Identification of insurance agents generating transactions with an elevated risk of loss

Introduction: Raising the Bar in Operational Risk Management

In the insurance sector, controlling operating costs while maintaining agent performance is crucial. Initially, our client used a simple decision-making model that flagged high-risk transactions based only on limited, single-transaction data. While a start, this approach was insufficient for holistic risk management.

“Managing operational risk meant constantly identifying which agents and transactions posed the greatest threats, but doing so efficiently was a daily challenge for our team,” explains the risk management lead at the insurance company we supported.

The Problem: Limited Perspective on Risk

The initial model’s narrow focus on isolated transactions meant:

Lack of insight into the broader behavior of insurance agencies.
No comprehensive view of how an agent’s overall sales portfolio influenced risk exposure.
Challenges in proactively managing agents contributing to high operational costs.

The Solution: Complex Algorithm-Driven Agency Assessment

We implemented an automated risk assessment process that analyzes an agency’s quality using real-time data on current behavior and complete sales portfolios. The advanced algorithm identifies agencies generating risks linked to increased operational costs, allowing dynamic and ongoing monitoring.

Key improvements:

Holistic evaluation of agent activities over time rather than isolated incidents.
Continuous, automated assessment facilitating timely interventions.
Identification of patterns that indicate elevated risk of loss and inefficiency.

“We understood that effective risk management wasn’t just about spotting high-risk transactions, but about analyzing the broader behavior and sales patterns of agents. Thanks to advanced algorithms and continuous monitoring, we could accurately assess and respond to potential operational risks,” says our implementation team leader.

Results: Significant Cost Reduction

Our client achieved a 30% reduction in operating costs by focusing resources where risks were objectively highest, effectively managing their agents’ performance and related expenses.

Key results:

30% reduction in operating costs by focusing on high-risk agents
Real-time automated monitoring of agent behavior and sales portfolios
Improved prioritization and proactive management of operational risks
Increased efficiency through algorithm-driven risk assessment
Enhanced stability and predictability in operational performance

Conclusion:

From Basic Monitoring to Intelligent Risk Management

This case illustrates how moving beyond basic models toward automated, data-driven risk assessments empowers insurance firms to optimize agency portfolios, mitigate losses, and drive sustainable cost savings.

Results of the Change

BEFORE

A simple decision-making model, identifying transactions posing a high operational risk, using basic data on a single transaction.

AFTER

Automatic process of assessing the agency’s quality on the basis of its current behavior and sales portfolio, based on a complex algorithm identifying the risk of high operating costs.

EFFECT

Operating costs reduced by 30%.

success stories