A.M.BestTV: Homeowners Insurers Tap Predictive Analytics
05 August 2015 - 1:30AM
Business Wire
In this second of five “First Monday” episodes, A.M. Best
Senior Financial Analyst Maurice Thomas discusses how U.S.
homeowners insurers are increasingly harnessing advanced predictive
models to smooth operating volatility in their line of business.
Click on http://www.ambest.com/v.asp?v=fmhomeowners815 to view the
video program.
The remaining “First Monday’ episodes will focus on how the
Middle East is ripe for mergers and acquisitions; how insurers have
increased their overall risks and reduced their liquidity in
investments; and how fluctuating oil prices are hampering Nigeria’s
insurance market. “First Monday” is A.M. Best’s monthly program
featuring commentary by the company's leading analysts.
Underwriting profitability in U.S. homeowners insurance is
volatile. Combined ratios ranged from a high of 158.4% in 1992 to a
low of 89.0% in 2006, compared with the private passenger
automobile line, which typically hovers in the mid-90s; however, in
the last two years, the homeowners insurance sector has been
profitable, posting a combined ratio of 90.4% in 2013 and 92.4% in
2014.
“This could be a game changer for homeowners’ profitability in
the long term,” said Thomas. “In the past, companies have relied on
their automobile line results to obtain their profitable goals;
however, now these companies are looking to gain more stability in
their homeowners line to achieve their overall profitable goals and
margins.”
In addressing the issue of pricing sophistication, Thomas said
that it continues to evolve and gain traction in the performance of
the homeowners line, and those carriers that do not utilize it are
going to find themselves at a competitive disadvantage.
Recent episodes of A.M.BestTV include:
- ‘First Monday’: Rated U.S. Captives
Show Some Stress in 2014: Assistant Vice President Steven
Chirico said that despite U.S. captive insurers continuing to
outperform the commercial insurance sector, industry results are
showing some decay:
http://www.ambest.com/v.asp?v=fmcaptives815.
- How Katrina Changed Today’s
Insurance Industry: Hurricane Katrina has brought to insurance
new understandings and ways of dealing with catastrophe risks and
complex losses 10 years after it devastated Louisiana:
http://www.ambest.com/v.asp?v=katrina715.
- Analytics Continue to Transform
Insurance Industry: How big data and analytics continue to play
an ever increasing and important role in the insurance industry.
Two just released industry reports from Novarica and Capgemini
explore how insurers are looking to harness data across all facets
of business: http://www.ambest.com/v.asp?v=bigdata715.
- Insurers Develop New Ways to Trigger
Disaster Coverage: Brokers and insurers are borrowing from the
catastrophe bonds world by developing coverage against natural
perils that are triggered by measurable parameters rather than
traditional claims reporting:
http://www.ambest.com/v.asp?v=parametric715.
A.M.BestTV covers exclusive A.M. Best information and reports,
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every Monday, Wednesday and Friday. Sign up for alerts of episodes
at http://www.ambest.com/multimedia/ambtvsignup.html. View
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information, visit www.ambest.com.
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A.M. BestLee McDonald, 908-439-2200, ext.
5561Group Vice President, Publication and News
Serviceslee.mcdonald@ambest.com