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Disappearing … and Reappearing Risk: Part 2 – Expansion of Covered Perils
George Zanjani – In a recent post, I started exploring Steve Mildenhall’s observation that the property-casualty industry is grappling with a problem of “disappearing risk.” More precisely, he observed...
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The Lingering Effects of a Financial Crisis
George Zanjani – Green shoots. When I’ve talked to brokers and agents in recent years, I’ve often heard about “green shoots.” That’s gone on for several years now. When I dig deeper, I usually get...
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Shifting Benchmarks: How Falling Interest Rates Complicate Performance...
George Zanjani – Falling interest rates are rendering traditional rule-of-thumb obsolete when evaluating profitability in liability insurance. Performance benchmarks such as the loss ratio need to be...
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The Rising Importance of Property Catastrophe Risk in the “New Normal” of the...
George Zanjani – Last summer, I wrote a piece speculating on whether the nonadmitted market had reached a “new normal.” Nonadmitted market had been hovering close to 5% for a few years, even though 1)...
View ArticleThe Case of the Hidden Hazards
William H. Panning – Here’s how two analysts uncovered conceptual risks – flaws in a firm’s assumptions and inferences about risk – that elude detection but may be as consequential as potential losses...
View ArticleRevolutionary Times in Auto Insurance Pricing
Marty Ellingsworth – For years, auto insurers have used crude miles driven classification schemes in their premium calculations. The logic of crude schemes presumably lay in the difficulties of...
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US Reserve Adequacy: Diminishing Returns
Stephen Mildenhall – With reduced equity in reserves, mistakes in underwriting, rate monitoring, and primary pricing will no longer be covered up by a reserve cushion Reserve releases in the US are now...
View ArticlePredictive Analytics and Surplus Lines: Freedom of Rate but Not Free of...
Harold Weston – Similar risks should be priced similarly, and relevant distinctions based on actuarially relevant factors should be captured in the rate. Predictive analytics in insurance will allow...
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Beyond the New Normal: Could the Surplus Lines Market Be Heading for a 10%...
George Zanjani – A few years ago, I posed the question of whether the nonadmitted market had reached a “new normal” in terms of market share, or whether it was destined to retreat to its historic...
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Assessing the State of the Casualty Insurance Market
George Zanjani – While property losses from natural disasters such as Hurricane Matthew may grab headlines in the insurance press, casualty losses often drive the more significant cyclical disruptions...
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