What Will the Impact of this Summer’s Wildfires be on the Insurance Industry
The wildfires raging in British Columbia’s interior are just the latest in a long list of natural disasters plaguing western Canada and the western United States this summer. Climate scientists caution that this is the beginning of a new normal for the region as the jet stream moves north and brings weather more typical of the desert southwest further north. While no single event will increase premiums, says Steve Kee, a spokesman for the Insurance Bureau of Canada, “…insurers also have to look ahead and project what’s going to happen.”
Looking for guidance on how to make accurate projections in an era of uncertainty? You can find resources here.
Blockchain Could Bring Transparency to Insurance Industry
Dante Disparte, Founder and CEO of Risk Cooperative recently made a case for the insurance industry to adopt blockchain technology to drive change and improve transparency and value. Disparte argues that blockchain technology will help alleviate among other things underinsurance and areas that are currently considered uninsurable, including some natural disasters. He notes that: “In California, for example, a mere 17% of households carry earthquake insurance, despite the obvious risks and the reality that most people live paycheck-to-paycheck in the U.S. This low market penetration has as much to do with customer misperceptions of the likelihood of catastrophic events as it does with the prohibitively high costs and inefficient delivery models in the insurance industry.” Want to learn more you can find the full article here.
Developing a Better Understanding of Risk
In a period of fundamental change such as the insurance industry is experience now, how do you develop a better understanding of risk? The solution lies in not only amassing more data, but getting more accurate data into the hands of industry experts to ensure that they can develop better risk models.
Developing a single view of risk is one of the most effective ways to create better models not only for underwriting, but also to ensure regulatory compliance. Richard A. Ward, Strategic Consulting, Digital Commerce Solutions, at Pitney Bowes shares that “Attaining an enterprise-wide view of operational risk, the “common version of the truth,” is the next challenge that will drive differentiation and competitive advantage based on better decision-making, greater responsiveness, and superior execution.” You can find more of Richard’s insights here.
