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October 5, 2012
News for property casualty insurers

  Top Story 
  • P/C industry expects insurance fraud costs to increase, report says
    More than half of personal lines insurers said they expect losses from fraud in personal property, workers' compensation and auto insurance to increase this year, according to a report from PCI and FICO. In fighting fraud, predictive analytics was described by 45% of carriers as having the greatest effect. "It is clear insurers understand the scope of the insurance fraud problem and are taking steps to reduce it," PCI's Robert Passmore said. "However, we also want that the public and policymakers to recognize that consumers are paying what amounts to a 'fraud tax' that is far too expensive for hard-working citizens." Insurance Networking News (10/4), InsuranceTech.com (10/4) LinkedInFacebookTwitterEmail this Story
  • U.S. insurers anticipate greater fraud losses in 2012: According to a FICO and PCI insurance fraud survey, 54% of U.S. insurers surveyed anticipate personal lines insurance fraud losses to rise in 2012. Read more. LinkedInFacebookTwitterEmail this Story
  Industry News 
  • Report: Net income rose 245% in the first half for P/C insurers
    Property/casualty insurers' net income increased 245% to $16.4 billion year-over-year for the first half as a result of premium growth and lower catastrophe losses, according to a report from PCI, ISO and the Insurance Information Institute. Insurers must have strong underwriting results because their "overall rate of return remains subpar compared with long-term historical norms," ISO's Michael Murray said. "Despite challenging economic conditions, insurers are strong, well-capitalized and well-prepared to pay future claims. Policyholders and regulators can rely on the insurance industry to fulfill its obligations when catastrophes strike," PCI's Robert Gordon said. PropertyCasualty360 (10/4) LinkedInFacebookTwitterEmail this Story
  • Execs: Challenges remain for insurers despite lower disaster losses
    Although the property/casualty insurance industry incurred relatively low catastrophe losses in the first half of the year, insurers continue to face challenges, including weak investment returns, according to executives. Although property insurance rates increased after major catastrophes last year, insurers "still did not see a lot of upward lift," said Alastair Swift of Willis. If the industry experiences "a major catastrophic event in the next couple of months, we can expect to see a spike in the market, but not a hard market," Swift said. PropertyCasualty360 (10/4) LinkedInFacebookTwitterEmail this Story
  • Study: P/C insurers' use of analytics puts more focus on customers
    Property/casualty insurers are using analytics to better understand policyholders' needs, according to a study by Strategy Meets Action. Insurers have shifted from a risk-centered strategy to a customer-centric approach, said Mark Breading, the study's author. "The analytics have come along with that approach. Insurers are trying to be more sophisticated in the way they do customer segmentation, the way they understand customer needs and use that knowledge to design products, and the way they serve customers," Breading said. PropertyCasualty360 (10/4) LinkedInFacebookTwitterEmail this Story
  • Study: Firms need a "robust" strategy to curb reputation risk
    A reputation crisis poses an 80% chance for an organization to lose 20% of its value in one month during a five-year time frame, according to a report from Oxford Metrica. "Having a robust, evidence-based reputation strategy in place will minimize the likelihood of a critical event turning into a reputation crisis and will maximize the probability of recovery," according to the report, which was sponsored by Aon. "Probably the first takeaway is how prevalent reputational events are. It's not something that's rare. Over five years, it's quite likely," said Randy Nornes of Aon Risk Solutions. Business Insurance (tiered subscription model) (10/4) LinkedInFacebookTwitterEmail this Story
  • Other News
  Catastrophic Risk 
  • Report: Government must find new funding for flood protection
    The federal government must discover new funding sources for operating and maintaining levees and other flood-protection infrastructure to keep the structures from deteriorating, according to a study by the National Research Council of the National Academy of Sciences. The government should consider initiatives such as seeking more private funding to improve the infrastructure, the report said. The Army Corps of Engineers also should pursue other flood-control strategies instead of building new levees to mitigate risk, the report added. The Times-Picayune (New Orleans) (10/4) LinkedInFacebookTwitterEmail this Story
  • Other News
  Policy and Law 
  • Expert: Insurers should work with IAIS on proposed regulations
    The insurance industry needs to work closely with the International Association of Insurance Supervisors in preventing potentially overreaching rules in the proposed Common Framework for the Supervision of Internationally Active Insurance Groups and other regulations, PCI President and CEO David Sampson said. "What's troubling in recent years is global standards that are set by unelected, unaccountable bodies," Sampson said. "What is at stake for [the] U.S. marketplace if we go blindly down this road [with rules] that are not suited for U.S. marketplace -- I think this is very troubling. This is a highly competitive marketplace," he added. PropertyCasualty360 (10/4) LinkedInFacebookTwitterEmail this Story
  SmartQuote 
The lure of the distant and the difficult is deceptive. The great opportunity is where you are."
--John Burroughs,
American naturalist and essayist


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