Usage-based Auto Insurance (UBI)

Save this PDF as:
 WORD  PNG  TXT  JPG

Size: px
Start display at page:

Download "Usage-based Auto Insurance (UBI)"

Transcription

1 Usage-based Auto Insurance (UBI) A revolution is underway. Is your company ready? A presentation to 2013 CIA Annual Meeting by Pierre G. Laurin June 21, Towers Watson. All rights reserved.

2 What if you found a new product that......further refined risks so that the worst segment s loss ratio was five times higher than that of the best segment?...was self-selected by customers who have longer retention and a loss ratio 15% better than the rest of your book?...helped the majority of insureds reduce their accident frequency by more than 20%?...enabled you to significantly differentiate your product from your competitors?...was embraced by regulators and, in some cases, even subsidized by the government? Would you use it? 2

3 Usage-Based Insurance (UBI) Customer Feedback Insurance Premium $1,200 $1,080 $1,000 $ 900 Company Feedback Vehicle Score VIN: Miles driven: 6,234 Event 1 per mile:.05 Event 2 per mile:.01 3

4 Why is UBI game-changing? Differentiates product offering by offering additional services Significantly increases pricing accuracy Appeals to consumers as it makes sense, is controllable and minimizes reliance on controversial proxies Attracts lower-risk insureds via self-selection Allows customers to understand and eliminate risky behaviors, actually reducing accident frequency Improves claims handling Better Pricing Risk Reduction Claims Handling Self Selection Increased Profits and Retention Customer Satisfaction All of these advantages lead to increased profits and improved retention. 4

5 Appeals to participating consumers Improves driving behavior Controllable Makes sense and reduces reliance on proxies Insurance credit scores Driver assignment Charges for relatively rare accidents, convictions Ancillary services Voluntary with consent form Ability to drop out 5

6 What is the perspective of the consumer? Understand it and like to control their premium Consumers don t like the use of credit scores because it doesn t make sense Generally speaking, good drivers opt in, get participation discounts, and have the opportunity for even greater discounts Want access to useful driving feedback Accidents are the leading killer of teens; UBI programs give parents a variety of tools to help monitor and counsel their teen drivers Many adults are faced with elderly parents whose driving is deteriorating. UBI can help evaluate skill deterioration and provide helpful safety tips Like options for value-added services Consumers generally like options Programs vary from basic to deluxe in their service offerings Value companies that are green and progressive Society is becoming increasingly environmentally conscious, and consumers value companies that are green Younger consumers like new and different products even when the product may not appeal to them Most consumers view UBI favorably and participants are very satisfied 6

7 How do regulators feel about UBI? Want variables that are fairly discriminatory Like that UBI makes sense and is controllable All provinces require that rates are adequate and not excessive or unfairly discriminatory UBI varies rates based on driving behavior, which has been proven to be predictive and is clearly fair Need to ensure that start-up costs are allocated to the right cohort Regulators are concerned with factors like credit that don t make sense to consumers; UBI makes sense Regulators prefer variables that give the consumer control to reduce costs without reducing coverage Support green initiatives Safer driving and fewer miles significantly reduce emissions Endorse efforts to save lives Highway accidents result in approximately 200,000 injuries and 3,000 fatalities in Canada each year, and the government seeks to reduce that through various programs Driver feedback significantly reduces risky driving For these reasons, regulators are anxious to approve UBI programs 7

8 What does it mean for the company? Better pricing The predictive power of the telematics data is undeniable Initial programs included relativities from 0.39 to 1.09 on top of the existing rating plan, highlighting the additional segmentation power Product differentiation and brand awareness Some programs are very basic discount programs that will appeal to pricesensitive groups; more sophisticated programs offer a wide variety of valueadded services that differentiate the product UBI programs promote the idea that the company is modern and green Reduced loss costs Consumer satisfaction and retention Consumers understand UBI, so there is a significant self-selection effect Behavioral modification programs have been shown to significantly reduce risky driving and, consequently, accident frequency Potential for further reduction by using data in claims handling Consumers want to pay less for their insurance and UBI gives discounts that only their current carrier can offer (as others don t know their driving behavior) Ancillary services (e.g., teen tracking) greatly appeal to certain consumers and make the insurance product more valuable to them Retaining existing customers is significantly cheaper than adding new ones UBI programs lead to better retention and greater profits 8

9 CAS Statement of Principles Regarding Property and Casualty Insurance Ratemaking Principle 1: A rate is an estimate of the expected value of future costs Principle 2: A rate provides for all costs associated with the transfer of risk Principle 3: A rate provides for the costs associated with an individual risk transfer Principle 4: A rate is reasonable and not excessive, inadequate, or unfairly discriminatory if it is an actuarially sound estimate of the expected value of all future costs associated with an individual risk transfer 9

10 CAS Statement of Principles Regarding Property and Casualty Insurance Ratemaking (continued) Considerations selected excerpt: Exposure Unit The determination of an appropriate exposure unit or premium basis is essential. It is desirable that the exposure unit vary with the hazard and be practical and verifiable Homogeneity Ratemaking accuracy often is improved by subdividing experience into groups exhibiting similar characteristics. For a heterogeneous product, consideration should be given to segregating the experience into more homogeneous groupings. Additionally, subdividing or combining the data so as to minimize the distorting effects of operational or procedural changes should be fully explored Credibility Credibility is a measure of the predictive value that the actuary attaches to a particular body of data. Credibility is increased by making groupings more homogeneous or by increasing the size of the group analyzed. A group should be large enough to be statistically reliable. Obtaining homogeneous groupings requires refinement and partitioning of the data. There is a point at which partitioning divides data into groups too small to provide credible patterns. Each situation requires balancing homogeneity and the volume of data 10

