Archive

Sep
17
2013

MVP: Most Valuable Project

Marty Ellingsworth – Great news: You got some of that big data stuff, so now you’re a most valuable player in the majors, right? Not exactly and not yet. The issue is what you do with voluminous data. Owning a modern Louisville Slugger is no guarantee of making it to first base. It’s how you […]

Aug
29
2013

Does Politics Influence Regulatory Forbearance?

Martin Grace – Voters and politicians hope that elections matter, but it isn’t always clear how much they matter and what the real effects elections have on voters and the economy. Researchers looking at developing economies look at how elections relate to the number or timing of bank insolvencies. They hypothesized that troubled banks were […]

Aug
13
2013

Disappearing … and Reappearing Risk: Part 1 – An Overview

But, on the other hand, if risk truly is in secular decline—i.e., if the raison d’etre of the insurance industry really is disappearing—then the long term growth prospects of the industry come into question. It was this latter issue that Steve focused on in the latter part of his piece by indentifying some possible growth areas in property catastrophe and mega-liability risks.

Jul
24
2013

Predictive Analytics: Chase Results, Not Unicorns

The secret to effective analytics is to apply it as a process, not a project. That essential strategic nuance gives hope to industry laggards while making the leaders look over their shoulders. Simply put, anyone can adopt a well-understood process, assuming executive commitment, strong communication, and diligent change management. However, if you believe analytics is a project that can make everything better, you’ll wind up chasing unicorns.

Jul
15
2013

A “New Normal” for the Nonadmitted Market?

Despite some ups and downs, the first decade of the new millennium was a good one for business volume in the nonadmitted market. Nonadmitted business (defined as any business written by an unlicensed company, excluding RRGs) soared from $11 billion in 2000 to $24 billion in 2011. Viewed differently, from 2000 to 2011, nonadmitted premium volume grew at a healthy 7% annual rate.

Jun
25
2013

From Fire Insurance to Home Owner’s and Commerical Property Insurance

Despite the many gaps and restrictions on coverage we see in insurance contracts today that we have to endorse around, it’s worth bearing in mind that most major policies forms with multiple perils and coverage grants were originally separate policies, often issued by separate insurance companies.

Look at the modern homeowner’s insurance policy and the commercial property policy. We still sometimes refer to them as “fire policies,” because that is originally all they covered, the peril of fire, nothing else.

Jun
19
2013

Disappearing Risk

2012 saw the ninth year of softening property casualty pricing measured by net written premium as a proportion of US GDP. In 2010 the proportion moved below 3% for the first time since 1974, and it stayed below 3% in 2011 and 2012. In 2003, the peak of the last hard market, property casualty insurance premium represented 3.6% of the total economy; by 2012 the proportion had decreased to 2.9%, a reduction of 0.7 percentage points of the entire economy – a massive movement for the industry.

Jun
12
2013

Predicting Bionic Growth

Back in the early ‘70s, the fictional application of a technology called bionics created a pop culture icon in the form of The Six Million Dollar Man. The main character in this TV program went from near death to “better than he was before. Better. Stronger. Faster.” The technology that made him remarkable extended his sight, increased his reach, and provided more lift than any other human being ever. But here’s the point: If each of three people had only one bionic advantage, the story would have been far less effective than one character possessing all three capabilities simultaneously. Like The Six Million Dollar Man, some carriers today have implemented many operational and technology improvements over the years and now have iconic brands built around vigorous performance in growth and profitability.

Apr
30
2013

Why Moneyball Matters

William H. Panning – This terrific story also has crucial implications for business executives, especially in insurance Billy Beane, general manager of the Oakland A’s, had a problem: recruiting a pennant-winning team despite having one of the smallest payrolls in the major leagues. How he solved that problem is expertly told in the movie Moneyball […]

Apr
30
2013

Are We There Yet? A Review of Liability Reserving

George Zanjani – If you’re in the habit of spending time around insurance brokers, you probably found them a bit cheerier in 2012. “Things are picking up!” was a common refrain I heard throughout the year. Many report higher volumes and firmer prices. Some are even going so far as to call a turn in […]

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