From the Founder…
Fresh out of college and with an idealistic view of how companies should treat their customers, I embarked on a cross-country road trip when one of my brand new tires went flat. I went to the big box retailer’s location near where the flat occurred to get it fixed under the warranty. Imagine my surprise when the manager told me, “It’s not our problem and I don’t want to fix this because it hurts my store’s profitability.”
Flabbergasted by the response, I asked him, “What would your founder and CEO (who was well known for his commitment to customer service) say if I called and told him what you just said?” The manager pondered my question and finally reversed his approach but not before he had sullied the reputation the founder had worked so hard to build.
I was further disillusioned at my first job out of college where I was again confronted with a lack of commitment to the customer. I was taken aback during my first week on the job as I watched the customer service reps refuse to answer support calls after 5 pm, because they “didn’t have to.” There had to be a better way to run a company, and to build a culture that stood behind its promises and put the customer first.
Key to building a customer-centric company is believing that your products actually serve a purpose. Fast-forward to 2004, with a successful entrepreneurial career underway, I partnered with Richard Vlasimsky, an experienced consultant with a strong background in statistics, to start Valen. We started Valen on the two key tenets that our products must provide demonstrable return on investment for the customer and have a positive effect on the good of man.
Insurance serves an important common good, by allowing all of us to share risk for a small fee (premium) so that an accident or a storm does not ruin us financially. The problem that insurance carriers face is that the people sharing the risk are not equal – some policyholders are higher risk and some policyholders are lower risk. As a result of policyholders paying the same rate, low-risk policyholders subsidize higher risk policyholders. It is difficult for carriers to determine the high risk and the low risk due to an asymmetry of information between the carrier and the insured.
Valen started out by building predictive models in several lines of business to help insurers make more consistent, accurate, and profitable business decisions.
With the twists and turns we all face in growing our companies, the one constant for Valen is our entrepreneurial spirit, and an unending commitment to the customers we serve and the promises we make. It inspired us to create the first data consortium for underwriting analytics that enables the mid-size and small carrier market to more effectively compete with top-tier carriers. We invented the analog to credit scores with our industry-standard predictive modeling product in workers’ compensation, and our fully hosted platform takes the burden off of our customers’ IT resources.
And we still feel like we’re just getting started.