11 CAS Statement of Principles Regarding Property and Casualty Insurance Ratemaking (continued) Considerations selected excerpt: Individual Risk Rating When an individual risk s experience is sufficiently credible, the premium for that risk should be modified to reflect the individual experience. Consideration should be given to the impact of individual risk rating plans on the overall experience Risk The rate should include a charge for the risk of random variation from the expected costs. This risk charge should be reflected in the determination of the appropriate total return consistent with the cost of capital and, therefore, influences the underwriting profit provision. The rate should also include a charge for any systematic variation of the estimated costs from the expected costs. This charge should be reflected in the determination of the contingency provision 11

12 Risk Classification Statement of Principles The grouping of risks with similar risk characteristics for the purpose of setting prices is a fundamental precept of any workable private, voluntary insurance system This process, called risk classification, is necessary to maintain a financially sound and equitable system It enables the development of equitable insurance prices, which in turn assures the availability of needed coverage to the public Three primary purposes of risk classification: protect the insurance system s financial soundness; be fair; and permit economic incentives to operate and thus encourage widespread availability of coverage Statistical criteria: Statistical significance, Homogeneity, Credibility large enough and/or stable enough 12

13 Other Considerations (other than actuarial that is ) Acceptability / measurability / use of proxy e.g. is age proxy for driving behaviour? Political considerations? Mandatory pools / regulation / if not affordable Operational criteria: objective, inexpensive to administer, verifiable Social criteria: affordability, causality, controllability, privacy concerns Legal criteria 13

14 UBI (in personal auto) will continue to evolve to provide value beyond discounts Influence drivers to improve driving behavior Potential to save lives and significantly impact profitability Compelling proposition for the broader market beyond the self-selectors Creates long-term customer stickiness Protect the insured and family Example: Parent-teen relationships Enhances overall value of customer relationship Simple rating-based program Discount driven, leverage self-selection Target, attract and retain high-profit customers as they are Introduce range of new services Customers opt (and pay) for services they value Insurer uses these services to differentiate product UBI-related technology and applications are also changing rapidly solutions must evolve at a faster pace than typical for insurers 14

Usage-Based Insurance

Usage-Based Insurance Usage-Based Insurance Casualty Actuarial Society Spring Meeting Kelleen Arquette May 2013 2013 Towers Watson Global. All rights reserved. What is UBI? towerswatson.com 2013 Towers Watson. All rights reserved.

More information

Telematics. The New Auto Insurance

Telematics. The New Auto Insurance Telematics The New Auto Insurance By Alex Laurie Telematic technologies are approaching a tipping point as obstacles to their widespread application are overcome in rapid succession. How are these technologies

More information

Usage-Based Insurance

Usage-Based Insurance Usage-Based Insurance A revolution is under way A presentation to OII s 2013 Insurance Education Day Advisory Council By Katie DeGraaf April 2013 What is UBI? UBI Benefits UBI Marketplace The Product Roadmap

More information

Usage-based Insurance. C-Counsel Consultant

Usage-based Insurance. C-Counsel Consultant Usage-based Insurance Robin Harbage C-Counsel Consultant Agenda Introduction Current UBI Programs Telematics Technology Data Value Implementation 2009 EMB. All rights reserved. Slide 2 INTRODUCTION What

More information

Innovations in Retail Insurance

Innovations in Retail Insurance Innovations in Retail Insurance SOAT Non-Life Insurance Forum 2011 Ron Kozlowski 23 September 2011 2011 Towers Watson. All rights reserved. CONTENTS Innovation in Retail Tariffs fact or fiction? Adding

More information

My name is Steven Lehmann. I am a Principal with Pinnacle Actuarial Resources, Inc., an actuarial consulting

My name is Steven Lehmann. I am a Principal with Pinnacle Actuarial Resources, Inc., an actuarial consulting Insurer Use of Education and Occupation Data National Conference of Insurance Legislators Special Property-Casualty Insurance Meeting February 28, 2009 My name is Steven Lehmann. I am a Principal with

More information

LINKING DRIVING BEHAVIOR TO AUTOMOBILE ACCIDENTS AND INSURANCE RATES AN ANALYSIS OF FIVE BILLION MILES DRIVEN

LINKING DRIVING BEHAVIOR TO AUTOMOBILE ACCIDENTS AND INSURANCE RATES AN ANALYSIS OF FIVE BILLION MILES DRIVEN LINKING DRIVING BEHAVIOR TO AUTOMOBILE ACCIDENTS AND INSURANCE RATES AN ANALYSIS OF FIVE BILLION MILES DRIVEN JULY 2012 1 2 3 4 5 EXECUTIVE SUMMARY USAGE BASED INSURANCE OVERVIEW DATA METHODOLOGY KEY FINDINGS

More information

Auto Insurance Telematics: Where the Data Meets the Road

Auto Insurance Telematics: Where the Data Meets the Road Casualty Actuarial Society Annual Meeting: Auto Insurance Telematics: Where the Data Meets the Road John Lucker, Principal, Global Advanced Analytics & Modeling Market Leader, Deloitte Consulting LLP Sam

More information

Alberta Private Passenger Usage Based Insurance (UBI) Implementation Process Consultation The Co-operators January 30, 2015

Alberta Private Passenger Usage Based Insurance (UBI) Implementation Process Consultation The Co-operators January 30, 2015 Alberta Private Passenger Usage Based Insurance (UBI) Implementation Process Consultation The Co-operators January 30, 2015 Friday, January 30, 2015 Mr. Mark Prefontaine Superintendent of Insurance 402

More information

WCB-Alberta. 2014 Premium Rates

WCB-Alberta. 2014 Premium Rates WCB-Alberta 2014 Premium Rates Foreword The Alberta Workers Compensation Board sets premium rates annually for each industry. This guide is meant to provide a basic understanding of the process for setting

More information

Improve Rating Accuracy and Segmentation for Commercial Lines auto policies

Improve Rating Accuracy and Segmentation for Commercial Lines auto policies Noble Wilson Carver Improve Rating Accuracy and Segmentation for Commercial Lines auto policies Let s start with what we should know Does UBI improve the way we segment, rate & price? Segmentation: Automated

