Utica National Uses SAS to Modernize Personal Lines Risk Models

The carrier is approaching a rearchitecting of risk models along the lines of what SVP Jose Trasancos calls a "rooftop" model, centered on customer and household.

Jose Trasancos, senior VP and senior personal lines officer, Utica National Insurance Group (New Hartford, N.Y.) says SAS is "the principal tool in the toolbox" in an effort to rearchitect risk models to fit a more customer-oriented, "wallet share approach," he shared in a conversation at the ACORD LOMA Systems Forum in Orlando, Fla.

Trasancos, who arrived at Utica National in Jan. 2012 from Narragansett Bay Insurance Company, has been tasked with modernizing and facilitating the rapid growth of Utica National's personal lines business. Rearchitecting the risk models within those lines is central to that effort, according to Trasancos.

"We're going to do it in a somewhat unconventional way, architecting to have significant integration across them so that they are not as beholden to line of business," Trasancos comments.

Utica National is approaching the risk models from what Trasancos calls a "rooftop" model, centered on customer and household. "This approach compels you to examine possibilities that emerge with regard to new efficiencies and improved customer service," he says. "It's a focus on share of wallet as opposed to share of market."

The approach naturally emphasizes cross-selling, but it also encourages thinking about customer lifecycle rather than considering a given risk in isolation. Trasancos explains: "Consider a recent college graduate with an entry-level job, an old car and modest positions — to an insurer that means minimum limits, liability and maybe a tenant's policy. Many carriers would look at that and say, 'That's a non-standard risk; we don't want to write that.'"

However, Trasancos notes, "that describes me at that stage of life, and today I'm an insurance agent's dream. When you think in terms of customer lifecycle, you look past that first six months to a succession of life events over the next 20 years that includes job promotions, getting married, buying a house and having children — there's a lot of money to be made over that lifecycle."

[For more on how insurers are increasingly competing on analytics, see 3 Ways Insurers Will Compete on Data in 2012.]

Trasancos characterizes SAS as Utica National's most important tool in the effort to rearchitect the carrier's personal lines risk models. "It takes you from ETL to model validation, and in some respects it is an excellent prototyping tool," he says. "It lets users represent models in a process flow in [the vendor's] Enterprise Guide product feature. You can put together graphical process flow."

SAS presents Trasancos' team with what he calls interesting analytical possibilities. "It allows us to bring various analytical tools to bear," he says. "Most such products tend to focus on one applied method, such as the generalized linear model, and they do it well, but they don't do anything else."

Anthony O'Donnell has covered technology in the insurance industry since 2000, when he joined the editorial staff of Insurance & Technology. As an editor and reporter for I&T and the InformationWeek Financial Services of TechWeb he has written on all areas of information ... View Full Bio