Insurance claims are escalating, and while inflation is often cited as the primary cause, it’s not the only factor at play.

Underwriting presents considerable challenges, requiring a balance between reliance on empirical data and the ability to predict future events. This is particularly true in property and casualty insurance, where foreseeing the future is exceptionally difficult.

It’s a misconception that events like wildfires or extreme weather conditions need to occur in the same place. Factors such as global warming, natural phenomena, and human actions are gradually shifting the landscape. Therefore, insurers must be creative and proactive in augmenting data and predicting potential scenarios to “Insure Right” in these evolving environments.

Prioritizing preventive actions is crucial, and insurers should lead these initiatives. With InsurTech and insurance software companies striving to become insurers themselves, the industry faces fierce competition. In this competitive insurance market landscape, It’s imperative for insurers to be innovative and take preventive steps, not merely as a preference but as a mandate, to deliver tangible benefits to policyholders. In fact this would insulate the Insurers from loss ratio

Some insurers, however, focus solely on empirical data, which only tells half the story. Betting on the wrong side could lead to significant losses for both insurers and policyholders.

#insurance #underwriting #insurtech #insuranceinnovation