Improve Predictive Accuracy with Advanced Loss Modeling

Accurately predicting the probability and severity of future losses is fundamental to underwriting. Traditional models may struggle with complex interactions or limited historical data. LLMs, often as part of broader AI predictive models, can analyze vast historical claims datasets, identify intricate patterns, and incorporate diverse external factors (e.g., economic indicators, weather patterns) to generate more accurate loss probability estimates. This leads to more precise pricing and better portfolio management. An example involves using an LLM-enhanced model to predict workers' compensation claim severity based on initial injury reports and industry trends.