By Scott G. Stephenson
It was a season to remember—with an outcome of loss and destruction that many would rather forget. The season for hurricanes in the United States in 2017 was the first in more than a century in which ten sequential Atlantic storms reached hurricane strength. The now-familiar names Harvey, Irma, Jose, and Maria will be remembered by millions of Americans as life-altering natural catastrophes.
By Guy Seeley
Climate change remains one of the world’s most complex problems, crossing borders and blurring lines of science and politics. Given the strong demand for global energy, what are the chances of understanding and finding solutions to an ever-increasing CO2 concentration in Earth’s atmosphere? AER, a Verisk Analytics business, has been addressing global environmental challenges for decades through highly relevant scientific research.
By Hernan L. Medina, CSPA, CPCU
Your predictive analytics team has just built a predictive model. Now all you need to do is approve implementation, right? Not really. Although it’s reasonable to expect that the model will lead to better business performance, before implementing the model, you should review the evidence. Data scientists have many ways to evaluate and compare models. To help you make better informed decisions, here are some concepts underlying two of these best practices.
By Jim Weiss and Su Wash
How best to make use of big data remains a mystery for many property/casualty insurers. Four out of five insurers reportedly use big data, with the most extensive uses far and away being in predictive exercises such as pricing, underwriting, and risk selection. Even so, research firm Gartner reports that 60 percent of big data projects are abandoned, suggesting that organizations may not always be looking in the right places to derive value.
By Benjamin Shattuck
Despite its superstardom in the upstream industry, tight oil remains the subject of debate: Can it realize its potential as a profit engine, or will overinvestment drive supply up and prices down? Tight oil profitability has been the focus of much debate since the oil price collapse of 2014. Its ability to scale down (and up) quickly and break-even at low price points has made the Permian Basin the star of the show for investors. But there are still plenty of skeptics.
By Matt Moshiri and Donna Westerman
“Garbage in, garbage out” is a phrase often used in computer modeling to express the idea that poor-quality input typically leads to poor-quality output. Responsible sourcing teams should view the data that they use to evaluate risk in exactly the same way. Measuring and understanding risk are paramount for responsible sourcing managers, which is why many have willingly jumped on the data bandwagon.
By AIR Worldwide Staff
Twenty-five years ago, on August 24, 1992, Hurricane Andrew made its first U.S. landfall, 17 years after the previous landfall of a major hurricane in the state of Florida. Andrew was only the third Category 5 hurricane to make landfall in the United States since 1900. This storm caused an estimated USD 15.5 billion (1992 dollars) in total insured losses—USD 15.0 billion in Florida—and resulted in the insolvency of 11 insurance companies.
By Prashant Pai, Eric Schneider, and Scott Stransky
Scott Stephenson Podcasts
Plugging the Leak
Verisk Chairman, President, and CEO Scott Stephenson spoke to A.M. Best about how data can help insurers stem the flow of auto premium leakage.Listen Now
Verisk Chairman, President, and CEO Scott Stephenson spoke to A.M. Best about the need to make communities more resilient in the aftermath of the recent hurricanes in Texas and Florida.Listen Now
Global Firms Try to Stay on Top of Evolving Cyber Risk
While several factors affect a firm's cyber risk, people remain the critical vulnerability, says Scott Stransky, assistant vice president and principal scientist with AIR Worldwide. He explains the evolving risk and what firms can do to mitigate cyber risk in this audio interview with Denise Johnson.
2017 Catastrophe Loss Expectations
A steady trend upward since 2012 suggests catastrophe losses will continue to rise in frequency and severity, according to Ted Gregory, director of PCS Operations. Gregory discussed catastrophe loss expectations for 2017 and what insurers can do to mitigate cat losses.
The Evolution of Earthquake Modeling
Though earthquake modeling has been around for a while, Andrew O’Donnell, senior engineer with AIR Worldwide, says updates and refinements have helped in better assessing risk. He explained why earthquake models are valuable to insurers and how new updated earthquake models will view both man-made and induced quake risk.
Why Building Codes Benefit Insurers
According to Christopher Miller, technical director for ISO’s Building Code Effectiveness Grading Schedule (BCEGS®), when building codes are adopted and enforced, there is a substantial reduction in loss. He discusses the states that have improved because of changes to their building codes and why it’s not just about adoption and enforcement. The way building codes are modified is important as well.
Insurers Work through Challenges to Offer IoT Experience
Insurers have several concerns when it comes to selecting an Internet of Things provider, according to Dawn Mortimer, AVP IoT/telematics claims product management for Verisk. Insurers also need to consider the challenges associated with offering an IoT experience, such as the platform used, the adoption and customer engagement strategy, and determining what data to leverage.
Professional Liability Claims Trends
Professional liability claims and coverage are evolving, according to Steve Whelan, director of management/professional liability product development for ISO. With increasing cyber attacks come coverage for ransomware and even blended coverage with other lines. Among other trends, healthcare claims are expected to grow in conjunction with an aging population.
Auto Insurers Should Be Planning for Autonomous Car Changes
Changes in ownership, coverages, and the way claims are evaluated are just a few of the ways self-driving cars will affect the auto insurance industry, says Jared Smollik, actuarial director of personal auto product development for Verisk. Though there is expected to be a transition period, Smollik says auto insurers need to begin planning for autonomous vehicles sooner rather than later.