Stop Leaving Profit on the Table | Verikai

Stop Leaving Profit on the Table

While change is no easier for our customers than it is for anyone, we have the ability to show our potential clients exactly what they will gain from working with us before they buy. Or, put more bluntly, exactly how much money they are leaving on the table if they don’t.

No one likes change. It’s difficult, it’s expensive, and it’s disruptive. During the six years I spent selling core systems at Guidewire, I heard this time and again. We were asking company executives to spend millions of dollars, over many years, without irrefutable proof of a return on their investment. Unfortunately, that’s usually the case with operational technology. It’s a leap of faith.

However, that’s not the case here at Verikai. While change is no easier for our customers than it is for anyone, we have the ability to show our potential clients exactly what they will gain from working with us before they buy. Or, put more bluntly, exactly how much money they are leaving on the table if they don’t.

Data Validation

The beauty of what we’ve built with our Capture platform is that we give clients the ability to validate their own data to see the results for themselves prior to committing to a long term partnership. The numbers don’t lie — especially not when they are your numbers.

Simply upload your historical censuses and claims data across your book of business, and our platform provides you with the scores that Capture would have predicted. Compare those to the actual results or your own internal scores, and you have a study that proves the efficacy of Capture for Health.

Top 10 / Bottom 10 Analysis

Now the question becomes how much value a more accurate score provides you. In addition to being able to see how well we predicted performance across your book, one of the most illustrative features of the Data Validation report is the Top 10 / Bottom 10 Analysis, which quantifies the value of our Capture Score.

In this analysis, we offer a comparison of how Capture would have scored your book of business at the time of underwriting and compare it to how your insurance manual would have scored the same groups.  The basic idea is that the better score should predict more profit in the lowest risk groups and higher losses in the riskiest groups.  Best of all, the difference in profit between the two scores is the actual quantifiable opportunity at stake.  

Your Top 10%

This figure (below) represents the highest risk groups as identified by this carrier’s score versus the set of groups as identified by Capture. The reason why we focus on the “tails” or top/bottom 10% of a carrier’s groups is because of the outsized impact on profit and loss in the tails.  On average, your worst performing 10% of groups are costing you 40% to 50% of your profit, according to our national database.

In the example below, this carrier underwrote its riskiest groups with a predicted profit of $3.7 miilion.  When we re-sorted the same groups using Capture scores, we found that our riskiest groups actually lost $10.9 million based on real results. Practically speaking, by not writing these groups, you’d save $14.6 million right away by using our scores.

Your Bottom 10%

This figure represents the lowest risk groups, or in theory, the best performing groups in your portfolio in terms of profit. If you’re going to stop writing your worst groups, it’s important to replace that volume with profitable groups. Your ability to identify lower risk groups is critical to being profitable and competitive, and Capture for Health helps you to identify profitable groups that your competitors cannot.

In this example, the carrier predicted that the lowest risk 10% of groups would generate a profit of $3.6 million.  When we scored and sorted these same groups using Capture, we found that our lowest risk groups actually generated $17.9 million in profit.  The difference is $14.3 million, which means lost opportunity to the carrier.

The difference between actual and potential profit can be enormous! With just a simple tails analysis as shown above, we can help this carrier to increase its profit by a total of $28.9 million.  This represents a potential increase of 93% above the original profit of $32 million.

Embracing Change

Rarely, do you get an opportunity to try something before you buy it.  Ready to stop leaving money on the table and grow your bottom line? Click here to schedule a demo with someone on our team to discuss what Capture for Health can do for your business and how easy it is to see the numbers for yourself.

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