Verisk, APCIA study finds $27B loss, biggest since 2011

Better ownership of data in a variety of ways can significantly reduce underwriting losses from a bad 2022 for U.S. property carriers and accidents, said the head of underwriting solutions at the data analytics company. Verisk.

Carriers had a net underwriting loss of $26.9 billion in 2022, more than six times the underwriting loss of $3.8 billion in 2021, according to data compiled by Verisk and the American Accident Insurance Association. year. The underwriting loss last year was the largest since 2011.

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Neil Spector, President of Underwriting Solutions at Verisk.

In auto insurance, incorrect data can be a problem, according to Neil Spector, president of underwriting solutions at Verisk. The main reasons for incorrect vehicle data include undisclosed drivers such as new drivers in the family who should have been added to the policy, misreported mileage because policyholders are now driving more as they are going to work in person again, and incorrect addresses on the vehicle. registration.

“Insurers can look at their policies and say which ones are most likely wrong, and then we can highlight those so they can contact their customers and make sure they have the most accurate information,” Spector said. . “When they do that, it multiplies the premium because they get the right risks, and the pricing can help with the profitability of the cars.”

For property insurance, the problem may be the lack of information about “insurance value” (ITV), that is, how much insurance the insured needs to cover the damage from the event that will be claimed. This can be found using data and analytics services, Spector says. An analysis of the carrier’s business book can provide updated ITVs.

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Spector pointed to several other insurtech features that can use the data to improve underwriting and loss prevention, such as telematics, aerial photographsAnd claims automation. In fact, aerial photographs can be related to claim automation.

“You can tell many of the exterior characteristics of a house from the sky,” he said. “This can be especially helpful when there’s a hurricane because if you have an image of the area before the hurricane, it can give insurers a way to get a claims review without even being on site for a home appraisal.”

Aerial photographs may also have an impact prior to claiming damages. “A lot of people don’t know what kind of roof they have or how many square feet they have at home,” Spector said. “They get these questions from an agent or an insurance company and they don’t even know where to start. Much of this data can be obtained from aerial photographs.”

Spector observes that the near-universality of carrier applications that can be used for claiming also facilitates automation and is activated when data and analytics are put into digital insurance products and their applications.

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