Regulators Consider New Underwriting Approach at Chicago Seminar

New underwriting data that insurers are expected to start using in 2007, along with new computer modeling techniques, will be presented at a national workshop on urban and multicultural markets Nov. 9 in Chicago.

Texas Insurance Commissioner Mike Geeslin, Pennsylvania Insurance Commissioner M. Diane Koken, and Illinois Insurance Director Michael T. McRaith will comment on new underwriting trends at the sixth annual Urban Insurance Advantage workshop, sponsored by the Urban Insurance Partners Institute (UIPI), a nonprofit educational resource for the insurance industry, based in Chicago.

“We are seeing more interest from insurers in new types of data and predictive modeling,” notes Pennsylvania Commissioner Diane Koken. “Regulators want to know if this approach will enable insurers to underwrite more accurately and help expand their underwriting capabilities, and how it will impact consumers.”

The UIPI workshop will feature presentations on the new predictive modeling technique, and additional data sources to be used in an underwriting study now underway. The study offers personal lines companies a confidential analysis, using newly available underwriting data that was first developed by the banking industry. The study also applies an array of non-financial data that could offer insurers more detailed risk profiles for traditional markets consumers and, in particular, urban and multicultural consumers.

According to UIPI, some of this data already has proven to be predictive in preliminary tests, and insurers are expected to start using the information in 2007 underwriting.

Robin Newberger, business economist at the Federal Reserve Bank of Chicago, also will present research the bank recently co-authored with The Brookings Institution. Newberger notes that immigrants are just as likely to live in suburbs as in cities. Mainstream financial services companies are adapting, according to Newberger, with new products and services for this growing and increasingly affluent market. She will outline key developments that are likely to transform both traditional suburban markets and urban markets.

“We appreciate the willingness of regulators to participate in these discussions,” says Meg Rosthal, assistant vice president and associate general counsel for Erie Insurance Group. “This workshop is an important step in promoting innovation, and we hope it will foster a more vibrant insurance market.”

Several other topics and speakers will be featured at the one-day workshop, which has been awarded five CPCU continuing professional development credits. For more information on the study, or the Urban Insurance Advantage workshop and registration, please visit www.uipi.org or call Suzanne Reade at (773) 880-8780.

Source: Urban Insurance Partners Institute

Topics Underwriting