Machine Learning for Insurance Underwriting
How Soteris Can Drive Down Your Auto Insurance Loss Ratio
Soteris applies new thinking and methodology to auto insurance risk selection. Rather than categorizing risks as bad vs. good, or risky vs. safe, we score risks based on their rate adequacy. In other words, we determine how the rate charged stacks up against the anticipated losses.
The process begins with an analysis of your loss data and policy activity. We use machine learning to understand the entire policy evolution, including when and how claims have occurred in your policy lifecycle. Soteris harnesses the power of machine learning to pinpoint your actual loss drivers, based on the combination of a multitude of factors. This analysis goes far beyond human capacity, creating a unique dataset that combines with the Soteris algorithm to fuel highly accurate risk scoring.
The Soteris Risk Score is at the heart of our solution. Our SaaS platform integrates with your policy administration system and individually scores each risk’s expected loss ratio in less than one second. Scoring can be triggered at Rate Call 1, Rate Call 2 or both. Finally, you can evaluate your book on a quote-by-quote basis while leaving all segments turned on. You can quickly control your loss ratio by simply avoiding inadequately-rated policies.
Using Soteris, you can set your risk threshold or rate-adequacy tolerance to precisely target your loss ratio and earned premium objectives. You can be as aggressive or as conservative as you wish, and you can adjust your threshold anytime from your policy administration system. This equips you with a much higher degree of control and gives you the levers needed to achieve your loss ratio and premium objectives.
With the Soteris scoring system, the effect of scoring threshold changes, rate filings and other market changes can be seen within days, rather than months. This enables you to test and refine in more frequent iterations and quickly adapt to changing market conditions. Finally, you can shift from a reactive to a proactive stance – positioning your company to effectively capture market share.
Armed with Soteris intelligence, you can refine your rate filings and identify underwriting “sweet spots.” With more precise rate filings, you can quote and accept a higher percentage of each segment, achieving even greater profitability by increasing rate adequacy throughout your portfolio.
Over time, Soteris scoring serves as an early warning system, giving you real-time evidence of how well your policies are priced. If you see that a higher percentage of quotes start to exceed your risk threshold or you see changes in the percentage of quotes that are converting to bound policies, you will know that adjustments may be needed.
