Monica Shokrai

A strong suspect behind high #inflation is becoming increasingly clear, #insurance: - "Insurance Costs Are Pushing Up Overall Inflation"; Jeanna Smialek, The New York Times - "Homeowners insurance is a stealth inflation driver"; Emily Peck, Axios. #HomeownersInsurance costs are up around 20% over the past 2 years & are projected to rise another 6% in 2024. The cost of insuring an average home is up 50% from 2019 & the #ConsumerPriceIndex (CPI) doesn’t even measure homeowners’ insurance! If it did, it would have pushed #CPI up another 0.7% in 2023, for those that could get or still afford insurance. The Insurance Industry is making itself less relevant every day this issue is allowed to fester. There are 3 ways to spread Mega Risks via insurance pooling; across time, across other policyholders, & (the 1 everyone forgets) across other risks. “Here’s How to Stabilize the Insurance Markets and Protect the Economy: The Case for Government-Backed Catastrophic Perils Coverage”. https://lnkd.in/gMzAmR4J

8

4 Comments

There are numerous efforts underway attempting to compel the insurance industry to reflect parcel- and community-level wildfire mitigation actions in underwriting and pricing. Unfortunately, these efforts generally fail to recognize that some of the most crucial data needed to achieve this end state is "unobtainium" ==> too expensive, inconsistently maintained, and/or not aggregatable. How can the insurance industry take the lead on addressing the gap between the data we have and the data we need? How do we increase transparency for property-owners and communities, and drive effective action to reduce the risk of conflagration in the wildland-urban interface? On Tuesday April 23rd, I will be joined by Ian Giammanco, PhD from Insurance Institute for Business & Home Safety - IBHS, Ryan Vigus from CSAA Insurance Exchange, and Frank Frievalt from California Polytechnic State University-San Luis Obispo WUI Fire Institute as we discuss the "WUI Data Commons" concept. The WUI Data Commons will serve as a critical building block for increasing wildfire resilience for both insurers and communities through data consistency and transparency. #wildfire #climateresilience #insurance To attend this free webinar, register at the link below: https://lnkd.in/gFAsjAki

55

8 Comments

The article should have been titled "Why actuarial expertise is now low key for insurers". If you are an auto MGA or carrier in California and you had combined ratio that averaged under 96% the last 3 year then you get it. Others who don't have a combined ratio under 100 appear to grasping at needles in a haystack. Why? One reason is actuarial expertise appears to be grounded in flawed principles. Historically we've calculated premiums based on data assumptions. If a man has drivers license for 20 years he must be a better driver than man with license for 2 years. That could be correct. But it could also cause you to run in the red. Every company know that a "me too" filing doesn't guarantee "me too" profitability. Having a better understanding of the risk and pricing it appropriately can. Actuarial expertise incorporates a deep understanding of our industry. It should also be grounded in a deep understanding of consumer you are serving. The integration of data science will hopefully can take insurers from insurance dinosaurs. The article doesn't really explain how. They would like you to spend money with the article's sponsor to get any real insight. How can change your destiny from a future similar to dinosaurs of the past? Learn how to improve every touchpoint with AI. Learn how to increase employee engagement with AI. How do we start? Examine workflows. Examine high frequency communication with policy holders. Remember everything is a data point, but not all data provides insight. Actuarial expertise is framed in 20th century experience. The chart below was taken from a study done last year by Statista. We have way too much to process each day. Improve your team's ability to impact your organization you will improve your ratios. Improve your client experience you will improve your ratios. Despite some opinions, you can't control severity. You can however use AI to dynamically improve your modeling without the need to constant rate filings.

1

Value-add risk insights and decision support at your fingertips. Data straight to analytics. The future is here. If you want to know more, I will be at RIMS next week. #WTW #Riskanalytics

23

1 Comment

HATERS GONNA HATE, FITCH IS GONNA RATE! An upcoming report from Fitch Ratings highlights the continued profitability of the market for #CyberInsurance, refuting the naysayers who have doubted the sustainability of this product. In this episode, David explains how businesses can take advantage of these favorable market conditions to obtain better pricing and coverage terms. THE CYBER INSURANCE IMPERATIVE with David Finz. Season 5: Episode 19 Listen on Spotify: https://lnkd.in/eE8__QYT Listen on Apple Podcasts: https://lnkd.in/eCyYVAnA Watch on YouTube (closed captioning available): Link below SUPPORT THIS PODCAST! Follow on Spotify and subscribe on YouTube #CyberRisk #RiskAssessment #CyberSecurity #TheMoreRewardingWay

