Using Analytics to Create Rating Territories
One of the many areas of property and casualty risk analysis is the effective creation of rating territories based on some measure of risk. In Canada and the U.S., geographical areas are grouped into territories based on claim risk. For example, postal codes in Canada and the comparable equivalent of zip codes in the U.S. are grouped into rating territories.
As the use of analytics continues to adopt the more scientific or mathematical techniques, insurance organizations would be remiss in not attempting to deploy these disciplines.
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