AAIS last week announced the formation
of an "AAISalliance" of service vendors to provide
underwriting, marketing, and loss control resources for
property/casualty insurers. The announcement was made by
AAIS President Paul Baiocchi in remarks to the AAIS Main
Event executive conference in Fort Myers, Fla.
In addition to AAIS, the alliance to
date includes four other organizations that will remain
independent but provide AAIS member companies with
information services under arrangements with AAIS:
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e2Value,
Stamford, Conn., which provides automated online
construction cost valuation applications for
residential, commercial, and farm buildings;
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MarketStance,
Middletown, Conn., which conducts research on market
segments and helps insurers develop solutions for
challenges in underwriting, marketing, and distribution;
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Overland Solutions, Inc. (OSI), Overland Park, Kan.,
which provides premium audit, risk inspection, loss
control, and valuation services; and
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RiskMeter, Middletown, Conn., which provides desktop
matching software for determining a risk's proximity to
natural hazards, as well as other information.
"We have designed this alliance
partnership to bring together resources for AAIS member
companies," Baiocchi said. "This initiative is in line with
the AAIS mission to help companies compete in the market."
Services from e2Value and RiskMeter are
already available to AAIS member companies that use the
AAISdirect Internet service; services from MarketStance and
OSI will be added in the coming weeks.
AAIS
announced last week that, in July 2010, it expects to conclude
testing and begin countrywide filing of a new by-peril rating
plan available under its Homeowners Program.
By-peril rating allows insurers to rate
policies more accurately, based on the particular loss exposures
of each risk. AAIS's new plan will be offered as an option to
companies using the AAIS Homeowners Program, which will also
include a traditional consolidated rating plan.
The AAIS by-peril rating plan will allow
users to rate homeowners policies on the basis of 10 causes of
loss, half of them derived from catastrophe exposure and half
reflecting "non-cat" exposures.
Deborah Summerlin, AAIS vice president of
insurance lines, told attendees at the AAIS Main Event that a
plan that accommodates 10 causes of loss ensures that
significant loss factors in different states are adequately
reflected in the rating of a policy.
The plan utilizes a single rating algorithm
for all perils, making it relatively simple to incorporate into
company operations, and companies can simplify the plan further
by reducing the number of perils, Summerlin added.
AAIS's by-peril rating plan follows several
months of thorough analysis of potential rating variables to
identify those found to be predictive of loss. In that process,
AAIS actuaries utilized the "Pretium" statistical software
platform developed by Towers Watson, the international actuarial
consulting firm.
AAIS President Paul Baiocchi added that, "We
are providing our affiliates and potential new affiliates with a
very powerful tool in a very cost-effective manner."
Property/casualty insurers will have access to an expanded array
of risk-related data and tools to analyze that data under a new
program announced by AAIS at the Main Event.
Under an initiative announced by AAIS
President Paul Baiocchi, AAIS is establishing a "Data Resource
Center" that will allow its member companies to access its
traditional premium and loss data, plus geographic, demographic,
weather, crime, and other types of data collected from public
and private sources.
In addition, the center will provide AAIS
affiliated companies with analytical tools for mining the data
and identifying relationships that correspond to risk of loss,
and for developing rating variables based on those
relationships.
"Data should be an industry resource
deployed to maintain a competitive marketplace," said Baiocchi
in his announcement. To that end, Baiocchi urged all carriers to
submit their statistical data to AAIS, whose statistical
database already has records on $10 billion in annual direct
written premium.
"Our industry will benefit from having
multiple repositories of ratemaking data," he said.
For information on reporting statistical
data to AAIS, contact Janice Nieman, director of technical
product support, at
janicen@AAISonline.com, or by calling 800-564-AAIS, ext.
223.
AAIS is teaming up with The Hartford
Steam Boiler Inspection & Insurance Company (HSB) to provide
a free breakfast forum on "Equipment Breakdown in
Construction" on the final morning of the annual meeting
of the Inland Marine Underwriters Association (IMUA).
The event will be 8-10 a.m. on Wednesday, May
19, at the Kingsmill Resort, Williamsburg, Va., the site of the
IMUA meeting.
Lisa Phillips, HSB product design
manager, will discuss how to identify and underwrite equipment
breakdown exposures on jobsites.
Robert Guevara, AAIS vice president of inland marine,
will describe new equipment breakdown coverage forms developed
in consultation with
HSB for the Builders Risk and Installation Floater classes found
in the AAIS Inland Marine Guide.
Attendance is free of charge to all IMUA
members; breakfast will be provided. To reserve a spot, contact
Sheila Morris, AAIS manager of inland marine, at
sheilam@AAISonline.com,
or by calling 800-564-AAIS, ext. 286.
The latest entry in
AAIS's series of
"Emerging Issues and Exposures" reports is a report on
"Insuring Historic Buildings," written by Kirk Hansen, AAIS
director of education.
The report clarifies the distinction between
federal tax credits for buildings determined to be of historical
significance, and for commercial buildings built before 1936,
whether historically significant or not.
The report explains the application of
standard policy provisions to common losses incurred by older
structures, and references the new "Historic Preservation Tax
Credit Coverage" recently introduced in the AAIS Inland Marine
Guide, and reported in a previous Advisory.
For information on AAIS educational
resources, contact Kirk at
kirkh@AAISonline.com, or by calling 800-564-AAIS, ext. 247.