More information

Price Optimization in Auto Insurance Markets

Price Optimization in Auto Insurance Markets Price Optimization in Auto Insurance Markets Actuarial, Economic and Regulatory Considerations National Conference of Insurance Legislators Indianapolis, IN July 17, 2015 Robert P. Hartwig, Ph.D., CPCU,

More information

ANNUAL STUDY OF MEDICAL MALPRACTICE INSURANCE MARKET IN ARKANSAS

ANNUAL STUDY OF MEDICAL MALPRACTICE INSURANCE MARKET IN ARKANSAS A REPORT TO THE LEGISLATIVE COUNCIL AND THE SENATE AND HOUSE COMMITTEES ON INSURANCE AND COMMERCE OF THE ARKANSAS GENERAL ASSEMBLY (AS REQUIRED BY 1007 OF 2003) ANNUAL STUDY OF MEDICAL MALPRACTICE INSURANCE

More information

REPORT EXTRACTS RELATING TO THE RECOMMENDATION FOR INSURANCE PREMIUM TAX RELIEF ON TELEMATICS MOTOR INSURANCE FOR YOUNG DRIVERS

REPORT EXTRACTS RELATING TO THE RECOMMENDATION FOR INSURANCE PREMIUM TAX RELIEF ON TELEMATICS MOTOR INSURANCE FOR YOUNG DRIVERS REPORT EXTRACTS RELATING TO THE RECOMMENDATION FOR INSURANCE PREMIUM TAX RELIEF ON TELEMATICS MOTOR INSURANCE FOR YOUNG DRIVERS In order to meet Treasury s consultation timetable for budget proposals,

More information

Telematics Big Data or Big Brother

Telematics Big Data or Big Brother Telematics Big Data or Big Brother Robin Harbage, FCAS, MAAA October 23, 2015 2015 Towers Watson. All rights reserved. Telematics Big Data or Big Brother Uses the pros and the cons Privacy implications

More information

Anti-Trust Notice. Agenda. Three-Level Pricing Architect. Personal Lines Pricing. Commercial Lines Pricing. Conclusions Q&A

Anti-Trust Notice. Agenda. Three-Level Pricing Architect. Personal Lines Pricing. Commercial Lines Pricing. Conclusions Q&A Achieving Optimal Insurance Pricing through Class Plan Rating and Underwriting Driven Pricing 2011 CAS Spring Annual Meeting Palm Beach, Florida by Beth Sweeney, FCAS, MAAA American Family Insurance Group

More information

Personal Auto Predictive Modeling Update: What s Next? Roosevelt Mosley, FCAS, MAAA CAS Predictive Modeling Seminar October 6 7, 2008 San Diego, CA

Personal Auto Predictive Modeling Update: What s Next? Roosevelt Mosley, FCAS, MAAA CAS Predictive Modeling Seminar October 6 7, 2008 San Diego, CA Personal Auto Predictive Modeling Update: What s Next? Roosevelt Mosley, FCAS, MAAA CAS Predictive Modeling Seminar October 6 7, 2008 San Diego, CA You ve Heard Where predictive modeling for auto has been

More information

Shift to a sample of one.

Shift to a sample of one. White Paper : Thinking Outside the Box Shift to a sample of one. Telematics data enables carriers to accurately determine an individual driver s level of risk within weeks of program inception. October

More information

The Use of Education and Occupation as Underwriting Factors in Determining Policyholder Premiums for Private Passenger Auto Insurance

The Use of Education and Occupation as Underwriting Factors in Determining Policyholder Premiums for Private Passenger Auto Insurance The Use of Education and Occupation as Underwriting Factors in Determining Policyholder Premiums for Private Passenger Auto Insurance Written Testimony of Robert P. Hartwig, Ph.D., CPCU President & Chief

More information

Survey of External Data Possibilities for Commercial Insurance

Survey of External Data Possibilities for Commercial Insurance Survey of External Data Possibilities for Commercial Insurance 2015 CAS Ratemaking and Product Management Seminar Tom Kolde, FCAS, MAAA Kathryn Walker, FCAS, MAAA, CPCU March 11, 2015 Discussion Topics

More information

Auto Insurance Sample Premium Tables 2014/15

Auto Insurance Sample Premium Tables 2014/15 Auto Insurance Sample Premium Tables 2014/15 Prepared by Commonwealth of State Corporation Commission Bureau of Insurance P.O. Box 1157 Richmond, 23218 (804) 371-9185 (877) 310-6560 Website: www.scc.virginia.gov/boi

More information

RISK CLASSIFICATION STATEMENT OF PRINCIPLES. American Academy of Actuaries. Committee on Risk Classification

RISK CLASSIFICATION STATEMENT OF PRINCIPLES. American Academy of Actuaries. Committee on Risk Classification RISK CLASSIFICATION STATEMENT OF PRINCIPLES American Academy of Actuaries Committee on Risk Classification This booklet has been prepared for an audience generally familiar with insurance concepts and

More information

UBI can help carriers attract more customers.

