Predictive Modeling Applications for Personal and Commercial Lines

Rating Plans

• Class Plan Analysis: eliminates distributional bias in insurance pricing by evaluating rating relativities with multivariate analysis.
• Territory Redefinitions: provides new methods for developing territories that more accurately measure risk. (link to Chris’s monograph)
• Vehicle Classification: applies vehicle characteristics to enhance vehicle series rating for personal and commercial auto coverage.
• Tiering Plans & Underwriting Scorecards: uses a variety of risk characteristics to develop a scoring system for pricing and underwriting applications.
• Credit/Insurance Scoring: incorporates credit-based insurance scores into a company’s rating and underwriting plans, using either commercially available or custom insurance scores.
• Farmowners Pricing Scorecard helps an insurer more accurately identify risk to include different types of farms, equipment, personnel, etc.

• Claims Process Analysis: identifies key factors such as reporting delays, vendors, independent adjusters, attorney involvement, injury type and claimant characteristics and how they impact the claims process. Claims analysis goes beyond traditional claims auditing, which can show problem areas but cannot identify complicated patterns and trends nor evaluate key factors simultaneously. (link to Roosevelt’s monograph)
• Claims Value Estimation: provides estimates of the ultimate settlement values of claims based on their characteristics.
• Utilization Review: accounts for risk characteristics to determine provider performance levels.
• Fraud Analysis: determines likelihood of fraudulent claim activities based on the characteristics of the claim.

• Profitability Estimates: determines expected profitability after identifying the loss potential of a risk and comparing it to proposed premium.
• Customer Response Modeling: determines which customers buy or renew policies at the same rate to support more profitable decision making.
• Price Optimization: shows the influence of price, competition, and customer demand on the profitability and growth of an insurer.
• Marketing Solutions: evaluates how successfully marketing initiatives are identifying and attracting targeted, profitable risks.
• Agency Management: considers agency performance relative to the book of business.