The MEMIC Group, a leading workers’ compensation insurance provider focused on delivering proactive risk management and claims solutions, has experienced a marked uptick in reserving accuracy following the implementation of an AI-enabled prediction model from Gradient AI, a prominent enterprise software provider of artificial intelligence tools for the insurance industry. In the wake of a six-month implementation performance analysis, MEMIC is seeing meaningful improvements in case-level reserves and accuracy – as well as earlier, more targeted claims intervention – through Gradient AI’s Total Incurred Prediction (TIP) model.

With claims environments exceedingly complex, MEMIC’s team felt that its conventional reserving approaches, while effective, had room to become more precise – especially at the individual case level. By expanding its established relationship with Gradient AI, MEMIC sought to hone the accuracy and timeliness of reserving decisions. It also hoped to bring its claims and underwriting performance into closer alignment.

Gradient AI’s Total Incurred Prediction model leverages advanced analytics to predict the total cost of claims earlier in their lifecycle, offer data-driven guidance for adjusters, and enable more consistent and accurate reserving decisions, among other benefits. For MEMIC, implementing the TIP model involved a measured, cross-functional approach – including underwriting, claims, and actuarial leadership – to best ensure proper evaluation of the solution’s value propositions. Throughout the effort, both companies maintained a commitment to developing operationalizing solutions that consistently align with MEMIC’s needs and strategic goals.

“Our shared goal was to incorporate our Total Incurred Prediction solution not as a mere ‘model delivery,’ but something that binds and underpins various aspects of MEMIC’s workers’ comp claims assessment strategies,” said Stan Smith, CEO of Gradient AI. “This thoughtful, collaborative approaches has helped MEMIC steadily build value via the TIP model even while it maintains its day-to-day focus on execution. This type of organic, perpetual improvement-minded launch approach helps ease the transition through both continuity and continued progress.”

One area of particular focus was gauging potential under- or over-served claims as they relate to the National Council on Compensation Insurance (NCCI) Experience Modifications. Also known as X Mods, the calculations are a key aspect of determining pricing strategies for workers’ comp coverage.

“We went live with this enhanced process in May 2025,” said Matt Harmon, Senior Vice President of Claims for the MEMIC Group. “A six‑month post‑implementation study demonstrated that reserve adjustments driven by TIP insights resulted in more timely updates to X Mods and improved accuracy in experience‑based policy pricing at renewal.”

Beyond the initial objective, MEMIC Group identified several additional use cases for the TIP model across multiple functional areas. These include evaluating open claims at the individual policy level when an account leaves MEMIC, toward the goal of estimating future claim costs and profitability; analyzing claims within a policy to identify potential future development and inform renewal pricing strategies; and assessing claims associated with catastrophic loss events to provide earlier estimates of ultimate loss severity. The tools also review open claims across multiple policies when evaluating potential commutations or settlements with reinsurers for a specific accident year.

From an underwriting standpoint, MEMIC also has benefitted from earlier evidence of favorable trends in X Mods, and stronger alignment between claims outcomes and underwriting results. In its totality, the Gradient AI’s TIP model meaningfully contributed to MEMIC’s revenue growth in the first quarter of this year.

For MEMIC, the TIP model also is paying dividends at the organizational and change management levels. By embedding predictive analytics into daily decision-making, the solution supports a more proactive, data-driven culture that helps distinguish MEMIC from many competitors.

“Improved reserve accuracy has given MEMIC underwriters greater confidence in renewal pricing decisions,” said Harmon. “In many cases, this has supported more appropriate premium levels that more accurately reflect underlying risk. These changes have had a favorable impact on both revenue and overall profitability, while supporting fair and transparent pricing for customers.”