20

Cyber risks are mostly 'stealth risks". There are a handful of stealth risks in the traditional - historic - insurance market but most risks in the traditional insurance market are "physical", can be seen, can be touched. One of the stealth risks in the traditional insurance market is the risk of Business Interruption during a Global Pandemic - and insurers should not offer cover for it. Another stealth risk are the company behaviors and actions that cause discrimination and insurers should offer cover for it even if no-one can "see" or "feel" the discriminatory words being spoken but every one can feel the results. Cyber risks, for the most part, can not be seen or felt until a cyber attack takes place damaging or destroying a digital artifact. Cyber risks are superb experts at self-creating and, too often, self-compounding in unseen - and unseeable - pools of digital artifacts or embedding themselves unseen - and unseeable - in physical artifacts or farm animals or manufacturing equipment (with attached IP-sensors connected to the web). Cyber risks are species which are expert in providing the requisite resources to birth cyber attacks (at unknowable times and at unknowable places) which perform unseen and unseeable activities in: 1. digital artifacts; 2. physical artifacts or farm animals or manufacturing equipment (each with attached or embedded IP-sensors connected to the web); ... ... quietly gathering data, learning the processes of the attacked entities, and either waiting until the "right" time and place to attack and/or to sell their approach and/or gathered intel to other predators. It's a situation somewhat like "Wonderland": all that the insurance industry knows is above the Rabbit Hole. The insurance industry hopes that the thousands of years of knowledge about risks (whether stealth or not), it can apply (profitably) once it falls down the Rabbit Hole into "Wonderland". #cyber #cyberriskrabbithole

3

1 Comment

At this year's National Bureau of Economic Research meeting of the #insurance work group the importance of price-making in distressed markets was the big topic. While building Next Generation Models [NGM] at Verisk we wrote two articles (with Society of Actuaries, Casualty Actuarial Society review) for colleagues in #underwriting & #riskmanagement. The papers outline the value of our view of natural #catastrophe risk for metrics in spatial #diversification, https://lnkd.in/e2ebr5aG & for competitive #premium pricing, https://lnkd.in/e66HebMu. These have brought about some excellent discussion on the #insurancecoverage gap & a suggestion to look at the theoretical volume of #reinsurance coverage needed for distressed markets to function properly. If interested to contribute with data or research, please reach out, #floridainsurace, #californiainsurance

1

As Supply Chains normalize from the #pandemic, a strong suspect behind high, sticky #inflation is becoming increasingly clear, #insurance: - "Insurance Costs Are Pushing Up Overall Inflation"; Jeanna Smialek, The New York Times - "Homeowners insurance is a stealth inflation driver"; Emily Peck, Axios. Homeowners Insurance costs are up around 20% over the past 2 years & are projected to rise another 6% in 2024. The cost of insuring an average home is up 50% from 2019 & the Consumer Price Index (CPI) doesn’t even measure homeowners’ insurance! If it did, it would have pushed #CPI up another 0.7% in 2023, for those that could even get, or still want insurance. It is heartbreaking 💔 to read so many headlines regarding the “uninsurability” of #ClimateChange, #Florida, #California, or anything else! - “Insurer’s Retreat in Florida Signals Crisis With No Easy Fix”; Emily Flitter, The New York Times. - “What to do when the US becomes uninsurable”; Rana Foroohar, Financial Times. I am tired of watching my friends around the country struggle to get and pay for insurance, especially when this crisis is solvable. There are 3 ways to spread Mega Risks via insurance pooling; across time, across other policyholders, & (the 1 everyone always forgets) across other risks. “Here’s How to Stabilize the Insurance Markets and Protect the Economy: The Case for Government-Backed Catastrophic Perils Coverage”

10

AI is clearly being taken seriously at a broader level. 7 states adopt #AI rules for insurers to follow https://ow.ly/ignh30sBvBE

7

Our TC wind, storm surge and inland flood models are based on global sea surface temperature (SST). Climate variability included are a warm Atlantic SST as well as La Nina, both conditions that increase many risk measures in the US this year.

25

Memo to insurance companies that insure ⁦Columbia University: If the university seeks coverage for the damage caused you should look into whether you can deny coverage because much of the damage was self-inflicted due to the university mishandling of the issue.