UBI can help carriers attract more customers. White Paper 2014 Usage-Based Insurance (UBI) Research Results for Consumer and Small Fleet Markets UBI can help carriers attract more customers. LexisNexis found that 18 percent of consumers and 27 percent

More information

DRIVE PROFITABLE REVENUE AND KEEP CUSTOMERS COMING BACK. Usage-Based Insurance

DRIVE PROFITABLE REVENUE AND KEEP CUSTOMERS COMING BACK. Usage-Based Insurance DRIVE PROFITABLE REVENUE AND KEEP CUSTOMERS COMING BACK. Usage-Based Insurance ADVANCES IN MACHINE-TO-MACHINE (M2M) TECHNOLOGY HAVE GIVEN RISE TO MORE INTERACTIVE AND INSIGHTFUL METHODS FOR TRACKING DRIVER

More information

Insights. Predictive Modeling. Predictive Modeling Proving Its Worth Among P&C Insurers. Highlights. The Current State

Insights. Predictive Modeling. Predictive Modeling Proving Its Worth Among P&C Insurers. Highlights. The Current State Insights February 2012 Predictive Modeling Predictive Modeling Proving Its Worth Among P&C Insurers Highlights Predictive modeling using statistical modeling approaches to better understand and price individual

More information

CANADA & TELEMATICS 1

CANADA & TELEMATICS 1 CANADA & TELEMATICS 1 Telematics is expanding globally, with the US, Italy and UK leading EUROPE Market: Allianz making significant investment and partnering with OEMs. CANADA ~5% of insured private vehicles

More information

Large Scale Analysis of Persistency and Renewal Discounts for Property and Casualty Insurance

Large Scale Analysis of Persistency and Renewal Discounts for Property and Casualty Insurance Large Scale Analysis of Persistency and Renewal Discounts for Property and Casualty Insurance Cheng-Sheng Peter Wu, FCAS, ASA, MAAA Hua Lin, FCAS, MAAA, Ph.D. Abstract In this paper, we study the issue

More information

INSURANCE IN THE UK: THE BENEFITS OF PRICING RISK. January 2008

INSURANCE IN THE UK: THE BENEFITS OF PRICING RISK. January 2008 INSURANCE IN THE UK: THE BENEFITS OF PRICING RISK January 2008 1 INSURANCE IN THE UK: THE BENEFITS OF PRICING RISK How insurance deals with risk Insurance protects people and businesses against the risks

More information

UK Insurers have been frantically searching

UK Insurers have been frantically searching Insurance Telematics Issue 1 THINKING OUTSIDE OF THE BOX For too long now Insurers have been trapped inside the hamster wheel of market underwriting cycles, hoping that today s customers are more profitable

More information

Presented to the Automobile Insurance Rate Board August 18, 2015. Chris Daniel, Consumer Representative

Presented to the Automobile Insurance Rate Board August 18, 2015. Chris Daniel, Consumer Representative Presented to the Automobile Insurance Rate Board August 18, 2015 Chris Daniel, Consumer Representative 1 Work independently to collect consumers comments and concerns Then forward these comments and concerns

More information

A Pricing Model for Underinsured Motorist Coverage

A Pricing Model for Underinsured Motorist Coverage A Pricing Model for Underinsured Motorist Coverage by Matthew Buchalter ABSTRACT Underinsured Motorist (UIM) coverage, also known as Family Protection coverage, is a component of most Canadian personal

More information

Presented to the. Board of Commissioners of Public Utilities MELOCHE MONNEX COMMENTS ON

Presented to the. Board of Commissioners of Public Utilities MELOCHE MONNEX COMMENTS ON MELOCHE MONNEX COMMENTS ON THE REVIEW OF AUTOMOBILE INSURANCE IN NEWFOUNDLAND AND LABRADOR Presented to the Board of Commissioners of Public Utilities February 2005 TABLE OF CONTENT PREAMBLE... 3 INTRODUCTION...

More information

NEW JERSEY COMPENSATION RATING & INSPECTION BUREAU EXPLORING THE COST OF A WORKERS COMPENSATION INSURANCE POLICY

NEW JERSEY COMPENSATION RATING & INSPECTION BUREAU EXPLORING THE COST OF A WORKERS COMPENSATION INSURANCE POLICY NEW JERSEY COMPENSATION RATING & INSPECTION BUREAU EXPLORING THE COST OF A WORKERS COMPENSATION INSURANCE POLICY 2007 INTRODUCTION This booklet provides a basic explanation of how the cost of a New Jersey

More information

Group Captive Insurance Programs for Property and Casualty Coverages

Group Captive Insurance Programs for Property and Casualty Coverages Group Captive Insurance Programs for Property and Casualty Coverages Duke Niedringhaus, ARM Vice President J.W. Terrill, Inc. April 2013 Group captive insurance programs can be an attractive alternative

More information

ON THE CUSP OF TRANSFORMATION

ON THE CUSP OF TRANSFORMATION ON THE CUSP OF TRANSFORMATION All this information is potentially of tremendous value to insurers as they seek to improve the accuracy of their actuarial analytics, deliver competitively differentiated

More information

Innovations and Value Creation in Predictive Modeling. David Cummings Vice President - Research

Innovations and Value Creation in Predictive Modeling. David Cummings Vice President - Research Innovations and Value Creation in Predictive Modeling David Cummings Vice President - Research ISO Innovative Analytics 1 Innovations and Value Creation in Predictive Modeling A look back at the past decade

More information

R590. Insurance, Administration. R590-127. Rate Filing Exemptions. R590-127-1. Authority. R590-127-2. Purpose. R590-127-3. Scope.

R590. Insurance, Administration. R590-127. Rate Filing Exemptions. R590-127-1. Authority. R590-127-2. Purpose. R590-127-3. Scope. R590. Insurance, Administration. R590-127. Rate Filing Exemptions. R590-127-1. Authority. This rule is promulgated by the Insurance Commissioner pursuant to the general authority granted under Section

More information

2013 North American Automotive Usage Based Insurance Customer Value Enhancement Award

2013 North American Automotive Usage Based Insurance Customer Value Enhancement Award 2013 North American Automotive Usage Based Insurance Customer Value Enhancement Award 2013 Customer Value Enhancement Award Automotive Usage Based Insurance North America, 2013 Frost & Sullivan s Global

More information

top issues An annual report

top issues An annual report top issues An annual report Volume 5 2013 Strategy: Reshaping auto insurance The insurance industry in 2013 FPO Strategy: Reshaping auto insurance Several factors aimed at road and vehicle safety are increasingly

