Connecting the Business & Technology Communities
November 2011

Are Multiple-CAT Model Methodologies Too Risky?

Policy Administration Systems

As all manner of natural calamities wreak havoc around the globe and batter balance sheets across the insurance industry, the issue of how insurers model for catastrophes is coming under increased scrutiny from regulators and rating firms.

While still relying on the “Big Three” catastrophe modeling firms for help, insurers such as Allianz, Farmers and Zurich are increasingly looking to blend output from disparate models or augment them with data culled from a variety of internal and external sources. Yet, when it comes to catastrophe models, more is not necessarily better. Indeed, employing a multi-model/data approach is replete with risks of its own, such as the chance that the models will offer contradictory results. Thus, insurers need to remain cognizant of the strengths and weaknesses of competing models to ensure maximum efficacy.

page 16
7 Must-Haves
Erie’s Scientific Approach
to Customer Experience

Shifts in technolo�y and consumer preference are forcing insurers to interact directly with their customers on a more intimate and constant basis. To meet this need, some insurers, including Erie Insurance, are turning to a new scientific approach called user-centered design methodolo�y, which provides deeper insight into customer satisfaction.

Yet, as Erie Insurance’s director of user experience, Richard Warnaka, found out, this methodolo�y can present challenges. But, he and his team took some smart steps to avoid the pitfalls.

In an INN interview, Warnaka discusses his line of attack, from analysis, design and usability testing to his ability to marshal the resources and quantify the results.

DISTRACTED DRIVING
Insurers Use Technolo�y
to Take the Wheel
page 19

Insurance industry research estimates 40 percent of claims are a result of crashes due to distracted driving. And, with more than 70 million Americans now owning smartphones, the issue has become a major concern among property/casualty insurers.

While technolo�y certainly helped create the problem, it can now play a vital role in helping to solve it. For example, telematics and a number of new GPS technologies now are available to assist insurers seeking to enforce compliance to distracted driving policies.