Valen’s New Workers’ Comp Risk Score Gives Insight Into Loss-Free Policies

Valen Analytics asserts an industry first in its new Risk Score’s ability to enable underwriters to distinguish between risks even when the policyholder is claim-free, enabling significant loss ratio improvements.

(Rigger Peter Ramagos working on a TVA’s Douglas Dam project in Tennesse, 1942. Photo credit: Alfred Palmer/Library of Congress.)

Valen Analytics has released its new Risk Score for workers’ compensation within its InsureRight Platform. Last updated in 2010, the new Risk Score is enhanced by over 1,000 new variables, which the vendor says allows underwriters to select and price policies more accurately, and represents a three-fold improvement over the previous version. Valen describes the Risk Score as a comparison tool that separates good risks from bad on new and renewal policies. The Risk Score defines the best risks as those within the top 10 percent of premium, with the words risks representing the bottom 10 percent, in terms of loss ratio performance.

Dax Craig, CEO, Valen Analytics.

Dax Craig, CEO, Valen Analytics.

Valen asserts an industry first in the Risk Score’s ability to provide workers’ compensation insurers with better insight into historically loss-free policies and enable underwriters to distinguish between risks even when the policyholder is claim-free. The Risk Score accurately identifies a 30 percent loss ratio difference between the best- and worst-performing policies, according to Valen.

Comprehensive Data Strategy

Valen’s InsureRight platform was built using its contributory database, which the vendor claims to be the largest and most robust data consortium specifically build for predictive analytics. Insurers use the Risk Score for actionable and proprietary insights on individual policies and their entire portfolios, while avoiding the inherent sample bias associated with relying solely on their own data. In addition to sourcing from Valen’s in-house database, the Risk Score incorporates external data sources. This comprehensive data strategy drives pricing accuracy and business growth while allowing insurers to achieve efficiencies in underwriting decision-making, the vendor contends.

“We are building a partnership with insurers around actionable data,” comments Dax Craig, president and CEO, Valen Analytics. “Everyone benefits when insurers come together to pool their data, because it opens doors to solutions that push the industry forward. Valen’s new Risk Score is the next frontier, and a perfect example of how working collaboratively with insurers helps the market overall by using data to predict what will happen on loss-free policies.”

Anthony R. O’Donnell // Anthony O'Donnell is Executive Editor of Insurance Innovation Reporter. For nearly two decades, he has been an observer and commentator on the use of information technology in the insurance industry, following industry trends and writing about the use of IT across all sectors of the insurance industry. He can be reached at [email protected] or (503) 936-2803.

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