Underwriting motor and household risks in a time of crisis
Based on the information being received by the Insurance industry there can be no doubt that we are in the midst of some very challenging times.
“The insurance industry is operating in the worst economic downturn in decades which has led not only to a major reappraisal of key risks but also to a concern that the industry was not as well placed to deal with them as it once thought. Responding to these challenges and embedding good risk management practice across organizations is critical if the industry is to emerge from this cycle in a better position,”
Source: BUSINESS DAY 26/3/09
Underwriting departments are being called to account for the way in which certain risks, in particular, motor and house holders risks, are being underwritten. A far more focused approached is being implemented by insurers worldwide. Statistics from Asset Management Solutions (previously Malachi Enterprises), the largest independent inspections company in South Africa, has brought to light some significant information.
Of 1000 house hold contents surveys done this year 88% of people have been under insured by 25% or more. In this economic climate, it is particularly unfortunate for two reasons. First, it leaves the client open to being under compensated when he does submit his claim and secondly it is a vastly untapped income for insurers. The days of writing insurance business purely for volumes sake, with little regard for the risk, must surely be gone.
Bernd Veening, CEO of AMS says, “The value of insurers inspecting both the motor and house hold contents as part of their underwriting criteria has been well established. Getting the operational elements in place as a convenient service offering to the policy holder however, is far more challenging.”
This is where AMS has been able to add great value. With the credibility of 10 years behind them they have established themselves as the market leaders.
AMS CEO, Bernd says, “For Insurers that have taken this element of their risk management seriously there are very clear financial as well as client service benefits. Recently, one of South Africa’s leading Insurers completed an in depth analysis of some 65000 vehicle inspections. The results, based on the claims history of these risks, showed an exceptional propensity for claims cost reduction, however, just as significant is our own client survey feedback showing Insurers the clear benefits the mobile service adds to the insurance sales input. A full 94% of clients felt more positive about their insurers when offered a mobile service”.
Considering the competitive nature of short term insurance, Insurers could well use a focused, more convenient approach to their underwriting systems. AMS offers this as their core business and welcomes all enquiries for an evaluation of these services.
Asset Management Solutions
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