Valen Analytics (formerly Valen Technologies), a Denver-based provider of proprietary data, analytics and predictive modeling aimed at supporting insurance carriers' underwriting profitability, has expanded its InsureRight solution — launched in 2011 as an exclusively workers' comp product — into what the vendor characterizes as an all-lines-of-business, full-featured solution made up of two components: Manage and Predict. The solution will give carriers statistically valid portfolio insights that they can distribute to individual underwriters in a simple, easy-to-understand language, according to the vendor.
“Valen Analytics signals a more holistic product offering built off of our contributory data and predictive modeling platform," comments Dax Craig, CEO Valen. "This broader application of advanced analytics allows carriers to manage their portfolio against a rich industry data set with detailed policy and claims data. And, we recognize that carriers need options when implementing advanced analytical tools in a way that works for their organization, which our new capabilities provide.”
Using InsureRight, carrier clients will be able to derive performance metrics and portfolio risk characteristics using their own data coupled with Valen's contributory data set, reducing the selection bias inherent to underwriters making decisions based solely on their own experience, the vendor claims.
Small to mid-sized insurers have suffered with three challenges associated with data analysis for underwriting, according to Karlyn Carnahan, an analyst with Novarica. “The first challenge carriers have had is to assemble enough data to be statistically credible,” Carnahan relates. “The second challenge is trying to determine what the predictive model should be — many carriers lack sufficiently sophisticated analytical capabilities. The third piece is how to operationalize — how do I help underwriters at the point of sale?”
InsureRight seeks to address those challenges on behalf of clients, according to Valen's Craig. “Although many large insurance carriers already utilize predictive analytics, small and mid-sized insurance carriers don’t always have the in-house resources necessary to build their own predictive models," he says. "Not only does the InsureRight Platform help carriers interpret their own data, but our models also source anonymous information to which many carriers do not have access to help prevent selection bias.”
Craig characterizes the InsurerRight offering as addressing an industry need for greater access to actionable data and enable carriers to isolate the best performing policies within certain segments. Valen's CEO offers as an example the problem of many carriers avoiding high hazard group policies in workers compensation. "If they leverage the portfolio risk insights included inManage and Predict, they can identify the best performing high hazard group policies that have the highest potential profit margin, which others avoid," he elaborates. "Because these policies are often avoided, carriers have very limited, if any, information about them. The InsureRight Platform contains actual performance data on these types of policies, giving carriers access to additional information.”
By using InsureRight, carriers have access to a wide breadth of analytics and portfolio management features as part of the Manage component of InsureRight, which includes the following, according to a vendor statement:
Actionable Data: Carriers can now use a rich industry data set to act on trends in risk quality by comparing actual quotes and bound price levels, and better understand market positioning;
Searchable Inputs: Allows production efficiency to be measured over time and against historical benchmarks;
Enhanced Portfolio Management: High level trend analysis allows carriers to reach ongoing portfolio profitability goals by geography, business unit, agency, underwriter, or other dimensions of interest; carriers have the ability to manage portfolio performance across segments of interest such as territory, class of business, policy size, etc.;
Dynamic Reporting and Executive Dashboards: This new analytical tool provides automatically‐updated routine data feeds, giving carrier executives a comprehensive view into their overall market position, portfolio risk, and prediction‐indicated profit and loss; InsureRight Platform is highly flexible, configurable, and provides a richness of data and interactive drill‐throughs, from summary information down to individual policy term information;
Predictive Analytics: The InsureRight Platform continues Valen’s predictive analytics and scoring functionality and provides users with detailed context on individual predictive scores and performance indicators against actual results;
Visualization: Carriers leveraging predictive scores at the transactional level will have access to state‐of‐the‐art visual analytics for model monitoring and performance, model usage, and adoption metrics.
Anthony O'Donnell has covered technology in the insurance industry since 2000, when he joined the editorial staff of Insurance & Technology. As an editor and reporter for I&T and the InformationWeek Financial Services of TechWeb he has written on all areas of information ... View Full Bio