99

7 Comments

Great interview with Lauren Finnis. I think her points about training are especially salient. While the next generation are steeped in AI education, those currently leading risk teams aren't as up to speed, at least in formal training. Taking the time to inform is its own form of risk mitigation! #RiskManagement #AI #Upskilling

16

Last year, SCS accounted for $60bn of global insured losses (estimated by Swiss Re Institute). This video is an unfortunate visual of the power packed in these severe convective storms (SCS). Supply chain management and risk management come together at times like this to allocate resources for companies to get back up and running. To reduce the financial impact around a loss like this, companies need to consider contingency & emergency planning, impact to workforce, impact to revenue, reallocation of products from other warehouses, and reconstruction plans. USI can assist through our risk control pre-loss assessments. Reach out if you have any questions. #riskcontrol #safety #insurance https://lnkd.in/eH3-Ezky

9

1 Comment

Lots of insights here at Insurtech Hartford! Bob Frady nailed it once again in his latest round table: 🔹On the siloed nature of insurance: "Getting claims and underwriting together is like playing 23-and-me: Yes, you guys really are are related!"🧬 🔹About predict and prevent: "I mean, the best claim is the one that never happens at all ... right?"🔮 We couldn't agree more - let's work together as an industry and get claims under control. We can do this! #ihs2024 #customerengagement #claims #underwriting

26

In the Trenches: Our Quest to Revolutionize Insurance Operations Ever wonder what drives a seasoned consulting firm to leap into product development? It's the unmistakable call to solve real problems. 🚀 Bridging the Divide: With a rich history of partnering with over 40 insurtechs, predominantly MGAs and MGUs, we've seen firsthand the strife that disjointed systems can cause. From gnarly accounts receivable issues to the cumbersome servicing of policies, the symptoms were loud, but the problems ran deeper. From Observers to Innovators: The pivot from consulting to creating wasn't a leap; it was a calculated stride into familiar territory. Armed with intimate knowledge of our clients' pain points—whether they're just starting or doubling their book size year after year—we realized something vital. The industry wasn't just yearning for a patch but a comprehensive solution. Rolling Up Our Sleeves: Our team thrives on challenges. We're not just problem identifiers; we're passionate problem solvers. We're gearing up to unveil a solution that doesn't just address symptoms but eradicates the root causes of operational inefficiencies in insurance. Mark Your Calendars: The countdown has begun. We're not just announcing the launch of our a product; we're unveiling a new dawn for insurance operations. Prepare to reimagine what's possible. Stay tuned for the revolution coming April 22nd. #InsuranceInnovation #OperationalRevolution #insurance #insurtech

8

3 Comments

Only a few days left for the Colorado based companies to submit the interim report on the use of external data (Insurance Regulation 10-1-1, aka 3CCR702-10) by the June 1 deadline. Companies are asking for guidance from the Department of Regulatory Agencies - Division of Insurance. => No specific template => DORA reminds companies to address section 5 => DORA suggests an executive summary, brief update on progress to section 5A and 5B, challenges and possible solutions with timeline. https://lnkd.in/gzFTyU82

3

At this year's National Bureau of Economic Research meeting of the #insurance group the importance of price-making in distressed markets was the big topic. While building Next Generation Models [NGM] at Verisk Extreme Event Solutions, we wrote these two articles (with Society of Actuaries, Casualty Actuarial Society review) for colleagues in #underwriting and #riskmanagement. The papers outline the value of our view of natural catastrophe risk for metrics in spatial #diversification, https://lnkd.in/edkp89T & for competitive #premium pricing, https://lnkd.in/gA5bZTyJ. These have brought about some excellent discussion in the community on the #insurancecoverage gap & a worthy suggestion to look at the theoretical volume of #reinsurance coverage needed for distressed markets to function properly with enhanced clarity, certainty and predictability. If interested to contribute with data or research, please reach out. #floridainsurace, #californiainsurance

4

🏁 Beginning #digitisation and #automation is easy - it's seeing it through that's the hard part for many reinsurance companies. What's worse is the false perception that by starting well, your company will be more likely to complete its digitisation efforts quicker and easier than expected. A concept that comes to mind is Tobias Zwingmann’s 80% fallacy. I would hate to rain on any company's digitisation parade but it really must be stressed that underestimation of the latter half of your digitisation implementation could be the breaking of the entire initiative. Tobias speaks of #AI development of which I am not an expert but from my experience with digitisation and automation in reinsurance, I could tell the exact same story. He says that while initial progress may come quickly, the final 20% of development is exponentially more challenging and time-consuming. This fallacy often leads to underestimation of resources and timelines, resulting in failed projects. You can avoid falling victim to the 80% fallacy in a few ways: 👉 Manage expectations By clearly communicating the challenges of moving from 80% to 100% accuracy, you can establish realistic timelines and milestones that account for the exponential increase in complexity. 👉 Phase your implementation In a similar light to an article I wrote recently referencing McKinsey & Company's stairway to digital excellence, an incremental approach allows for digitisation to scale with your company's readiness, reducing the risk of insurmountable issues later on. 👉 Don't delay change management You will want this sorted from the start as it can be a real hurdle later down the line if not dealt with effectively. Do this by adequately training employees and preparing them for the new digital or automated processes. And of course, if you require support with any of the above, get in touch using the link below and I will be happy to discuss how we can work together to get your reinsurance company to 100% at last. https://www.buondrius.com/ #reinsurance

18

1 Comment