How Predictive AI is Transforming Customer Targeting and Efficiency in Insurance
The insurance industry is at a crossroads, grappling with the challenge of inefficient customer targeting and high acquisition costs. For companies relying on traditional predictive models, the results can often feel uncertain, leading to missed opportunities and wasted resources. We sat down with Jay Fontanini, Principal at Fontanini Advisory Services, to discuss the need for innovation, particularly through the integration of predictive AI. Through his decades of insurance experience spanning The General, Bankers, Kemper, AIG, and others, Jay is confident that Predictive AI can provide the precision needed to enhance customer targeting, improve decision-making, and boost efficiency across the industry.
One of the biggest hurdles that insurers face today is the lack of confidence in their existing predictive models. Jay points out that many companies are stuck with inefficient customer segmentation, unable to properly identify and prioritize high-value customers. “If we’re not testing, we’re failing,” Jay argues, stressing the importance of testing at scale, such as through champion-challenger models, to evaluate the effectiveness of different strategies. By using data-driven insights to fine-tune marketing efforts, insurance companies can make more informed decisions and avoid costly mistakes that come from adopting untested strategies.
Incorporating external data and predictive AI offers a significant opportunity to refine existing models. Jay explains that using a third-party solution to complement internal data can result in more accurate predictions and better segmentation of inbound leads. Rather than relying on outdated methods, insurers can leverage advanced AI technologies to optimize their customer acquisition strategy. “You may find that, wow, that didn’t really benefit as much as we thought,” says Jay. “But that’s the beauty of testing—what works can be scaled, and what doesn’t can be dropped before significant resources are wasted.”
As the insurance industry continues to evolve, Jay believes that AI-driven change is inevitable. From improving operational efficiencies to driving down customer acquisition costs, predictive AI has the potential to revolutionize how insurers engage with their customers. “I think there’s a massive wave of technology change ahead, led by AI,” he concludes. The key for insurers is to embrace this transformation and leverage AI to create smarter, more profitable customer acquisition strategies while enhancing the overall customer experience.
