2013 Valen PowerPoint Template - Amazon S3 · 2016-05-16 · Insurance technology is hot © 2016 Valen Analytics, Inc. $2.65B . Insurance Tech Investment . 2015 . $85M . 2010

Predictive Analytics May 16, 2016 ǀ AAM Investment Conference

Dax Craig, CEO

© 2016 Valen Analytics, Inc.

Software Company…or Insurance Agency?


Insurance technology is hot


$2.65B Insurance Tech

Investment 2015

$85M 2010

But, it was hot in the dot com era too


1990’s 2016

CHANNELPOINT


Meeting Expectations NOT

Sources: Comscore 2013 online auto insurance shopping report Google customer survey and focus group feedback

Shopping for auto insurance is generally unpleasant and time consuming.

Painful: “Somewhere between a root canal and watching ....”

I don’t like having to repeat 20 steps each time.

What happens today when consumers are dissatisfied?


Innovators see an opportunity to make the world better, faster and cheaper for

customers…


…and they go after the incumbent’s market


And here’s how it goes…


Break-through

New Thinking Catalyst


Break-through


Untapped credit market

DATA Market

segmentation

CUSTOMER ANALYTICS

Information-based Strategy

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=MVnjdhMuEyPTIM&tbnid=Hh7-NpUIbA4YLM:&ved=0CAUQjRw&url=http://womenforhire.com/company/capital-one/&ei=Nnb2Us_vK8vdqQG59YHADg&bvm=bv.60983673,d.aWc&psig=AFQjCNHYHuusTbW7d7vGvk5cWi5c3NEKXQ&ust=1391970144367559


Break-through


Nonstandard auto

DATA Predictive analytics

CUSTOMER ANALYTICS

Pricing algorithm


in pricing

leads to

Predictive analytics

adverse selection for competitors


Results: Top 10 now have 71% Market Share

50% 55%

60%

71%

1980 1990 2000 2014

Personal Auto Top 10 Market Share

Source: Insurance Information Institute


Results: Market Share Shakeup in Commercial


Break-through


Interest rate

P2P Lending Securitization


Why?

Why?



Calls 2016 an Innovation Crossroads

for Insurance


The need to make up low investment performance with underwriting profit is a

tremendous issue facing the industry


At the same time

analytically-

driven insurers

are winning the

market share

game


And insurance tech disruption is hitting an all time high

How Does Predictive Analytics Help Insurers Win?



Predictive Analytics = tool to combine with human expertise

No predictions are 100% Facilitate evidenced-

based decisions Know your customers,

know what you insure


-

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

30,000,000

35,000,000

0%

50%

100%

150%

200%

250%

1 2 3 4 5 6 7 8 9 10Risk Score

Written Premium Underwriter

Art Only = Good Results A

ctua

l Los

s R

atio

Writ

ten

Pre

miu

m

Underwriter only lift = 50%

75%

125%

Good Risk Quality Bad


-

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

30,000,000

35,000,000

0%

50%

100%

150%

200%

250%

1 2 3 4 5 6 7 8 9 10Good Risk Quality Bad

Written Premium Predictive Model

Science Only = Better Results A

ctua

l Los

s R

atio

Writ

ten

Pre

miu

m

Model only lift = 125%

50%

175%


-

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

30,000,000

35,000,000

0%

50%

100%

150%

200%

250%

1 2 3 4 5 6 7 8 9 10

Good Risk Quality Bad Written Premium Underwriter / Model Combination

Art + Science = Best Results A

ctua

l Los

s R

atio

Writ

ten

Pre

miu

m

Underwriter + Model lift = 185%

25%

210%

Early Wins with Analytics: LR improvement


79%

75%

57% 55%

48%

69% 66%

61% 59%

54%

2011 2012 2013 2014 2015

Accident Year Net Incurred Loss Ratio

Industry Avg Compared to Valen Clients

Source: SNL (Annual Statement Data)

Valen Customer Avg Industry Average

Loss

Rat

io

2x difference

Early Wins with Analytics: Premium Growth


20%

47%

63%

82%

8% 15%

21% 26%

2011 2012 2013 2014 2015

Direct Written Premium Growth

Industry Avg Compared to Valen Clients

Source: SNL (Annual Statement Data)

Valen Clients Industry

DW

P G

row

th

3x difference

Key Takeaways

Customers demanding change: make or break time for

insurers

Data analytics is the engine of disruption and innovation

– across industries

Competitive advantage comes from combining analytics,

expertise and strategy


Valen.com 800-280-3304

1730 Blake St., Suite 300 Denver, CO 80202

Dax Craig [email protected] linkedin.com/in/daxcraig


Documents

2013 Valen PowerPoint Template - Amazon S3 · 2016-05-16 · Insurance technology is hot © 2016 Valen Analytics, Inc. $2.65B . Insurance Tech Investment . 2015 . $85M . 2010