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JimF
USA
1014 Posts |
 Posted - 01/25/2004 : 00:56:51
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MS/B (IntegriClaim) has absolutely nothing, I repeat NOTHING, to do with insurance premium rate structures.
Premium rating is generally based on a state by state loss experience with historical loss data submitted to individual state regulators (rate approval authorities) by the ISO (Insurance Services Office).
Where are you finding insurance premiums used on an individual zip code basis as opposed to a statewide approved insurance premium rate?
Insurance premiums are determined (go up or down as you say) by the total of all loss experiences to loss exposure without regard to individual component pricing, or for that matter, whether O & P is included in those loss exposure payments.
It is the total values of losses as measured in dollars for individual lines of coverage as well as mean, median and modal costs measured against loss exposures which provide a portion of the data necessary for the carrier to determine profitability and the rate makers to determine fairness in setting an appropriate premium rate. And again, IntegriClaim does not enter into that equation nor have the slightest bearing on premium determinations in any way, shape, form or fashion.
I don't know what your beef is with IntegriClaim but you're way off the mark in your understanding of insurance premium rate making. |
Edited by - JimF on 01/25/2004 01:05:56 |
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Reconstruction Man
124 Posts |
Posted - 01/25/2004 : 00:58:26
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Well, we know what we know...and I personally am allergic to straw.
Is this a cognitive skill fishing expedition?
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JimF
USA
1014 Posts |
Posted - 01/25/2004 : 01:07:30
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Again, I fail to understand your point and am reasonably sure most others here do as well.
What is it exactly you are trying to say or the precise point you're trying to make? |
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Reconstruction Man
124 Posts |
Posted - 01/25/2004 : 01:19:27
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Not according to MS/B. Their main sales points are on claim severity control and better agent / insurer / underwriter premium rate results based on "real time" indemnity values based on zip code based component pricing. Accounting for actual physical construction material and labor, etc. verses s.f. based construction values = a more reliable premium.
"Premium rating is generally based on a state by state loss experience with historical loss [reconstructed stuff costs included] data submitted to individual state regulators"...MS/B' historical [construction / reconstruction component] data carries to regulators / ISO via the insurance industry and others data.
Through personal conversations with TDI's actuarial dept., and others, we have a pretty good idea of how the actuarial / statistical / enviromental / social / financial indemnity risk spead process works.
The IntegriClaim program is quite impressive...in theory...we are interested in a 3-5 year study. |
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JimF
USA
1014 Posts |
Posted - 01/25/2004 : 01:29:22
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Again, your lack of understanding of the premium rate making process is astounding given your accusations and indictment of this industry.
Rate making is based on the total costs incurred by all carriers within a state based on all loss experiences to all loss exposures from data compiled from each carrier within that state by ISO. The ISO data simply is the total value (as measured in dollars) of all losses (by line) divided by the total number of losses (by line) within that state.
The cost data submitted by ISO does not include component pricing breakdowns, nor does it include whether an indemnity payment included O & P. Quite simply it shows the Total $ value of losses and the average $ value of losses compared to the indemnity loading of the average and total premiums within that line within that state.
If you really want to talk authoritatively about this topic, it would serve you well to do a little more research and read an authoritative text on how rate making really works. Otherwise, you will come across to those who do know, as ill and misinformed.
And as one who does understand both the concepts and methodology of insurance premium ratemaking, I can assure you that IntegriClaim has absolutely nothing to do with premiums or premium rate making in any state in the United States. None. Nada. Zip. And to suggest otherwise is sadly, to exhibit your own ignorance and naivety.
Follow your trail if you will and at your own wasteful peril, but I suggest you will have a much better chance of finding a whale in the Great Salt Lake before you ever prove any nexus between insurance premiums and IntegriClaim. It simply doesn't exist nor is it there. |
Edited by - JimF on 01/25/2004 01:42:31 |
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Reconstruction Man
124 Posts |
Posted - 01/25/2004 : 01:43:12
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Well, perhaps we have totally misunderstood that historical losses mean, in part, reconstructed stuff. We feel the whole premium establishing process and final yearly P&L statements all kinda' come together by adjusting processes and finished project costs being major concerns to insurers and underwritters, DOI's etc. Guess we got that all wrong.
But then again...
Marshall & Swift/Boeckh Combines Technology/Analysis
Even though many property claims are similar, they are not scoped and settled in the same ways. MS/B research shows that the average homeowners' property claim is settled for $3,250. Some adjusters would settle the same claim for $2,900 and others for $3,400. What causes the difference in severity?
