Modeling Judgment-Heavy Specialty Risk
Years of precedent and claims data, turned into findings underwriters can apply to live risk.
Judgment-heavy specialty risk has long resisted modeling. Each risk turns on its own facts, terms and moving parts, which is why the market places such a premium on underwriting judgment.
Historically, analyzing specialty risk at this depth could take one to two years of work from a large, dedicated team, with no guarantee of a useful model, or of one that could evolve as new risks and claims emerge. Many have dismissed the effort as hopeless.
Lexcel is tackling this work head-on. On a recent project, the AI system we have spent two years building reduced that research effort from two years to a couple of months, with a lean team of experts. The actuary on the project called it the most interesting work he had ever been part of.
Working with leading underwriters, we are using that system to analyze years of precedent and claims data and applying the findings to underwriting existing risks.
To see what this looks like on your own book, contact Lexcel.