What is the Probability of Insolvency?

The Probability of Insolvency indicates the likelihood of a company becoming insolvent within the next 12 months.

What is the Probability of Business Closure?

Not every company that stops trading becomes insolvent. The Probability of Business Closure predicts how likely a company is to close within the next 12 months.

How accurate are the predictions?

Tests conducted with banks, alternative lenders and insurers have demonstrated that the Open Risk Exchange credit risk model is more accurate than some of the leading credit bureau commercial scorecards.

Please see below for a comparison of the accuracy of our insolvency prediction with the commercial credit score of a leading credit bureau in the UK:

Open Risk Exchange 45.6%
Leading Credit Bureau 23.0%

The results show that Open Risk Exchange predictions are considerably more accurate than the credit bureau scorecard.

What is Gini?

Though calculating a Gini Coefficient is complex, understanding it is fairly simple. A Gini Coefficient is merely a scale of predictive power from 0 to 1. A higher Gini means more predictive power, a lower Gini means less predictive power.

A Gini of 0 is the statistical equivalent of a coin toss – those who score high are no more likely to repay than those who score low.

A Gini of 1 is perfectly predictive – the score is able to identify who will repay and who will default every time.

I have another question!

Please contact us at team@openriskexchange.com.