Risk and Underwriting

Premonition is well-positioned to become an industry leader not just in legal analytics, but in analytics.

Exponential Investor

 

Every underwriter knows the value of Predictive Analytics. However, underwriters are constrained to “data mapping” their own database of cases or access those available from ISO. This, together with the insured’s application, generally serves as the sole means of an underwriter making a data based decision on risk and exposure.

No more.

Premonition has created a unique database with >87% of all civil cases filed in the United States (criminal cases coming soon!). This database holds more data than all of our competitors combined!

Knowing whether your applicant is flush with litigation

What does this mean to the underwriter? It is axiomatic that knowing whether your insurance applicant, or in the case of an entity policyholder, the main individuals who control it, has been the source of litigation, any litigation, is a factor in underwriting. This is especially true in professional liability areas such as D&O and E&O, but also in any area of liability insurance. And the smaller or more individually controlled the organization, the more important it is.

Unfortunately, insurance applications and publicly known data (SEC, blogs, media articles etc) only contain a portion of the information about litigation. Insurance applications, for example, only ask, when they do ask, about prior “claims or losses” in the area of the liability coverage being applied for.

However, would knowing that your small company D&O CEO, or E&O professional, is being sued by creditors, or is in the middle of a messy divorce, be helpful to your average D&O or E&O underwriter? Absolutely!

With Premonition’s litigation database, the liability underwriter can quickly discover whether and to what extent his or her insurance applicant, or the key people that control it, has been sued, is suing others, and why? At minimum, this increases the data based decision making. At best, it becomes a controlling factor in risk based underwriting analysis.

LPL Underwriting

For the LPL (Lawyers Professional Liability) underwriter, the Premonition Database together with its proprietary analysis of “win rates” can be golden. The reality is that the more often a lawyer loses as compared to his or her peers, the more likely they will eventually get sued.

As any LPL underwriter will tell you, lawyers who “occasionally” take cases away from their core expertise, are much more likely to be sued for malpractice than those who don’t. Armed with the Premonition database, an LPL underwriter can see how often its insured takes cases outside of their expertise, something not indicated (or at least not with sufficient detail) on the LPL application.

Premonition’s model is simple:

• Acquire proprietary Big Datasets
• Apply Artificial Intelligence and Machine Learning to them
• Arbitrage the market inefficiencies we find.

Premonition is looking to apply its Artificial Intelligence system to new industries by providing partners in those industries with solutions that are complimentary or exponentially better than their existing offerings.

Perception/Reality Arbitrage

Acquiring Proprietary Big Datasets

Assembling data from disparate sources to form proprietary datasets.

For example, Premonition assembled and normalized data from the 3,124 Circuit Courts to build the World’s largest litigation database.


Merging databases to form proprietary datasets

For example, by mapping insurance industry Lines Of Business(LOB) classifications to Court Case types, we were able to produce a new proprietary dataset analyzing litigation effect on the insurance industry

Applying analytics and AI to enhance data and form proprietary datasets

For example, Premonition analyzed a combination of litigation and stock market data to find out:

  • Which industries and companies were significantly affected by their litigation results?
  • What the typical effects were?
  • What the typical lead time was between litigation outcome and balance sheet/stock price effect?

Apply AI & Machine Learning to our proprietary datasets

The Premonition system can read and analyze over 50,000 documents a second. 
It enables us to ask questions that have never been possible before. For example:

  • Who wins? – Instead of who do we think is good?
  • Testing different strategies. – Instead of guessing which might work.
  • Does A affect B, and if so why, and by how much? What about C thru Z also?
  • The insights are limited only by our imagination.

Arbitrage the market inefficiencies we find.

Many industries are driven by antiquated, unproven or misleading measures of performance.
For example:

  • UK Law Firms’ choice of Barristers is 38% worse than random.
  • Clients cannot determine the quality of legal advice – Couwenberg et al, 2009
  • Grades are no strong indicator of hiring effectiveness – Schultz & Sedeck, 2011

You can find more surprising findings here.

By partnering with existing market players, we can extract far more valuation from our insights than simple data sales or consulting.

Results:

Law:

Premonition built a system to download and analyze court data at scale, in a few months.
Premonition invented the concept of attorney “win rates”, disrupting the legal industry.

Insurance Loss Data:
Premonition developed a loss database 30x larger than the industry leader, in a month.

Lobbying:
Premonition built a system to determine which lobbyists win get what bills passed with which committees, agencies and politicians in a week.

How can you partner with Premonition to disrupt your industry? Let’s talk.

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