Fall 2012

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Verisk Review is a journal of ideas and opinions from Verisk Analytics. The publication provides expert commentary on the science of risk, including risk management, predictive analytics, property/casualty insurance, catastrophe management, fraud prevention, and a wide range of other topics.

Contents

Take the High Road

By Frank J. Coyne

If a carrier doesn't know where it's going, any road will do. But in today's business environment, leading companies decide where they're heading and the best route to get there. How? Aligning critical data resources with sophisticated modeling tools enables innovative organizations to find the path to success.

The Challenge of Property Inspection Optimization

By Neil Spector

Insurers spend an estimated $100 million annually on homeowner inspection programs — and often don't get the results they're paying for. One way to spend smarter involves better data and models that continually learn to be more predictive and precise, yielding both significant savings and better risk assessment.

Claims and Capital: Unlocking Shareholder Value

By Vincent Cialdella

Margins, return on equity, combined ratios, loss ratios, and so on — those may be the traditional methods to manage and enhance shareholder value. But today, insurers have one more powerful tool: the ability to streamline the claims management process and conduct more efficient fraud investigations.

ICD-10: Friend or Foe?

By Deb Bradley, David Paquette, Brian Boyce, and Dr. Rich Wheeler

Implementation of an updated International Classification of Diseases (ICD) coding structure in the healthcare arena is set for 2014. The new structure will bring both advantages and challenges. While more logically organized than the previous version — and with greater specificity — ICD-10 and its benefits come with a price tag.

Next-Generation Claims Handling: How Will the Property/Casualty Industry Respond to the Increasing Frequency and Severity of Weather-Related Events?

By Joy Rohde

Weather patterns are changing, and damaging storms appear to be more frequent than before. What's a carrier to do? A better understanding of all sorts of perils — from earthquakes to hurricanes to flooding — will help you predict loss on the front end and effectively manage claims after catastrophe strikes.

Fostering Proactive Decision Making with Catastrophe Risk Analysis

By Dr. Akshay Gupta

With any decision, you can do the right thing, the wrong thing, or nothing — which also can be right or wrong. Why rely on instinct alone, especially in contemplating the potential perils of catastrophe, when risk analysis can enable informed and proactive decision making? Explore the benefits and best practices of sound risk management.

The Superman Paradox: Truth, Justice, and the Data-Driven Way

Dr. Anu Karna

As Clark Kent is to Superman, so the average man is to the super man. Likewise, the average insurer can transform from a company that just meets requirements to one that far exceeds them. Here's how to become a super carrier.

The Role of Analytics and Big Data in Insurance

An Industry Roundtable with G. Edward Combs, Chris Early, Dr. Paul Y. Mang, and Mo Masud

Four industry experts assess the biggest challenges insurers face now, which carriers are set for breakout performance, and the roles data and analytics play in the insurance industry. See whether you agree with these candid comments on the state of analytics in the insurance business today and in the future.

Developing a Medicare Game Plan: Meeting the MSP Challenge

By Dorothy Kelly and Mark Popolizio

In the world of Medicare Secondary Payer obligations, business as usual no longer applies. Whether dealing with electronic reporting mandates, conditional payment reimbursements, or the Medicare Set Aside, insurers must adopt the proper tools and strategies to meet new and ongoing challenges. The time is now to erect the necessary compliance protocols to avoid possible — and hefty — liability and penalties.

Big Data: What's on the Menu?

By Peter Marotta

Insurance companies today feast on data. The ingredients that go into an insurer's data — along with the equipment that prepares it — are more plentiful than ever. But what truly determines whether the data dining experience is fine cuisine or fast food is how much added value comes from the way a carrier stirs the data pot.

Brave New World Strategies for Enhancing EH&S Regulatory Compliance

By Christina Widodo

Hazardous materials pose a variety of risks — from supply chain to reputation to customer safety. With varying regional, federal, and international regulatory bodies and safety rules and with the advent of new initiatives, compliance is dauntingly complex. This view of the compliance landscape provides a good start on understanding the problem and a foundation for next steps.

The Effects of Wind Peril on Commercial Buildings

A Conversation with Kevin Kuntz

Damage due to wind has been escalating rapidly as a percentage of overall property losses. To cope, insurers need more detail for evaluating wind risk. According to Kevin Kuntz of Verisk Insurance Solutions – Commercial Property, combining building-specific data with information about the wind at a particular location helps insurers manage their books of business across geographic regions, evaluate aggregations, enhance model results, and price insurance coverage accurately.

One Click Away from Danger: Cyber Risk and Insurance

By Shawn Dougherty

The greater a business's reliance on the Internet, the riskier is its potential exposure. And today, what company doesn't have a presence on the web? While the need for insurance coverage is clear, sorting out all the threats may not be. Here's what you need to know.

Staying ahead of the Pricing Roller Coaster

By John Buchanan and Joe Izzo

Just as a roller coaster produces thrills and chills, so can measuring where an insurer finds itself in the ongoing underwriting cycle. Companies have invested heavily to create robust internal price monitoring systems, but insurers also need a direct comparison with the industry aggregate to achieve an accurate rear view and a glimpse ahead, assessing both the dips and climbs. Acquiring credible market information can be problematic, but savvy companies know how to strap themselves in to experience a smooth ride and avoid painful bumps along the way.