West Bend Mutual Insurance Co. (WBMI; West Bend, Wis.) selected Denver-based Valen Technologies' Risk Manager predictive underwriting software to improve underwriting profitability in the carrier's workers' compensation division. Risk Manager builds company-specific risk models based on a carrier's historical policy, claims, underwriting, loss control, application and billing data, then produces risk recommendations for new and renewal application data, according to Valen Technologies.
WBMI conducted an extensive search of market alternatives before choosing the vendor's solution, which includes a scoring module designed to produce accurate policy-level risk scores for policy acceptance and renewal decisions. "From the standpoint of narrowing all of the products out there down to a small group that has the technology and the science nailed down, there are not as many as we would've thought," says Rick Parks, the WBMI's assistant vice president of underwriting. "A number of vendors promote products that can do predictive modeling, but they lack the in-depth mathematical algorithms that make this product unique."
In vetting the alternatives, WBMI considered Valen's recent start-up credentials as a virtue. "Valen is nimble in addressing the needs of clients. When you're dealing with a larger firm, which may have many divisions, you can sometimes get a baked-in approach," Parks comments. "With Valen, we didn't have to ask questions like, 'What is it going to cost in time and money to customize this?'"
Valen worked directly with WMBI to develop mathematical models customized to WMBI's needs, and then helped WMBI implement the software within a variety of models available to agents through both Web applications and internal applications. "This is proving to be a very good solution for us and our agents," Parks asserts. "We want to see good things happen to our members because, all-in-all, your rates reflect the accumulated results of everyone. We see this as a big win all around."