The answers come from MS/B Analytics, a unique service that combines technology and expert analysis to maximize control over claims severity and enhance claims, underwriting, and actuarial decision-making. MS/B has the ability to study more than just summaries of line items and claim totals. MS/B's team of claims professionals and analysts use multi-dimensional data mining of real claims files to identify property severity drivers and the actions that can positively affect bottom-line results while maintaining fair indemnity payout.
MS/B Analytics compares settled property claims data and performs a variety of analyses. The process identifies the core drivers of productivity and severity by comparing companies, vendors, and the industry as a whole. As a result, clients have access to trends in adjuster behavior, cost data overrides, use of material and labor, depreciation application, lump sum usage, overhead and profit calculations, and more. Data is also measured for best practices and is measured against best practices, looking for claims severity drivers in specific areas.
The data that drives MS/B Analytics comes from property claims reported in IntegriClaim™ and the IntegriClaim Administrator™ property field estimating, database and management technology. IntegriClaim collects over 1,900 pieces of information about every claim and tracks over 30,000 construction line items. With this level of material and labor cost detail, MS/B Analytics has the ability to create dozens of reports such as severity by Coverage A limit, claims distribution by peril, cost data overrides and write-ins, overhead and profit, and an unlimited number of special reports as required by each carrier.
"Within 90 days we identify many of the key issues that impact the client's P & L," said Jonathan Kost, manager of MS/B Analytics, "and each client has a list of business initiatives to implement. If they are implemented, insurance carriers will see substantial improvements in the Combined Ratio - as much as 5 points or more."
Independent adjusting firms (IA's) are also a crucial part of a carrier's P & L. IA's who use MS/B Analytics to analyze, monitor, and improve their own claims processes provide substantial, measurable value to carriers, value that sets them apart from other IA's.
"In the past, the common theory was to save money by focusing on loss adjusting expenses," explained Kost. "Claims departments concentrated on overhead costs and productivity issues, and MS/B's IntegriClaim field estimator and IntegriClaim Administrator claims management technology met those needs. Now, Analytics expands the focus to include Losses Incurred, one of the largest liabilities on a carrier's P & L statement."
We have no beef for or against IntegriClaim. It is a great tool to help track and establish historical data in a refined manner so when all is said and done, more accurate premiums and payouts are it's bottom line.
And I'm not the enemy here OK...
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Reconstruction Man
124 Posts |
Posted - 01/25/2004 : 02:29:08
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Oh...I get it now...you're discrediting me with your colorful and insulting comebacks...ahhh....OK...well go ahead...get it out of your system...
Is there any legitimacy to anything we have offered tonight that indicates claim analysis is a part of establishing premium values? I mean, first you start off with the authoratative
'no major carrier or adjusters use IntegriClaim'...then more denial about field adjusting data not being any part of premium rate setting processes...Exactly who are you trying to influence with your rational?
Well, if bein' ill and misinformed is the way it is...so be it...But we're not...so, we done here?
P.S. Do you even know what you said above..you said..."Rate making is based on the total costs incurred by all carriers within a state based on all loss experiences to all loss exposures from data compiled from each carrier within that state by ISO.
We both realize the same information Jim. MS/B IntegriClaim loss [experiences] data generated by it's users is PART of the total "costs incurred" data generated and compiled by ALL carriers. It makes up part of the info that TDI look at. Now repeat after me..."Rate making is based on... compiled data"......"Rate making is based on... compiled data"... |
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okclarryd
USA
106 Posts |
Posted - 01/25/2004 : 08:27:14
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Recon Man, you're full of it. You have demonstrated your excellent vocabulary and writing skills beyond what anyone of us would have asked.
Beyond that, your postings are nothing but that. MS/B component pricing is in fact based on zip code pricing adjustments but what does that have to do with anyone's underwriting department?
NUTTIN, PERIOD!!!
Other than that, I kinda look forward to working a claim with you as the contractor.
I may not know much but I know this: It's gonna be fun!! |
LARRY D HARDIN |
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Reconstruction Man
124 Posts |
Posted - 01/25/2004 : 10:09:59
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JimF summed up the premium rate establishing process with the statement:
'Rate making[b/] is based on the total costs incurred by all carriers within a state based on all loss experiences to all "loss [i]exposures" from [b][i]data compiled from each carrier within that state by ISO.'
We don't know at what point specifically the accumulated insurer / adjuster / [MS/B] loss data affects rate making...but it obviously does. The ability for carriers to accumulate and understand more deeply the "meaning" of the loss data, which is just ONE piece of the "rate making" process, has been refined by MS/B's IntegriClaim. program[s] for field and management professionals.
