Carriers Don’t Inform Agents of Predictive Loss Modeling

By | April 5, 2014

Property/casualty insurers are making sweeping changes in their loss prediction practices, increasing the use of computer modeling programs in every line of business.  But less than half of the companies inform their agents of these changes in a timely manner.  This, in a new survey from Towers Watson.

“That could be a major problem for agents, said Klayton Southwood, senior consultant with Towers Watson and a co-author on the report.”

[Editorial comment:  Mr. Klayton is absolutely correct.  It becomes a very big problem for an agent to be told suddenly that his ‘old reliable’ insurance carrier will no longer renew a line of business the agent has written for years; forcing the agent to find a replacing company, too often on short notice.  A current example is the industry trend away from writing small employer Worker Compensation insurance as standard business.  We can debate the validity of using emotionless computer models all day, but at the end of that day the result is often an upset agent and a very upset client!]