Spring 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

Invent, Reinvent, Repeat

By Frank J. Coyne

The ongoing challenge — and opportunity — for the insurance business is the never-ending drive for improvement: Underwriting has become more intelligent; pricing is more refined; claim settlement, faster and fairer. Verisk's CEO shows how technology, data, and analytics lie at the root of mastering the demands of continual change.

Analytics and Risk Management for Supply Chain Efficiency

By Scott G. Stephenson

While neither snow nor rain nor heat nor gloom of night stays postal couriers from the swift completion of their appointed rounds, catastrophe can impede even the most reliable supply chain. The results? Everything from lost sales and profit to global economic repercussions. Verisk's president and chief operating officer explains how business intelligence is simply the intelligent way to do business.

Verisk CIO Perry Rotella Blogs for Forbes CIO Network

IT has migrated from the back room to the board room, and its mandate is to improve business performance and shareholder value. Verisk's CIO shares the three steps to empower IT to become worthy of its place in the C-suite.

Questions Executives Should Ask Model Providers

By Ming Lee

Carriers should not allow the quantitative and scientific aspects of model evaluation to deter them from purchasing the best applications to fit their requirements. Instead, insurers need to become educated customers. Toward that end, these seven questions provide a solid foundation.

GHS and Its Impact on Supply Chain Risk Management and Compliance

By Robert S. Christie

The Globally Harmonized System of Classification and Labeling of Chemicals, or GHS, is a recognized method to classify hazards. But transitioning to it can turn into a less-than-harmonious experience if not done properly. Here are the tools and tactics to save time and effort while implementing GHS conformance.

The Mobile Revolution: Will the Property/Casualty Insurance Industry Seize the Opportunity?

By John Cantwell and Edward Cammarato

Mobile devices and social media are likely to trigger a revolution in the way insurance gets done. For example, with smartphones enabling a homeowner to inventory and inspect valuables, might an adjuster settle a claim more effectively? With GPS tracking driver behavior, could a policy one day be about the driver and not about the car? The answers to those and other thought-provoking questions present a look ahead to what may become the new business as usual.

Analytic Capabilities: Your Customer and You

By Marty Ellingsworth

When taking stock of customers, insurers realize that the more they learn, the more there is to learn —certainly as a means of raising revenues, selling more efficiently, and achieving competitive advantage. Find out where your company falls in the spectrum of predictive analytics capabilities, and pick up some tips on aligning the investment with business goals and enabling strategy to meet action.

Assessing Supply Chain Risk

By David Shillingford

Because the supply chain is collaborative, the risk assessment process must be as well. For risk assessment to help prevent supply interruption, the evaluation needs to account for the varied risk issues of all intermediate touch points along the way.

Better Analysis and Frequent Updates Stem Auto Insurance Losses

By Raj Bhat

On average, after initial auto policy screening, 82 percent of audits reveal policies without enough premium to cover the intended risk. Here are three steps to identify errors in rating data and prevent premium leakage through advances in analytic and decision support methodologies.

The State of Claims Processing and Investigation

Roundtable Discussion

Recent improvements in claims processing are helping insurers analyze their data, according to Verisk experts. From discovering new facts to assist with claims mitigation and settlement to reducing investigative cycle time, carriers are working smarter, not harder. The only question then is, Where do we go from here?

The FCRA and Your Background Screening Program: What You Should Know

By Todd R. Carpenter

Knowing the dos and don'ts surrounding the Fair Credit Reporting Act can help an employer avoid criminal penalties and civil claims from job applicants for damages, cost of a lawsuit, and attorney fees. But first and foremost, doing compliance right can help employers hire the most qualified candidates available.

The Dynamic Landscape of U.S. Fire Protection

By Robert W. Cobb

With the economic downturn shrinking the budgets of fire protection services, fire service leaders have to figure out how to stay effective with fewer resources. The challenge is daunting — there were more than 1.3 million fires in 2010 alone. So having the means to measure and evaluate major elements of a community's fire suppression system can literally mean the difference between life and death.

Telematics-Based Insurance: Evolution, Not Revolution

By Christopher Sirota

While the prospects of usage-based auto insurance have received a fair share of ink, the anticipated revolution has not occurred. In the ideal world, everyone's cost decreases — a win-win. But in the real world, change has been more evolutionary than revolutionary. Here's why.

Appraisal Management Company Quality Control: Getting It Right

By George Opelka

The mortgage-lending industry has been undergoing increased scrutiny. Not surprisingly, doing business has become more complex as a result. New rules have changed quality control, and new formats are required for appraisal reports. However, implementing appropriate methods and tools can help ensure that compliance goes right and can lessen the instances of when things go wrong.

Handling Simple Structural Contents Claims: Five Key Elements to Help Desk Adjusters Succeed

By Jeffrey C. Taylor

Desk adjusters can save insurers significant expense and customers a lot of time. But with varying adjuster backgrounds and varying policyholder ability to describe the scope of damage, claims settlement by phone is often less than consistent. Applying certain principles — from using visual references to taking advantage of uniform pricing data — can help adjusters better handle small claims, making customers and carriers happy.

Insuring the Flying Car

By Jim Weiss

An aviation company has developed an aircraft with on-road capability. Although the aircraft is not commercially available yet, automobile insurers are vying to keep pace with a flurry of other recent innovations, including lane departure and blind-spot warning systems, driver alertness monitoring, collision preparation systems, and self-parking. Vehicle rating programs that don't adequately consider the effects of such technologies may go the way of the Ford Edsel.

The Effects of Space Weather on the Insurance Industry

A Conversation with Kyle Beatty

Space weather events can wreak havoc on the electric power supply and trigger losses from business interruption and damaged physical assets. In turn, such events have financial consequences for insurers. That said, insurers need to manage and evaluate their exposure and implement a mitigation strategy, especially for long-term outages.

Current Medicare Reform Efforts: How the SMART Act Would Change MSP Compliance

By Mark Popolizio

Smart insurers will keep an eye on the progress of the Strengthening Medicare and Repaying Taxpayers (SMART) Act, currently pending in Congress. If enacted, it would not only make significant substantive and procedural amendments to the Medicare Secondary Payer statute and current Centers for Medicare and Medicaid Services procedures, but it would affect primary payers as well.