More information

ANNUAL STUDY OF MEDICAL MALPRACTICE INSURANCE MARKET IN ARKANSAS

ANNUAL STUDY OF MEDICAL MALPRACTICE INSURANCE MARKET IN ARKANSAS A REPORT TO THE LEGISLATIVE COUNCIL AND THE SENATE AND HOUSE COMMITTEES ON INSURANCE AND COMMERCE OF THE ARKANSAS GENERAL ASSEMBLY (AS REQUIRED BY ACT 1007 OF 2003) ANNUAL STUDY OF MEDICAL MALPRACTICE

More information

Territorial Rating System for Automobile Insurance

Territorial Rating System for Automobile Insurance Sec. 38a-686 page 1 (5-12) TABLE OF CONTENTS Territorial Rating System for Automobile Insurance Definitions. 38a-686-1 Private passenger nonfleet automobile insurance rate filings. 38a-686-2 Private passenger

More information

Developments in motor insurance. Non-Life Insurance Forum 2012-16 th November 2012

Developments in motor insurance. Non-Life Insurance Forum 2012-16 th November 2012 Developments in motor insurance Non-Life Insurance Forum 2012-16 th November 2012 1 Overview United Kingdom Development of Motor insurance & Aggregators South Africa Telematics Sri Lanka On-the-spot payments

More information

Stempora Group, LLC SG

Stempora Group, LLC SG and Medium Sized Companies October 3, 2011 Stempora Group, LLC SG Moderator: Gary Wang, FCAS, MAAA Pinnacle Actuarial Resources, Inc. Panelist: Jeff Stempora, Founder and CEO Stempora Group, LLC Table

More information

Intelligent Use of Competitive Analysis

Intelligent Use of Competitive Analysis Intelligent Use of Competitive Analysis 2011 Ratemaking and Product Management Seminar Kelleen Arquette March 21 22, 2011 2011 Towers Watson. All rights reserved. AGENDA Session agenda and objectives The

More information

Statement on Genetic Testing and Insurance

Statement on Genetic Testing and Insurance Statement Statement on Genetic Testing and Insurance June 2014 Document 214073 Ce document est disponible en français 2014 Canadian Institute of Actuaries STATEMENT ON GENETIC TESTING AND INSURANCE This

More information

Leveraging Information to Drive Insurer Growth

Leveraging Information to Drive Insurer Growth KNOWLEDGENT INSIGHTS volume 2 no. 5 March 27, 2012 Leveraging Information to Drive Insurer Growth In the highly competitive insurance industry, leveraging information has become a key focal point for driving

More information

ACTUARIAL CONSIDERATIONS IN THE DEVELOPMENT OF AGENT CONTINGENT COMPENSATION PROGRAMS

ACTUARIAL CONSIDERATIONS IN THE DEVELOPMENT OF AGENT CONTINGENT COMPENSATION PROGRAMS ACTUARIAL CONSIDERATIONS IN THE DEVELOPMENT OF AGENT CONTINGENT COMPENSATION PROGRAMS Contingent compensation plans are developed by insurers as a tool to provide incentives to agents to obtain certain

More information

RPM Workshop 3: Basic Ratemaking

RPM Workshop 3: Basic Ratemaking RPM Workshop 3: Basic Ratemaking Introduction to Ratemaking Relativities March 9, 2009 Mirage Hotel Las Vegas, NV Presented by: Chris Cooksey, FCAS, MAAA Nationwide Insurance Company Ain Milner, FCAS,

More information

Plugging Premium Leakage

Plugging Premium Leakage Plugging Premium Leakage Using Analytics to Prevent Underwriting Fraud WHITE PAPER SAS White Paper Table of Contents Introduction.... 1 Types of Underwriting Fraud... 1 Application Fraud/Rate Manipulation....

More information

BEFORE THE INSURANCE COMMISSIONER OF THE STATE OF CALIFORNIA

BEFORE THE INSURANCE COMMISSIONER OF THE STATE OF CALIFORNIA CALIFORNIA DEPARTMENT OF INSURANCE LEGAL DIVISION Rate Enforcement Bureau Nikki S. McKennedy, Bar No. Fremont Street st Floor San Francisco CA Telephone: -- Facsimile: -0-0 Email: Nikki.McKennedy@insurance.ca.gov

More information

Chapter 11 Auto Insurance in the United States (continued)

Chapter 11 Auto Insurance in the United States (continued) Chapter 11 Auto Insurance in the United States (continued) Overview Compensating innocent motorists who have been injured in auto accidents is an important issue for society. Private insurers are not anxious

More information

A new paradigm in P&C Industry Pricing

A new paradigm in P&C Industry Pricing The New Paradigm of Property & Casualty Insurance Pricing: Multivariate analysis and Predictive Modeling The ability to effectively price personal lines insurance policies to accurately match rate with

More information

ANNUAL STUDY OF MEDICAL MALPRACTICE INSURANCE MARKET IN ARKANSAS

ANNUAL STUDY OF MEDICAL MALPRACTICE INSURANCE MARKET IN ARKANSAS A REPORT TO THE LEGISLATIVE COUNCIL AND THE SENATE AND HOUSE COMMITTEES ON INSURANCE AND COMMERCE OF THE ARKANSAS GENERAL ASSEMBLY (AS REQUIRED BY ACT 1007 OF 2003) ANNUAL STUDY OF MEDICAL MALPRACTICE

More information

Direct Marketing of Insurance. Integration of Marketing, Pricing and Underwriting

Direct Marketing of Insurance. Integration of Marketing, Pricing and Underwriting Direct Marketing of Insurance Integration of Marketing, Pricing and Underwriting As insurers move to direct distribution and database marketing, new approaches to the business, integrating the marketing,

More information

ANNUAL STUDY OF MEDICAL MALPRACTICE INSURANCE MARKET IN ARKANSAS

ANNUAL STUDY OF MEDICAL MALPRACTICE INSURANCE MARKET IN ARKANSAS A REPORT TO THE LEGISLATIVE COUNCIL AND THE SENATE AND HOUSE COMMITTEES ON INSURANCE AND COMMERCE OF THE ARKANSAS GENERAL ASSEMBLY (AS REQUIRED BY ACT 1007 OF 2003) ANNUAL STUDY OF MEDICAL MALPRACTICE

More information

Acquire with retention in mind.

