Underwriting and loss modeling |
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Escalating competitive pressures cut the number of insurers serving the United States by a third in a decade and a half and insurers face daunting array of other challenges, including the prospect of ever-increasing catastrophe losses. It has always been understood that detailed underwriting is the foundation to a profitable insurance business. However, with recent catastrophes impacting carrier loss ratios, there has been a return to underwriting basics and the development of new tools to improve the accuracy of pricing in the industry.
The use of selection rules based pricing and automated underwriting expert systems has also left a lot to be desired in terms of improving loss ratios. In more recent times, the use of credit scores and more specialized insurance scores has grown in popularity. Fractal leverages the effectiveness of credit scoring for insurance underwriting. We help insurers identify the correlation between credit score and loss cost for personal lines insurance. We develop insurance scores that are targeted directly at loss results which helps to more accurately predict the future loss potential of individual risks. Fractal also leverages subject matter experts to cater to the specialized needs of insurers, for example, the prediction of probable maximum loss associated with catastrophic events which requires knowledge of the insurance products, geology and geography.
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