Insurance Industry Analytics & Underwriting Strategies

This Week in Analytics: News

Embedding Daily Underwriting Strategies, Insurance Industry Analytics, Insurance Underwriting Strategy and Execution, Price of Pricing Optimization, Pricing Stabilization, Millennial Mindset, U.S. Property/Casualty Net Income Growth

PC360: Embedding Underwriting Strategies in Day-to-Day Decisions

“According to PricewaterhouseCoopers’ (PwC) Global CEO Survey, 86% of insurance CEOs believe technological advances will transform their businesses in the next three to five years. For commercial lines organizations, the underwriting organization is one of the prime areas under consideration for combining technology solutions and data to increase efficiency and improve decision-making. Leading carriers are finding ways to take advantage of technological advances to deliver the right information at the right time in the process to provide targeted guidance in the context of individual accounts.

Technology solutions, such as integrating third-party data in application information or utilizing underwriting rules and account characteristics to guide process flows, can simplify fundamental tasks and accelerate an underwriter’s analysis. Providing targeted data, analytics, and qualitative information in the context of a given producer, client, policy, or submission allows an underwriter to understand and apply the whole company’s experience to underwrite an account, limiting underwriter bias and improving each decision. Steve Wittmuss, commercial vice president at Farm Bureau Financial Services, explains, “Maybe an underwriter got hurt on one specific loss and decided never to underwrite that again. But when you look at the whole universe of losses, it could be good risk. When you start using analytics, you get to use all that data out there.’ See, ‘Thinking Inside the (Black) Box.'” Read the full article now…

 

Insurance Journal: Analytics: The Industry Game Changer

“Analytics and big data are taking the business world by storm. These red-hot technology trends are changing how people think about information and processes and creating monumental shifts in business practices nationwide. Already, recent analytical advancements have changed the way people shop for goods, play sports and track data. Within the insurance industry, analytics and big data present an opportunity for organizations to enhance their profitability and gain a competitive edge in today’s increasingly competitive marketplace.

With more and more insurers embracing the power and impact of analytics, 2015 has been dubbed the year of technology-driven transformation industry-wide. Progressive organizations are now incorporating the groundbreaking applications of technology and analytics into their business plans and practices. In fact, insurers are currently adding analytics positions at a rate more than five times faster than overall national employment growth.” Read the full article now…

 

PC360: Underwriting from Strategy to Execution

“To achieve desired profitable growth, commercial insurance carriers strive to develop best-in-class underwriters who demonstrate a broad range of skill sets, including the ability to take on sales, marketing and analytical responsibilities. Highly successful carriers embrace a ‘best athlete’ model and continue to expand the role of their underwriters. They prefer underwriters with an entrepreneurial mindset, place them at the center of transactions and reward them appropriately.

However, while some underwriters may have the entrepreneurial prowess to develop a large network of loyal producers and identify innovative endorsements, the majority must focus on improving their fundamental underwriting skills to select and price risk in alignment with their carrier’s underwriting strategy. This is even more critical for geographically distributed carriers (i.e., broad distribution footprint and decentralized underwriting units) that must ensure high quality and consistent underwriting practices among a very diverse community of underwriters (some of whom may come from competitors and be tempted to underwrite according to their previous employer’s strategy and underwriting guidelines).

What typically constitutes fundamental underwriting performance for an individual commercial underwriter?” Read the full article now…

 

Insurance Journal: The Price of Price Optimization

“The use of price optimization in insurance pricing is drawing increased attention and could be the next big industry battle. Or it could not be.

Consumer groups and a growing contingent of states are labeling the practice as unfairly discriminatory and restricting it. Insurers say there is confusion over exactly what price optimization is and claim that these same watchdogs have for years approved elements of what some are now calling price optimization.

Meanwhile, agents are acting like they hope the whole controversy will just fade away and they may get their wish.” Read the full article now…

 

 

IBA: Is Pricing Stabilisation on the Way?

“After 10 straight quarters of pricing drops, a leading pricing index has shown that pricing decreases are slowing but is an end of pricing drops on the horizon?

The Bizcover Insurance SME Index has found that lower premium rates continue to affect the market thanks to an “abundance of supply and healthy competition” within the market as professional indemnity prices took a 4% hit over the previous quarter.

However, the Index highlighted that pricing across other product groups showed signs of slowing in terms of pricing reductions as stabilisation could be on the horizon, Bizcover and Mega Capital managing director, Michael Gottlieb said.” Read the full article now…

 

PC360: Millennial Mindset [Infographic]

“Four out of five millennials are “optimistic” or “very optimistic” that the insurance industry will evolve to attract the next generation of insurance talent, due to productivity and efficiency gains from technology adoption, according to Vertafore’s second annual ‘Millennial Revolution‘ study.

According to U.S. Census data, millennials outnumber baby boomers and are expected to make up half of the global workforce by 2020. However, insurance needs to find a way to make the industry attractive and leverage this talent.

Year-over-year comparisons show that work/life balance is the No. 1 reason why millennials stay in this industry, according to Vertafore. Nine out of 10 millennials also identify their company’s use of technology, particularly mobile and social media, as key elements contributing toward job satisfaction.” Read the full article now…

 

Carrier Management: U.S. Property/Casualty Net Income Grew Steadily in 2015 First Half

“Thanks to a relatively quiet tornado season and slow start to the U.S. hurricane season, there’s good news to report concerning property/casualty insurers’ net income during the first half of 2015.

With those conditions in play, net income for private U.S. property/casualty insurers grew to $31 billion for the first half of 2015, up from $26 billion in the first six months of 2014, according to ISO and the Property Casualty Insurers Association of America.

ISO (A Verisk Analytics business) and PCI said that insurers’ overall profitability as measured by their rate of return on shareholders’ surplus also soared, growing to 9.2 percent from 7.8 percent over the same period last year.” Read the full article now…

 

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