Acquire with retention in mind. White Paper A Driver of Long-Term Profitability for Personal Auto Carriers Acquire with retention in mind. Use data and analytics to help identify and attract prospects with the highest potential for long-term

More information

Insurance & Liability Breakout Session - TRB Symposium July 2015 Insuring Autonomous Vehicles Changes? Challenges? Opportunities?

Insurance & Liability Breakout Session - TRB Symposium July 2015 Insuring Autonomous Vehicles Changes? Challenges? Opportunities? Insurance & Liability Breakout Session - TRB Symposium July 2015 Insuring Autonomous Vehicles Changes? Challenges? Opportunities? 1 2 Earliest Form of Autonomous Transportation 3 More Recent Autonomous

More information

Our Future in the Driver s Seat

Our Future in the Driver s Seat February 14, 2014 * Page 1 of 7 The NAViSection System: Uniting the Champions of Safe Driving Somebody is discussing the end of driving with their mother or father today. At the same time, a national discussion

More information

ANNUAL STUDY OF MEDICAL MALPRACTICE INSURANCE MARKET IN ARKANSAS

ANNUAL STUDY OF MEDICAL MALPRACTICE INSURANCE MARKET IN ARKANSAS A REPORT TO THE LEGISLATIVE COUNCIL AND THE SENATE AND HOUSE COMMITTEES ON INSURANCE AND COMMERCE OF THE ARKANSAS GENERAL ASSEMBLY (AS REQUIRED BY ACT 1007 OF 2003) ANNUAL STUDY OF MEDICAL MALPRACTICE

More information

Pay-Drive (Usage-Based Auto Insurance)

Pay-Drive (Usage-Based Auto Insurance) Pay-Drive (Usage-Based Auto Insurance) Southern California Casualty Actuarial Club June 23, 2010 Shawna Ackerman, FCAS, MAAA Pinnacle Actuarial Resources, Inc. 1 What do the regulations allow? What was

More information

Financial Services. Uneven road ahead: Telematics poised to reshape auto insurance

Financial Services. Uneven road ahead: Telematics poised to reshape auto insurance Financial Services Uneven road ahead: Telematics poised to reshape auto insurance The broad rollout of Progressive s usage-based auto insurance, SnapShot, will come to be seen as a watershed. Snapshot

More information

Massachusetts General Law Chapter 152, 25O and 53A. Classification of risks and premiums: distribution of premiums among employers.

Massachusetts General Law Chapter 152, 25O and 53A. Classification of risks and premiums: distribution of premiums among employers. 1 A. General Massachusetts General Law Chapter 152, 25O and 53A. Classification of risks and premiums: distribution of premiums among employers. 1. Who May Insure Workers Compensation Risks Any insurance

More information

Large Account Pricing

Large Account Pricing Workshop 5: Large Account Pricing Large Account Pricing Presenter: Joshua Taub, FCAS CAS Ratemaking and Product Management Seminar March 30, 2014 Washington, D.C. 1 / 34 CAS Antitrust Notice The Casualty

More information

PUBLIC UTILITIES BOARD AUTOMOBILE INSURANCE REVIEW BACKGROUNDER

PUBLIC UTILITIES BOARD AUTOMOBILE INSURANCE REVIEW BACKGROUNDER PUBLIC UTILITIES BOARD AUTOMOBILE INSURANCE REVIEW BACKGROUNDER PUBLIC UTILITIES BOARD WHO WE ARE AND WHAT WE DO The Public Utilities Board is an independent, quasi-judicial regulatory agency. The Board

More information

At NCCI, producing and delivering

At NCCI, producing and delivering AN OVERVIEW OF DATA QUALITY by Michael B. Spears Chief Officer NCCI Holdings, Inc. ENSURING DATA QUALITY ACROSS THE WORKERS COMPENSATION INDUSTRY REPRESENTS A TREMENDOUS INVESTMENT OF TIME, RESOURCES,

More information

INSU 2500 Chapter 2. Insurance Principle. Ideally Insurable Loss Exposures. How Does an Insurance System Work

INSU 2500 Chapter 2. Insurance Principle. Ideally Insurable Loss Exposures. How Does an Insurance System Work INSU 2500 Chapter 2 August 31 Insurance Principle Since not all exposures or risks are insurable - the redistribution process must be financially feasible and sustainable over a long period of time. So

More information

Personal and Business Auto Table of Contents p. 1 of 5 Unit 1 - Introducing Auto Insurance pp. 7-41

Personal and Business Auto Table of Contents p. 1 of 5 Unit 1 - Introducing Auto Insurance pp. 7-41 Personal and Business Auto Table of Contents p. 1 of 5 Unit 1 - Introducing Auto Insurance pp. 7-41 Problems associated with auto accidents and insurance The large number of auto incidents High Cost of

More information

Protect your people and profits through driver safety

Protect your people and profits through driver safety SPIREON FLEET & ASSET INTELLIGENCE Protect your people and profits through driver safety Accidents happen. This is especially true for companies operating fleets and employing mobile workforces. In 2013,

More information

The Insurance Institute of Canada www.insuranceinstitute.ca. Ontario Automobile Insurance Textbook Addendum August 2010 (revised)

The Insurance Institute of Canada www.insuranceinstitute.ca. Ontario Automobile Insurance Textbook Addendum August 2010 (revised) The Insurance Institute of Canada www.insuranceinstitute.ca Ontario Automobile Insurance Textbook Addendum August 2010 (revised) (To be used with the 2007 edition.) Study 1, page 4, at the end of the excerpt

More information

3/21/2014. Designing a Commercial UBI Program. Disclaimer

3/21/2014. Designing a Commercial UBI Program. Disclaimer Designing a Commercial UBI Program CAS Ratemaking and Product Management Seminar, March 31, 2014 Erin Bellott, FCAS, MAAA Disclaimer The views expressed in this presentation are solely those of the author

More information

Worker's Compensation Insurance in Wisconsin THE SYSTEM, THE BENEFITS, THE COSTS A REFERENCE GUIDE FOR EMPLOYERS

Worker's Compensation Insurance in Wisconsin THE SYSTEM, THE BENEFITS, THE COSTS A REFERENCE GUIDE FOR EMPLOYERS Worker's Compensation Insurance in Wisconsin THE SYSTEM, THE BENEFITS, THE COSTS A REFERENCE GUIDE FOR EMPLOYERS This guide is intended to provide a general, non-technical explanation to help employers

More information

What is PAYDAYS Pricing and its Relationship to Usage- Based Insurance (UBI)?

