Western Skies Adopts Gradient AI to Grow SMB Stop-Loss Business

May 9, 2023

The MGU took advantage of Gradient AI’s SAIL for its rich medical data lake and predictive analytics to tap into new markets.

By Anthony R. O’Donnell

Western Skies , a Las Vegas managing general underwriter (MGU), has selected Gradient AI’s (Boston) SAIL solution to provide stop-loss insurance access to smaller, self-funded groups.

Western Skies, a ManhattanLife (Houston) company and risk-bearing entity, is using SAIL to tap into new markets and offer more affordable insurance plans to small and midsize businesses, according to a Gradient AI statement. The company chose Gradient AI’s SAIL solution for its advanced AI and analytics capabilities that leverage its rich industry data lake of medical, lab, and prescription data.

Gradient AI contextualizes its engagement with Western Skies with reference to small and midsize businesses’ need for more affordable, self-funded insurance plans. Due to limited access to small business claims data that underwriters need to effectively assess group risk, stop-loss insurers have often declined to take on small business clients, the vendor notes. That includes Western Skies, which traditionally partners with brokers, general agents, and TPAs that represent companies with 150+ employees. Yet, this excludes a the large majority of the market, as recent data from the NAICS Association reveals that over 89 percent of the more than 18 million businesses in the United States operate with fewer than 100 employees.

With SAIL’s breadth and depth of data and predictive analytics, Western Skies can now extend its reach to the small business market of 25, 50, and 100 lives, according to Gradient AI. This opens opportunities for Western Skies to exponentially grow its prospective customer pool as well as its partnership potential with brokers, agents, and TPAs that work with smaller organizations, the vendor says. Gradient AI adds that SAIL’s analytics have also empowered Western Skies to move beyond traditional medical underwriting into the statistical probabilities behind financial underwriting, providing greater accuracy in assessing risk and pricing policies.

“Gradient AI’s technology is revolutionary and on the leading edge of the industry,” says Dave Kesler, VP, underwriting, Western Skies. “It has enabled us to innovate and deliver new insurance solutions to the market. With Gradient AI, we can combine our strengths from our traditional business with SAIL’s predictive analytics to reach new markets that were previously unattainable. This has been a game changer for Western Skies.”

Geographical Expansion

In addition to expanding its target market to large numbers of smaller employers, Western Skies is also expanding geographically, Gradient AI reports. Having found most of its success in the Southeast, the company is now leveraging SAIL’s vast data sets and capabilities to expand west and northeast, reaching new regions with its services, the vendor says. Western Skies can now accurately assess risk and compete against larger insurance providers as it taps into new markets, according to Gradient AI.

“We’re excited to partner with Western Skies, offering innovative new insurance opportunities to the small business market,” comments Stan Smith, founder and CEO, Gradient AI. “With this stop-loss insurance partnership, everybody wins. Employers and employees can obtain insurance at more competitive rates, and Western Skies and their partnering brokers, agents, and TPAs can now serve a new market segment.”