Arch Insurance's Valerie Turpin leverages predictive models in underwriting

As chief underwriting officer for property at Arch Insurance, Valerie Turpin looks at predictive models to determine risks for underwriting coverage against hurricane losses. 

The commercial property coverage Turpin works with has implications for other areas of insureds' business, such as lending. "My job is mostly focusing on managing the capital allocation, managing the acceptable level of exposure for the company and giving some direction about where the company wants to go for this line of product," she said.

Turpin has been in her role at Arch for five years and in the U.S. insurance industry for 13 years, including six years at AIG. She began her career as a loss prevention engineer in Paris, which led her into underwriting as an insurance career there before relocating to the U.S.

In her time in insurance, Turpin has seen a shift toward greater use of predictive models. 

"The industry is used to looking at the past and saying what is going to happen, but everybody now is switching to look at what happened today, to use a predictive model to see what is going to happen and how we should position ourselves," she said. "What I do like the most is that I always deal with finding a new solution to do something on a bigger scale."

For instance, in Florida, a state-backed insurance program called the FAIR Plan that helps homeowners who have trouble getting insurance because carriers and reinsurers backed away from hurricane risk, still left coverage gaps. Arch stepped in with a supplementary "all risk" solution, distributed by its excess and surplus department. That solution came about by listening to unsolicited feedback, according to Turpin.

"The FAIR Plan is cheaper, but you have much less. They had the obligation from lenders, so they were a little bit concerned about losing some of coverage," she said. "Brokers came to us, to ask if we could do everything the state doesn't do. I said we can do it. We can do it for a good price."

With Arch Insurance, Turpin also sought out partnerships with new startup insurtechs, like reThought Insurance. She worked with reThought to develop a commercial flood product.  

"The assistance Valerie provided to reThought was incredibly valuable, building an even stronger partnership to help deliver flood coverage to commercial properties," wrote Cory Isaacson, CEO of reThought, in his nomination of Turpin for WIL. "She was never afraid to entertain our new ideas and technology advances; in fact she adopted them, supported them and helped to make them better with expert guidance."

Turpin has been able to accomplish these advances in commercial property underwriting in a challenging market environment. 

"It's pretty tough for insurtech today. Five years ago, everybody wanted to put money into insurtech," she said. "Right now, putting money in insurtech is much more challenging because we have seen that the tech side is great, but the issuer piece is missing. We have the insurance piece, we don't have the tech piece, so we need to find the right level, the right middle."