Spring 2011

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We are pleased to offer the inaugural edition of Verisk Review — a thought-leadership publication from Verisk Analytics and its Verisk Insurance Solutions group.

The mission of Verisk Review (formerly ISO Review) is to provide 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.

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Contents

Greener Pastures - The Insurance Industry Can Capitalize on Alternative Energy

By Frank J. Coyne

As individuals and businesses pay more and more attention to alternative sources of energy, sustainable building practices, and efficient use of technology, the insurance industry will play a unique role. Insurers will be covering new risks and supporting efforts to control losses. Verisk's CEO explores the risks — and the potential rewards.

Making the World a Better Place

Scott G. Stephenson

Verisk's president and chief operating officer shares his thoughts about how the insurance industry is addressing some of today's major public challenges, including healthcare fraud, fire losses, catastrophe risks, and climate change.

Combating Weather-Related Claims Fraud

By John Deegan and Stephen Massa

Severe weather events produce lots of claims — and the potential for lots of claims fraud. Insurers are increasingly using meteorological data and advanced forensic technology to fight weather-related fraud.

Declining Residential Market Values Spur Customer Service Concerns for Insurers

By Scott Amussen

In the current housing market, the price of many homes has dropped. But construction costs have not always declined proportionately. As a result, the cost to rebuild a home after a loss may be more than the market value — and the cost to insure that home may remain high. How do you explain that to your customers?

Verisk Review Forum: The Current State of ERM

With Kenneth R.Rado and James Noble

Two experts share their views on risk management as a valued corporate activity and on how to position enterprise risk management as a broad-based discipline.

The Fight against Healthcare Fraud Is Everyone's Fight

By Barry Johnson

Healthcare fraud is one of the primary causes of constantly increasing health insurance rates. Dr. Barry Johnson, president of HealthCare Insight, outlines what employers and other healthcare payers can do to detect and prevent fraud.

Tackling the Real Wind Peril

By Stephen Clarke and Joseph Palmer

For commercial property insurers, the wind peril — hurricanes and tornadoes — represents an increasing percentage of total losses. The way we classify and rate commercial buildings focuses on susceptibility to fire. Do we need a new approach that also considers susceptibility to wind damage?

Catastrophe Loss Development Analysis

By Sanders Cathcart and Joseph Izzo

After a major catastrophe, insurers and reinsurers need good estimates of their ultimate total losses. But ISO data shows that catastrophe claim costs sometimes develop more slowly than noncatastrophe costs. New analytics can help insurers and reinsurers reduce the uncertainty by illustrating how the patterns vary.

Channeling the Flood of Predictive Data

By John Baldan and Jeff De Turris

Insurers want refined and customized predictive modeling to help them price their products. And refinements in the models require data — lots of data. Get ready for a flood of information.

The Way Forward in the Property/Casualty Business

By Michael Murray

The head of ISO's financial analysis unit looks at the state of the property/casualty insurance industry today — and what insurers need to do to prosper in the future.

Saving Community Fire Stations during a Time of Economic Change

By MikeWaters and Robert Cobb

In this time of budget shortfalls, many municipalities around the country are reducing their funding for fire protection. That can be dangerous. ISO has determined that more than 1,000 fire stations in the United States lack the basic response capabilities for fighting structure fires. What can a fire department do to cope with the challenges of the current economy?

The U.S. Mortgage Crisis: What the Models Missed

By Joseph Breeden

What is "macroeconomic adverse selection"? And what role did it play in creating the mortgage crisis and the Great Recession?