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Home Case Study: Claims Frequency Predictions for Book Acquisition

Home Case Study: Claims Frequency Predictions for Book Acquisition

Preeti Sampath
July 23, 2023
Miniature model of house; Person in background with hands spread

Pinpoint helped reduce Loss Ratio by 7 points by focusing on Book Acquisition Strategy

Client: National Home Insurance Carrier
Line of Business: Home Insurance
Number of Policies: 200,000
Average Premium: $2,813
Use Case Focus: Book Roll 

A national home insurance carrier used Pinpoint’s platform to generate Loss Predictions. Their existing models were only available after the application is fully developed and all reports are ordered (e.g. Property Loss Reports, Inspections, Replacement Cost Reports, Credit, Prefill). In contrast, Pinpoint predictions are available before the application is developed, as soon as a customer name and address is known.

Hand with pen; document labeled "Homeowners Insurance Policy"

Loss Prediction Claims Frequency Results

Achieved a 7x Loss Ratio (LR) Spread

The client generated custom non-cat frequency predictions by simply dropping a file into Pinpoint’s fully automated platform with results available within 24 hours. The highest 5 percent of Pinpoint’s frequency predictions had an actual LR of 92%; the lowest 5 percent had an actual LR of 13% (over 7 times lower)

Predicted a 5x Claims Frequency Spread

Pinpoint’s Lift Chart UI also shows actual results for the frequency prediction. The lowest segment had an actual non-cat frequency of only .024, and the highest had .113. Like the LRs, this 5x spread is available prior to eligibility, with only a prospect’s name and address.

Unlocked 7 Loss Ratio Points

Pinpoint’s ROI Calculator revealed a loss ratio reduction of 7.03 points in the first year, which was independently validated by the client. For a book this size, this translates into $58M, with an expected three-year savings of $335M.
Homeowners Insurance Lift Chart

ROI Calculator Results

Result 1

The carrier unlocked a one-year loss ratio reduction of 7.03 points with Pinpoint risk selection, and an expected reduction of 14.9 points after three years

Result 2

The client saw a 1st-year ROI of over $58M and a total 3-year ROI of over $335M for their carrier’s homeowners book of business using Pinpoint Loss Predictions.

Our ROI calculator incorporates the predictive model’s lift by decile to project how new insights can prioritize actions to align with the carrier’s goals of profitable growth.

Why Work with Pinpoint?

Pinpoint’s Lift Charts allow carriers to identify individuals with an exceptionally high loss ratio for whom they do not have an adequate rate. This early prediction, available as soon as they have someone’s name and address, helps the carrier flag an alternate application journey for that potential insured. Pinpoint’s Loss Predictions can help unlock a new source of intelligence for home carriers to fast-track their profitable growth.

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