APCIA unveils ‘Insuring What Matters Most’ campaign

David Sampson, president and chief executive officer of the American Property Casualty Insurance Association (APCIA) has formally unveiled the organisation’s new campaign, “Insuring What Matters Most”, during its Annual Meeting in Denver, Colorado.

The proactive reputational campaign will highlight the industry’s record of delivering on promises to policyholders and its contribution to the US economy.

“Property/casualty companies and products are critical to protecting individuals, families, communities, and businesses,” Sampson said. “We are financially empowering consumers with the tools to protect the things that matter most to them. Because that’s what matters most to us.

“Not only are we there for our policyholders during extraordinary circumstances and natural catastrophes, we are working every day to keep families and communities safer through investing in and proactively promoting better roads, safer vehicles, stronger infrastructure, and increasing resilience across the country.

“APCIA’s ‘Insuring What Matters Most’ campaign highlights the industry’s positive impact and demonstrates our value proposition as an industry.”

Sampson highlighted that the property/casualty industry’s overall contribution to the US economy includes that property/casualty insurers: · Protect more than 221 million vehicles and 85 million households; · Invest more than $292 billion in bonds that improve state and local communities across the country; and · Will deploy $447 billion to pay 2020 claims and fulfil promises made to individuals, families, and businesses.

Click here to view APCIA’s campaign video.

Image courtesy of shutterstock.com / corlaffra

APCIA whitepaper details driving rating factors

“If you are a low-risk driver, you shouldn’t have to subsidise insurance rates for high-risk drivers.” Robert Gordon, APCIA

On November 1 APCIA released a new whitepaper, “Behavioral Validation of Auto Insurance Rating Variables”, which highlights how many of the most commonly used driving rating factors are related to driving behaviours and the risk of loss.

The paper notes that, since the first auto insurance policies were sold nearly 125 years and trillions of miles ago, auto insurance pricing and underwriting has continuously evolved to reflect the countless innovations in motor vehicle technology and design, as well as changes in road and traffic management infrastructure, driving patterns, and behaviour.

These innovations continue to evolve today: telematics, which allows insurers to collect driver behaviours in real time, represents one of the more recent developments in automobile insurance underwriting and pricing.

“Because the population of drivers is large and diverse, the best—and fairest—way to manage the inherent complexity and uncertainty associated with auto insurance pricing is to use a large combination of actuarially sound and independently predictive rating variables,” said Robert Hartwig, author of the paper and clinical associate professor of finance, risk management & insurance at the Darla Moore School of Business, University of South Carolina.

The most commonly used rating factors have been in use for decades because they have proved to be highly predictive of future losses. These factors fall into four major categories: (i) policy attributes; (ii) driver characteristics; (iii) driving environment; and (iv) vehicle characteristics.

“Insurers want to make the most accurate risk assessment of each driver and the use of highly accurate and predictive data helps to achieve that goal,” said Robert Gordon, APCIA’s senior vice president, policy, research, and international.

“If you are a low-risk driver, you shouldn’t have to subsidise insurance rates for high-risk drivers. Those who pose a greater statistical risk should pay more than those who pose a smaller risk.

“Additionally, we want our products to be affordable and accessible to the largest possible number of people. That starts by doing what’s fair, which is using a large combination of accurate variables that help predict risk.

“In this way insurers maximise pricing accuracy and assure that no single rating variable has a disproportionate impact on an individual’s premium. This approach to pricing allows insurers to offer their products to a broader range of consumers and to include incentives that promote safe and responsible driving behaviour.”

The full report can be found here

Image courtesy of shutterstock.com / Gorodenkoff

Industry has important role in enabling climate action

“What is far less recognised is the amount of expertise, data, and resource within the industry.” Amy Barnes, Marsh

The insurance industry is well placed to play an important role in enabling climate action and supporting change, but the key to achieving this will be its ability to be innovative and to respond to innovation, Amy Barnes, head of sustainability and climate change strategy, Marsh, has written in a blog in the context of the COP26 climate change conference in Glasgow.

“Ahead of COP26, the insurance industry has been carving out the role it will play in enabling climate action and supporting change,” Barnes wrote.

“The insurance industry is well positioned to be a key facilitator of the four COP26 goals. There are a number of initiatives in place and being established to support the industry’s role in supporting the COP26 targets. The key to the insurance industry’s support, however, is its ability to be innovative and to respond to innovation.”

COP26 is a global United Nations summit about climate change. It is the 26th meeting of the “Conference of the Parties” and is attended by countries that have signed the UN Framework Convention on Climate Change, a treaty agreed in 1994.

Barnes wrote that for actions agreed at COP26 to become a reality, support from industries like the insurance sector will be required.

“The insurance industry’s legacy of helping communities and sectors build resilience against disasters is well known. What is far less recognised is the amount of expertise, data, and resource within the industry. These are key building blocks for creating innovative products and solutions that support climate action.

“These building blocks can support the further development of risk-sharing mechanisms that underpin the climate-related efforts of developing countries.

“The Insurance Development Forum (IDF), launched at COP21 in Paris, highlights the critical role that risk management and resilience play in climate action,” she wrote.

Read more here

Image courtesy of shutterstock.com / elRoce