Predictive modeling is an excellent and reliable “tool” that should continue to be used to assist insurers in making and charging appropriate rates. These days, a much bigger and growing issue is availability, or lack thereof. Insurers can provide affordable coverage for virtually ANY exposure, if allowed to enforce risk management techniques and to charge risk-based rates. Politically, this has proven to be difficult if not impossible! The result had been a complete withdrawal from certain areas (coastlines and waterways) and from specific exposures (hurricane winds, Earthquake, etc..). Is it any wonder that their bottom lines have improved? The solution is to allow insurers to charge appropriate rates, with competition to keep them as low as possible; and then having Federal governments to provide Disaster Relief above and beyond an insurable threshold limit. The Federal government is truly charged with only a handful of primary responsibilities, and Disaster/Catastrophe
relief fits in this category. If they would leave States Rights to the States, and risk management to the private insurers; their plate would still be full – but at least, it would be “their” plate.
Not a comment but a question. On the average, how many points did predictive modeling improve the respondents’ loss ratios?
Predictive modeling is an excellent and reliable “tool” that should continue to be used to assist insurers in making and charging appropriate rates. These days, a much bigger and growing issue is availability, or lack thereof. Insurers can provide affordable coverage for virtually ANY exposure, if allowed to enforce risk management techniques and to charge risk-based rates. Politically, this has proven to be difficult if not impossible! The result had been a complete withdrawal from certain areas (coastlines and waterways) and from specific exposures (hurricane winds, Earthquake, etc..). Is it any wonder that their bottom lines have improved? The solution is to allow insurers to charge appropriate rates, with competition to keep them as low as possible; and then having Federal governments to provide Disaster Relief above and beyond an insurable threshold limit. The Federal government is truly charged with only a handful of primary responsibilities, and Disaster/Catastrophe
relief fits in this category. If they would leave States Rights to the States, and risk management to the private insurers; their plate would still be full – but at least, it would be “their” plate.
Good day
We really appreciate all sorts of new models derived, but as for us in Africa most of them are not applicable to our poor economies.