The Risks of Hazard

As I have studied underwriting natural catastrophe, one of the more interesting things I’ve learned is that it’s widely done with software built for something else: accumulation. Even though many accumulation solutions (including some cat models) offer an underwriting function, it is not suited to the actual task of underwriting.

Last week I took a look at the Top 5 Risks of Hazard articles from 2015. Today, here is a look at the Top 5 Accomplishments of InsitePro^™, the risk assessment software we are building here when not writing blog posts.

5. API connectivity. Insurance software is slowly but surely moving towards interconnectivity between disparate systems and software packages. Not everything is in the cloud (yet), but almost all insurance systems are able to integrate analytics and datasets. InsitePro fits this type of environment with its full suite of APIs and web services, plus it is based in the cloud and waiting for the industry to realize the benefits there.

With 2015 now firmly in the past, I am seeing a lot of blogs with 2015 Top 5 lists. As with all good ideas, it needs to be copied assimilated. Today, I am counting down the Top 5 articles from last year based on viewership.

Without any ado at all, here are the Top 5 Risks of Hazard episodes from 2015:

5. Is Disruption Really Coming to Insurance? In October I attended a conference in San Francisco exploring how insurance was about to be disrupted. I wrote this post afterwards, being unconvinced. Meanwhile, a nice debate about it has popped up at ITL, here and here.

The Internet of Things (or the IoT) is a real boon for technology bloggers, and it is time Risks of Hazard took a look at it. First, some background: here’s what the IoT is, how it works, why it’s not everywhere yet, its impact on insurance, and how it threatens the insurance industry (!). But there is not much about the IoT and natural catastrophe risk out there yet, presumably because they are not really related…

False. The IoT and natural catastrophe risk assessment have one thing very much in common: the importance of location.

This week saw the House Financial Services housing subcommittee receiving comments on H.R. 2901, the bill introduced last June to recognize private flood insurance as adequate to satisfy FEMA’s mandatory purchase requirements. Or, to paraphrase: “Legalize Cherry Picking!”

AM Best reported on the hearing on January 15 (mind the subscription wall), and, to my delight, they use the term “cherry picking.” While it’s a perfect name for the act of underwriting the best properties in the compulsive purchase NFHA, I hadn’t seen it in reputable media until now (except for Insurance Thought Leadership, where Nick Lamparelli and I put it).