other occurrence. Insurance premiums can vary based on a range of factors—for example, a first-time teenage driver is a greater risk and will pay a higher premium than a mature driver. Today, however, advanced analytics solutions are transforming the insurance industry. Where once insurers had to rely on internal loss data and broad demographic markers for guidance in setting premiums and deductibles, analytics are now giving them more detailed information about their customers.

Tanya, your insurer’s decreasing deductible program is probably the result of its analytics assessing you as a safe risk. It’s not luck; analytics is responsible for your situation. For example, studies have found that people who pay bills on time also tend to be safer drivers. So car insurance companies are using analytics to process data from credit bureaus against their own internal data, for more targeted offers—and lower premiums and deductibles—for their clients.

So spread the word about your wonderful insurer with your friends. As advanced analytics transform insurance, we will all benefit.

– Annie Analytics