What is PAYDAYS Pricing and its Relationship to Usage- Based Insurance (UBI)? Integrating Telematics into Your Business and Rating Plans: Governmental Perspective Allen Greenberg U.S. Department of Transportation Federal Highway Administration Before the Casualty Actuarial Society

More information

I-FILE Standardized Rate Indication Workbook Homeowners, Mobile Homeowners, Dwelling Fire

I-FILE Standardized Rate Indication Workbook Homeowners, Mobile Homeowners, Dwelling Fire I-FILE Standardized Rate Indication Workbook Homeowners, Mobile Homeowners, Dwelling Fire House Insurance & Banking Subcommittee January 23, 2013 Ken Ritzenthaler, Actuary Property & Casualty Product Review

More information

Personal Insurance Underwriting

Personal Insurance Underwriting Personal Insurance Underwriting 3 The Personal Lines Underwriting Process Insurance, which is sometimes referred to as a commodity or a mass-produced product, differs from retail or manufactured operations

More information

MERIT RATING IN PRIVATE PASSENGER AUTOMOBILE LIABILITY INSURANCE AND THE CALIFORNIA DRIVER RECORD STUDY

MERIT RATING IN PRIVATE PASSENGER AUTOMOBILE LIABILITY INSURANCE AND THE CALIFORNIA DRIVER RECORD STUDY MERIT RATING IN PRIVATE PASSENGER AUTOMOBILE LIABILITY INSURANCE AND THE CALIFORNIA DRIVER RECORD STUDY BY 189 FRANK HARWAYNE For a great many years individual automobile risk merit rating has existed

More information

Measuring per-mile risk for pay-as-youdrive automobile insurance. Eric Minikel CAS Ratemaking & Product Management Seminar March 20, 2012

Measuring per-mile risk for pay-as-youdrive automobile insurance. Eric Minikel CAS Ratemaking & Product Management Seminar March 20, 2012 Measuring per-mile risk for pay-as-youdrive automobile insurance Eric Minikel CAS Ratemaking & Product Management Seminar March 20, 2012 Professor Joseph Ferreira, Jr. and Eric Minikel Measuring per-mile

More information

Affordable Auto Insurance

Affordable Auto Insurance To: Nat l Ass n of Insurance Commissioners, April 30, 2009 Hearing on Credit Score Rating From: Nat l Organization for Women, Patrick Butler, Insurance Project Director Affordable Auto Insurance How it's

More information

A Deeper Look Inside Generalized Linear Models

A Deeper Look Inside Generalized Linear Models A Deeper Look Inside Generalized Linear Models University of Minnesota February 3 rd, 2012 Nathan Hubbell, FCAS Agenda Property & Casualty (P&C Insurance) in one slide The Actuarial Profession Travelers

More information

Characteristics of Commercial Lines

Characteristics of Commercial Lines GENERAL INSURANCE PRICING SEMINAR 13 JUNE 2008, LONDON PRACTICAL PRICING FOR COMMERCIAL LINES AN INTRODUCTION Martin Cross Characteristics of Commercial Lines Very wide product range Policies of widely

More information

Big Analytics unlocking Big Data

Big Analytics unlocking Big Data Big Analytics unlocking Big Data Mark Beardall, Towers Watson Fabrice Ciais, Towers Watson 26 27 September 2013, Brussels 2013 Towers Watson. All rights reserved. Agenda What is Big Data and Predictive

More information

Insurance Credit Scoring. The effect of Credit Scoring on Pricing

Insurance Credit Scoring. The effect of Credit Scoring on Pricing Insurance Credit Scoring The effect of Credit Scoring on Pricing Abstract The primary objective of every insurance company is to compare rates for insurance policies as closely as possible with the actual

More information

Workers Compensation Ratemaking An Overview

Workers Compensation Ratemaking An Overview Workers Compensation Ratemaking An Overview Insurance Company Perspective Andrew Doll, QBE Regional Insurance Company CAS 2010 Ratemaking and Product Management Seminar Chicago, Illinois - March 16, 2010

More information

THE CONSUMERS ASSOCIATION OF CANADA, SASKATCHEWAN BRANCH THE SASKATCHEWAN RATE REVIEW PANEL

THE CONSUMERS ASSOCIATION OF CANADA, SASKATCHEWAN BRANCH THE SASKATCHEWAN RATE REVIEW PANEL SUBMISSION BY THE CONSUMERS ASSOCIATION OF CANADA, SASKATCHEWAN BRANCH TO THE SASKATCHEWAN RATE REVIEW PANEL IN THE MATTER OF THE APPLICATION BY SGI/AUTO FUND TO ADJUST ITS PREMIUM RATES IN 2007 March

More information

Session 2 UBI - Telematics in Motor Insurance. David Dou, FCAS

Session 2 UBI - Telematics in Motor Insurance. David Dou, FCAS Session 2 UBI - Telematics in Motor Insurance David Dou, FCAS UBI - Telematics in Motor Insurance David Dou Co founder, Carbox November 16, 2016 UBI - Telematics in Motor Insurance Background of Telematics

