Valen Customers Grew Three Times Faster than Work Comp Industry and Saw 30.8% Loss Ratio Improvement from 2011-2015
DENVER – September 8, 2016 – Valen Analytics®, a provider of proprietary data, analytics and predictive modeling for P/C insurers, today announced the 2011-2015 results for a dozen workers’ compensation customers totaling $1.5 Billion in premium. Valen customers collectively saw an average of 30.8% loss ratio improvement over the five-year period, double the industry average of 15%. Simultaneously, these carriers experienced 82% direct written premium growth compared to 26% for the rest of the industry.
“These results support an important belief we have at Valen that success in predictive analytics goes far beyond the predictive model and has everything to do with how you manage your goals, measure progress and adopt analytics into your corporate culture,” said Dax Craig, CEO of Valen Analytics. “The historical performance of carriers included in this study includes those who were worse off than the industry average five years ago and those who have always been market leaders. What’s incredibly compelling is that as a result of our customers’ commitment to properly implement predictive analytics, they are all now leading the market while experiencing tremendous growth.”
According to the recent March 2016 A.M. Best Survey, more than 95% of carriers reported only 3.5% or less loss ratio improvement as a result of a predictive analytics implementation. Based on proprietary research, Valen attributes the difference between their customers and the market to superior risk selection and pricing as a result of merging the underwriter’s experience with the predictive model. The combination between the two provides an 185% improvement (lift) in risk assessment accuracy, compared to the lift of predictive model (125%) and the lift of underwriter judgement (50%) individually.
“I joined Society in 2008, right as we implemented the Valen solution and our first predictive modeling venture. I was nervous, having just come from a company with a poor experience rolling out a personal lines predictive model,” says Bill Reeves, COO of Society Insurance. “Valen helped train our underwriters to combine their expertise with the predictive scores. The model has helped us properly price risks and not take too aggressive a stance because the market called for it.”
Valen Analytics and Karlyn Carnahan, Research Director at Celent will be hosting a webinar on Thursday, September 22 at 2:00pm EST to discuss these findings and what it means for the insurance industry. Matt Whisenant, VP of Underwriting at FHM Insurance Company will be a guest speaker. Registration is available online.
“The true test of whether it’s worth investing in predictive analytics is whether a carrier will achieve significant sustainable results”, said Karlyn Carnahan, Research Director in Celent’s insurance practice. “The results seen by these carriers are remarkable and continues to develop favorably the longer analytics are being used. Carriers that continue to rely purely on individual underwriting judgment will find themselves at a disadvantage to those who are finding new sources of insights and applying them in a systematic manner to improve profitability. “
About Valen Analytics
Valen Analytics is a provider of proprietary data, analytics and predictive modeling for property and casualty insurers. We work with insurers who are actively looking to utilize modern approaches to pricing, risk selection, claims triage, and premium fraud. Our customers are focused on increasing competitive pressures, fighting adverse selection with innovative solutions, and raising awareness for the impending “experience gap” with initiatives such as Insurance Careers Movement. Our customers span many lines of business including Homeowners, Personal Auto, Workers’ Compensation, Commercial Auto, Commercial Package, Commercial Property, and BOP. Learn more about Valen at www.valen.com.