MINNEAPOLIS, April 10, 2012 /PRNewswire/ -- FICO (NYSE: FICO), the leading provider of analytics and decision management technology, today launched a new solution aimed at improving the ROI for predictive models used in insurance. FICO® Model Central™ Solution for Insurance enables insurers to reduce model deployment times by as much as 50 percent, while also providing the first indications that a model's performance may be damaging profitability.
Insurers increasingly use predictive analytics models in mission-critical decisions, but today's model management processes hinder performance. Most insurers have inconsistent or inefficient methods for tracking model performance, updating models and implementing new models in production systems. In a recent FICO survey, 64 percent of insurers said they lacked the ability to rapidly deploy or update models to maximize business impact. One-third of insurers surveyed said that implementing a new model takes four-to-six months, and 51 percent said it takes six months or longer.
"Leading insurers rely on analytics across lines of business for marketing, customer management, underwriting, claims, and fraud prevention," said Russ Schreiber, FICO vice president and head of the company's insurance practice. "High-performing analytics are a cornerstone of high-performing insurers. The value Model Central offers is the ability to rapidly identify when model performance is drifting and then accelerate the deployment of more predictive models regardless of the modeling technology used."
"From mismatching product offers to getting the price wrong to missing fraudulent claims, weak analytic models hurt profitability," said Russ Schreiber, FICO vice president, who leads the company's insurance practice. "Yet in our recent survey, just 18% of insurers said they had a well-organized system for managing model performance. New insurance regulations such as Solvency II in Europe and similar proposals in the U,S. mandate that insurers do better than this."
FICO® Model Central™ Solution for Insurance provides a complete environment for managing predictive models in a reliable, automated and integrated way. It presents a management dashboard of overall model health, providing an "early warning system" that alerts personnel to performance degradation so they can take action before business decisions are impacted. It also creates a standardized process for easy management and monitoring of models, which have become central to business decisions made by insurers, and deploys new models quickly and efficiently – up to 50 percent faster – for improved time to value and return on investment.
Furthermore, FICO® Model Central™ Solution for Insurance coordinates model validation, task tracking and management reporting, storing complete and annotated audit trails to satisfy compliance requirements. It integrates models from various programming languages into one environment, further saving time and IT resources. It also improves business outcomes dramatically with the integration of simulation and testing capabilities and optimization of decisions.
For insurers operating within the European Union, FICO® Model Central™ Solution for Insurance lays a foundation for meeting Solvency II's capital adequacy and risk management requirements. It provides a view across silos, including geographies, lines of business, and process areas; access to legacy assets; improvements in data quality and availability, as well as advanced management of analytic assets; and complete transparency for audits. These capabilities also address insurance regulations in other parts of the world.
"An analytics-driven business organization is where insurers have to be," said Karen Pauli, a research director at CEB TowerGroup. "Those analytics need to be quickly deployed and actively managed to maximize their value to the business. Insurers that excel at the operational side of predictive models will have a competitive advantage in the market."
FICO® Model Central™ Solution for Insurance joins a suite of FICO analytics solutions for insurance, including FICO® Insurance Fraud Manager for healthcare insurance fraud, waste and abuse; FICO® Claims Fraud Solution for personal and commercial lines fraud; FICO® Blaze Advisor® for business rules management and legacy system modernization; custom models and decision optimization for insurance underwriting and marketing; and credit-based insurance risk scores.
FICO (NYSE:FICO), formerly known as Fair Isaac, delivers superior predictive analytics solutions that drive smarter decisions. The company's groundbreaking use of mathematics to predict consumer behavior has transformed entire industries and revolutionized the way risk is managed and products are marketed. FICO's innovative solutions include the industry-leading solutions for measuring credit risk, managing credit accounts, identifying and minimizing the impact of fraud, and customizing consumer offers with pinpoint accuracy. Most of the world's top banks, as well as leading insurers, retailers, pharmaceutical companies and government agencies, rely on FICO solutions to accelerate growth, control risk, boost profits and meet regulatory and competitive demands. Learn more at www.fico.com. FICO: Make every decision count™.
Except for historical information contained herein, the statements contained in this news release that relate to FICO or its business are forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially, including the success of the Company's Decision Management strategy and reengineering plan, the maintenance of its existing relationships and ability to create new relationships with customers and key alliance partners, its ability to continue to develop new and enhanced products and services, its ability to recruit and retain key technical and managerial personnel, competition, regulatory changes applicable to the use of consumer credit and other data, the failure to realize the anticipated benefits of any acquisitions, continuing material adverse developments in global economic conditions, and other risks described from time to time in FICO's SEC reports, including its Annual Report on Form 10-K for the year ended September 30, 2011 and its last quarterly report on Form 10-Q for the period ended December 31, 2011. If any of these risks or uncertainties materializes, FICO's results could differ materially from its expectations. FICO disclaims any intent or obligation to update these forward-looking statements.
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