FHM Insurance, a workers' compensation carrier based in Florida, was struggling through what CEO Matthew Lupino calls "a few subpar years of business." Looking to gain an underwriting edge, the company partnered with Valen Analytics in 2013.
FHM was looking for an analytics model that provided a consistent measure of risk on new business, rather than relying on individual underwriters’ evaluations, Lupino explains.
“We wanted a tool that would allow us to give each underwriter the same level of authority, but rate risk consistently” said Lupino. “This model allows us to have an initial set price that underwriters can deviate from.”
Two years after adoption, FHM is one of Valen’s most successful clients, according to the companies. Valen’s technology compares individual businesses to their relative market, providing a score for underwriters to work from. The higher the score, the more confidence Valen’s system gives underwriters to rate it. Implementation of the software spanned one year, according to FHM.
Underwriters still play a key role in onboarding new clients, Lupino said, acknowledging the Florida insurer is more reliant on Valen’s technology when business is valued under $100,000 than over. Some non-analytical components, Lupino says, are involved when evaluating risk valued at more than $100,000.
“We look to eliminate model risk on larger business,” said Lupino. “By not blindly relying on it, underwriters feel even more engaged in the process. They are able to use their experience, sources and gut to make key decisions.”
Valen brings in more data than any workers’ comp insurer can gather, Lupino added. FHM is looking to further leverage Valen’s analytics suite. The insurer is working on an update to its current software as Valen continues to improve on its data banks. Additionally, FHM is likely to adopt a possible claims analytics model Valen is working on, Lupino says..
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