This post is part of a series sponsored by AgentSync.
As the property and casualty insurance market struggles to find equilibrium, insurers and reinsurers are rethinking their approach to risk and markets. As a Floridian myself, I love watching reinsurance companies reduce capacity and raise rates, followed by Florida insurance companies reducing product offerings, limiting coverage, and exiting the market altogether. , this is my personal opinion.
The homeowners insurance business will not be able to continue business as usual for years to come, as the industry will have to get creative in properly assessing risk at the individual property level. The future of non-life insurance belongs to airlines that find innovative ways to meet consumers at the midpoint, with affordable premiums, adequate coverage, and personal property risk mitigation investments for the perils they face in their locations. It will be. Examples of risk-mitigating investments include constructing concrete block homes versus stick-frame homes, installing hurricane-rated doors and windows, and hipped roofs designed to minimize roof uplift from winds during storms. selection, etc. Like I said, as a Florida homeowner, it’s personal.homeowner need Affordable insurance and carriers need We make money by underwriting homeowners’ products to offset insurance claims.
10 years in roles helping insurance and reinsurance companies implement digital transformation, innovate new products, and find new industry use cases for Internet of Things (IoT) devices and cutting-edge solutions. After that, I’m sure the following trends are part of it. What’s next?
1. Parametric Consumer Homeowner Coverage
As companies consider their addressable markets, there are currently significant populations in risk-prone areas in Florida and across the country where consumer demand and ability to pay premiums are not compatible. There is. I think carriers can meet this challenge by moving away from the idea that the only solution for most consumers is a traditional HO-3 homeowner policy.
Instead, I’m interested in seeing what carriers discover as they test consumer demand for parametric coverage as a supplement or alternative to HO-3 policies. In such cases, using parametric coverage may reduce the amount of traditional his HO-3 policy. But frankly, they could also offer consumers more choice and accommodate consumers by address (rather than zip code) where the risk exists. Because this is where risk appetite and demand meet. Parametric insurance pays out automatically when conditions such as wind speed, rainfall, etc. exceed pre-agreed thresholds.
We want national insurance companies to return to the states they are leaving for healthy, competitive insurance markets.by providing parametric insurance As in some municipalities, carriers offer consumers changes to the risk profile of traditional HO-3 insurance as additional elective or separate insurance to meet risk needs not met by indemnity-based insurance. We can offer you potential insurance coverage options. This could be beneficial to both consumers and insurers.
Parametric coverage also allows insurers and reinsurers to create more competition in the market, bring insurers back into markets where they have exited or stopped new business, welcome new insurers into the market, and provide peace of mind to homeowners. We can partner with you to provide products that can give you the following.
2. New device-based, sensor-based risk mitigation
Alongside the adoption of parametrics is a very novel use of device-based risk mitigation policies. I think we are just beginning to see the applications of today’s technology. Vendors in the market offer different types of forecast and forensic weather data for hazards such as hail, lightning, and wind data. Dual-pole radar technology and sensor data make weather reporting better than ever, and specialized data helps carriers develop more innovative products.
However, IoT devices not only innovate products, but also help carriers and consumers share responsibility for risk mitigation. Sensors that measure water temperature and pressure can detect leaks or frozen pipes before damage occurs, allowing homeowners to avoid the need for insurance claims.
At the commercial level, carriers work with companies to install sensors and cameras throughout manufacturing facilities and factories to detect equipment deterioration or changes in the environment that can impact the performance of machinery or end products. . The technology exists and continues to get better and better. Making data more accessible could enable carriers to leverage better data and be more creative with risk.
3. Individual risk assessment
Device-based risk mitigation enables more personalized risk assessments as part of the path to more affordable insurance.
Car insurance companies are already pursuing this with phone apps and car parts that judge your driving and assign you risk based on your habits and actions. However, individualized risk assessments can be a driving force in reducing both personal and organizational risks, especially in states with high general risks to weather events.
In Florida, for example, many real estate developers continue to build wooden houses and apartment buildings. From a construction point of view, these houses are very vulnerable. Constructing concrete block homes is much more expensive, but those who do so know that their home will withstand severe weather events.
This also applies to areas prone to fire hazards. The deadly Marshall Fire in Colorado has left some areas where airlines are reluctant to provide coverage. However, using postcode criteria to assess risk is outdated. Some homes and neighborhoods were unaffected by the fire as homeowners associations and individuals took steps to put their properties out of harm’s way.
For many homeowners, activities such as landscaping and brush removal are considered very incidental to their property. But we know these are far from that.Trim bushes and plant shrubbery and trees away The risk of fire from your home is clearly related to the risk of fire in your home. As long as carriers price this risk based on zip code, these tasks will seem like a chore, something that can be deferred until “another time.” But if your personal property coverage includes them, these elements of homeownership can become mandatory maintenance. These changes reduce risks for carriers and costs for consumers, ultimately increasing overall market resilience.
Moving to the future
In addition to being a Strategic Account Executive at AgentSync, I own a home in Florida and maintain a real estate license in Florida. Therefore, I am very aware of the growing trend of homeowners choosing to self-insure.
But even this only gives some people an option to offset the risk. For most people, this means taking on virtually unlimited and unmitigated risk. There is growing concern across the industry that consumer uninsured and underinsured rates will worsen, not just in Florida but across the nation. By offering consumers more personalized homeowners insurance options that adjust risk exposure and premiums by property location, carriers can expand their policyholder base while limiting risk for themselves and their customers. You can be in a good position to expand.
