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This review paper explores the significant advancements in predictive modeling for insurance pricing, emphasizing its role in enhancing risk assessment and customer segmentation. The paper begins with an overview of the evolution of predictive modeling in the insurance industry, tracing the shift from traditional methods to modern, data-driven approaches powered by machine learning, artificial intelligence (AI), and big data. It highlights how these advancements have improved the accuracy of risk assessment, enabling insurers to develop more precise pricing strategies. The paper also discusses the importance of customer segmentation and personalization in insurance pricing, showcasing how advanced analytics can lead to more tailored and fair premiums, thereby improving customer satisfaction and retention. Additionally, the review addresses the challenges of implementing these advanced predictive models, including technological integration, ethical concerns, and regulatory compliance. The paper concludes by identifying future trends and potential areas for further research, such as real-time data, explainable AI, and ethical AI practices, which are expected to shape the future of predictive modeling in the insurance industry. Keywords: Predictive Modeling, Insurance Pricing, Risk Assessment, Customer Segmentation, Machine Learning.
Adeniran et al. (Fri,) studied this question.