More information

Surveying Commercial Insurance

Surveying Commercial Insurance Surveying Commercial Insurance Pricing and Profitability 2013 Q3 Update 2013 Towers Watson. All rights reserved. Now more than ever, price monitoring is key Exposure Uncertainty How are prices affected

More information

FINANCIAL SERVICES COMMISSION OF ONTARIO

FINANCIAL SERVICES COMMISSION OF ONTARIO FINANCIAL SERVICES COMMISSION OF ONTARIO Filing Guidelines - Major for Proposed Revisions to Automobile Insurance Rates and Risk Classification Systems A: GENERAL INFORMATION Rate and Risk Classification

More information

Arkansas Insurance Department

Arkansas Insurance Department Arkansas Insurance Department Mike Beebe Governor Jay Bradford Commissioner August 15, 2011 Via E-Mail and Messenger Mr. David Ferguson Director Bureau of Legislative Research State Capitol, Room 315 Little

More information

MARKET CONDUCT ASSESSMENT REPORT

MARKET CONDUCT ASSESSMENT REPORT MARKET CONDUCT ASSESSMENT REPORT PART 1 STATUTORY ACCIDENT BENEFITS SCHEDULE (SABS) PART 2 RATE VERIFICATION PROCESS Phase 1 (2012) Financial Services Commission of Ontario (FSCO) Market Regulation Branch

More information

Ohio Medical Malpractice Commission. Statement of James Hurley, ACAS, MAAA Chairperson, Medical Malpractice Subcommittee American Academy of Actuaries

Ohio Medical Malpractice Commission. Statement of James Hurley, ACAS, MAAA Chairperson, Medical Malpractice Subcommittee American Academy of Actuaries Ohio Medical Malpractice Commission Statement of James Hurley, ACAS, MAAA Chairperson, Medical Malpractice Subcommittee American Academy of Actuaries June 11, 2003 The American Academy of Actuaries is

More information

62nd Legislature AN ACT ALLOWING SPECIAL RISK CLASSIFICATIONS FOR PRIVATE PASSENGER AND COMMERCIAL

62nd Legislature AN ACT ALLOWING SPECIAL RISK CLASSIFICATIONS FOR PRIVATE PASSENGER AND COMMERCIAL 62nd Legislature SB0352 AN ACT ALLOWING SPECIAL RISK CLASSIFICATIONS FOR PRIVATE PASSENGER AND COMMERCIAL AUTOMOBILE POLICIES TO BE BASED ON FAVORABLE AND ADVERSE INFORMATION CONTAINED IN AN EXPERIENCE

More information

Homeowners ROE Outlook 2013 Update

Homeowners ROE Outlook 2013 Update Homeowners ROE Outlook 2013 Update Empower Results Homeowners: Improving Outlook, Growing Opportunities Aon Benfield Analytics annual review of homeowners rate changes and industry reported financial results

More information

A. Introduction. B. Legislation and Regulations

A. Introduction. B. Legislation and Regulations Underwriting Rules A. Introduction All insurers that are licensed to write automobile insurance in Ontario are required to make a filing in respect of their underwriting rules with the (FSCO). The Filing

More information

INSURANCE CONCEPTS (13)

INSURANCE CONCEPTS (13) INSURANCE CONCEPTS (13) CONTESTANT ID# START TIME END TIME Provided by the Griffith Foundation for Insurance Education TOTAL POINTS (500) Failure to adhere to any of the following rules will result in

More information

Technical Notes for Automobile Insurance Rate and Risk Classification Filings

Technical Notes for Automobile Insurance Rate and Risk Classification Filings Technical Notes for Automobile Insurance Rate and Risk Classification Filings Issued with Bulletin No. A-12/01 Property & Casualty - Auto Rate and Risk Classification Filings A. Introduction All insurers

More information

UBI-5: Usage-Based Insurance from a Regulatory Perspective

UBI-5: Usage-Based Insurance from a Regulatory Perspective UBI-5: Usage-Based Insurance from a Regulatory Perspective Carl Sornson, FCAS Managing Actuary Property/Casualty NJ Dept of Banking & Insurance 2015 CAS RPM Seminar March 10, 2015 Antitrust Notice The

More information

Auto Insurance Industry Donates $15.4 Billion

Auto Insurance Industry Donates $15.4 Billion Auto Insurance Industry Donates $15.4 Billion Premium Leakage a Significant Hit to Underwriting Profit A Report by Quality Planning November 2011 In 2010, premium leakage cost auto insurers $15.4 billion.

More information

The Allstate Corporation

The Allstate Corporation The Allstate Corporation Barclays Global Financial Services Conference Thomas J. Wilson: Chairman, President, and Chief Executive Officer September 10, 2014 Safe Harbor This presentation contains forward-looking

More information

The Insurance Score. Answers to frequently asked questions about credit-based scoring in personal lines underwriting

The Insurance Score. Answers to frequently asked questions about credit-based scoring in personal lines underwriting The Insurance Score nswers to frequently asked questions about credit-based scoring in personal lines underwriting 2001 Introduction s our society changes over time, the underwriting of personal insurance

More information

Financial Services Commission of Ontario. Technical Notes for Automobile Insurance. Rates and Risk Classification Filings

Financial Services Commission of Ontario. Technical Notes for Automobile Insurance. Rates and Risk Classification Filings Rate and Risk Classification Filings A. Introduction All insurers writing non-fleet automobile insurance on Ontario Automobile Policy (OAP) 1 or OAP 2 must have their rates and risk classification systems

More information

Enabling safer, more efficient and environmentally friendly fleets. Zurich Fleet Intelligence

Enabling safer, more efficient and environmentally friendly fleets. Zurich Fleet Intelligence Enabling safer, more efficient and environmentally friendly fleets Zurich Fleet Intelligence Zurich Fleet Intelligence: enabling safer, more efficient and environmentally friendly fleets Whether you operate

More information