Auto Insurance Report Conference Recap

By Chip Chaffee May 11, 2011

I attended the 2011 Auto Insurance Report Conference (AIR), April 10 to 12 at the beautiful Ritz Carlton, Amelia Island. The conference gathered 300 executives from insurance companies and vendors representing a large portion of the auto insurance market. The meeting began with a sponsor reception that allowed attendees to register and interact with sponsors. The reception had a unique vibe, as it coincided with the final round of the Masters. Attendees gathered around the TV, while discussing whether Tiger would make a great comeback or ultimately fall short.   

The sessions began the next day with Brian Sullivan, conference organizer, discussing why the auto insurance market is shrinking. He made a counterintuitive point about how the decrease in claims is actually bad for the market. He reasoned that because the number of claims is dropping, carriers can't increase premiums. To grow, carriers will ultimately have to continue to compete for market share. Sullivan cast this against the homeowners, market which has experienced a large upswing in claims — and premium growth.

Following Brian’s introductory session, we shifted focus to the big topic of the first day — the Florida insurance market. Two presentations highlighted the current problem of PIP fraud and the legislative reaction to the situation. Jeff Atwater, Chief Financial Officer for the state of Florida, discussed how they are actively trying to rein in fraud (more than 250 arrests in 6 months!) and hoping to make the state appealing again to auto insurers. Since the session, there are been some recent activity in the legislature. Other sessions of the day discussed rental coverage, agents, price elasticity, older drivers, cross training, and claims management. The day concluded with another reception overlooking the Atlantic.

The second day kicked off with a great presentation on the future of car safety. Representatives from Volvo and Mercedes were on hand to discuss recent and future enhancements to help reduce and ultimately prevent accidents. The presentation really showed some cutting-edge technology that may help Volvo and Mercedes achieve their goal of accident-free cars by 2020. ISO Innovative Analytics Chief Actuary David Cummings did a session on the regulatory challenges of getting underwriting innovations approved. Dave’s presentation discussed how ISO handled the process during development of ISO Risk Analyzer. The meeting concluded with Brian doing his traditional twenty trends in twenty minutes. This session is a fixture at the AIR conference, and Brian always provides insightful and thought-provoking ideas. He observed the time has come for data prefill; telematics is tentatively appearing; and the federal czar could be very helpful to the insurance industry. This was another terrific year for the conference. Verisk Insurance Solutions is a proud sponsor, and we continue to see great value in the show. We hope to see you there next year