LexisNexis Introduces Underwriting Tool for Small Business Risks

LexisNexis Risk Solutions announces the launch of LexisNexis Attract for business owners underwriting, a proprietary model providing commercial insurers with high match rates and accurate loss prediction of small commercial business owner risks.

Attract enables insurers to improve pricing segmentation and identify profitable market segments within their books of business and prospects.

"Hit rates for business credit on small commercial insurance risks have ranged from 40 to 50 percent on average, but using Attract with LexisNexis business data assets can lift hit rates as high as 90 percent," claims Ernie Feirer, vice president and general manager, commercial insurance, LexisNexis. "The Attract for business owners underwriting model was built on consumer credit from the business owner community and developed using policy and loss data representing over $1.6 billion in commercial premiums to provide a significant lift in loss predictability."

"The use of data and analytics in commercial insurance continues to grow as unique data assets are being used in different ways to better predict risk and align price," says Deb Smallwood, founder, Strategy Meets Action. "In the case of insurance for small business owners, specialized scoring models offer a valuable opportunity for insurers to enable straight through processing and pricing precision automation, an advancement from the traditional means."  

While insurance carriers typically use business credit for underwriting, the analysis of historical data combined with personal credit attributes of the small business owner has proven to be much more predictive of loss.  A LexisNexis Attract score ranks commercial insurance risks by predicted loss ratio and/or loss frequency.