Subtracting losses against premium reserves is NOT the only way, thank goodness, to try to anticipate what rates should be "next year"...so to speak.
If you believe loss data does not help establish rate making...well..OK.
That is the good thing about living in a fairly free society. All facts can be in one's face...and they can still deny the obvious.
Loss data has it's job to do in the rate making factoring process. And products like MS/B IntegriClaim help refine the rate making process as it relates to loss data...
Since we live in south Texas, we may meet. Just mind your adjusting manners... |
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katadj
USA
315 Posts |
Posted - 01/25/2004 : 10:19:44
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There may be an alternate solution...
Perhaps we all can revert to the tried and true method of completing a project, based on the “Time and Expense” method.
Many contracts, throughout the world, employ this method of contracting utilized by some of the largest contract firms, such as Bechtel, Halliburton, Kellogg Brown & Root, Peter Kewit & Sons to name a few.
It is highly doubtful, that any carrier would agree to this method, while almost every contractor WOULD agree. The carrier is looking for a “locked in stone” number to close the file and be within the set reserve. There appears to be no concern for the contractor irrespective of the profit or loss one may suffer. On a ‘Time and Expense” contract the contract firm NEVER looses money on a job, providing the terms are set appropriately.
The carriers, utilizing soft wear estimating programs, which in turn incorporate the data bases of those that prepare the “anticipated” costs to do the work, attempt to control the pricing of each particular segment of the project (repair), while offering no alternative.
There is always the carriers alternative to exercise their option to “repair and /or replace”, but how many times is this provision invoked?
Perhaps there could be the alternative of:
A) Fixed price (Agreed)
B) Time and Expense
C) Cost not to exceed
D) Negotiated Agreements
All of the data mining, total average claim costs, line item pricing, and zip based pricing etc. will never be able to accurately assess the cost of any particular loss, AS THEY ALL ARE DIFFERENT
Until there is a methodology to insert a “difficulty factor” for the particular item, into the line item computer estimating programs, which the carriers insist upon using, no claim will be properly closed.
The use of a trained professional adjuster, in concert with a General Contractor, of equal status, is the proper way to assess the loss, arrive at a reasonable and proper cost to repair and reach an agreed price which should prevent any reopening of the claim, based on the visible inspections.
Again, only one man's opinion.
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Ghostbuster
476 Posts |
Posted - 01/25/2004 : 12:17:27
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Will someone please tell me what is Recon Man's ulterior motive? I am beyond weary with the semantics and have yet to fathom where this is all going.
What does he want? The earth to reverse it's orbit? A free rein in charging what he wants? Complimentery booze, steaks, and redheads?
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jcc1138
12 Posts |
Posted - 01/25/2004 : 12:22:55
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I will note that in the Maryland/DC/Northern VA area that the Overhead and Profit is 15 and 10, which will make some people very happy.
I am curious about Recon Man, who seems to miss the point of this website, which is focused on adjuster issues and not the issues of pricing, underwriting, actuarial issues, etc. We are adjusters, we do not have control over any facet of insurance other than the investigation and settlement of claims.
I would like to see that we keep to the issues in the topics at hand and not use each forum as a reason to go off on tangents that do not move the topic forward.
I would suggest Recon Man that you may be happier looking for a forum that discusses the overall insurance industry... |
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Reconstruction Man
124 Posts |
Posted - 01/25/2004 : 22:07:37
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--katadj
Well said. Actual [reconstruction] costs only show up after the job is completed.
Sorry everyone about the html tags showing up.
Also, the MS/B "Marshall & Swift/Boeckh Combines Technology/Analysis" article mentioned above, is straight from their site...See the part about underwritters and actuarial stuff...?
They state:
---"The answers come from MS/B Analytics, a unique service that combines technology and expert analysis to maximize control over claims severity and enhance claims, underwriting, and actuarial decision-making."
---"The data that drives MS/B Analytics comes from property claims reported in IntegriClaim™ and the IntegriClaim Administrator™ property field estimating, database and management technology.
Well JimF...maybe MS/B is just kidding about underwriters and actuaries decision making "use" of the data collected...
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fkj
USA
17 Posts |
Posted - 01/25/2004 : 22:42:21
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"Multi dimensional mining of claims files"
Whats that? |
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JimF
USA
1014 Posts |
Posted - 01/25/2004 : 22:54:47
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I understand and accept the comments MS/B presents in their advertising in the context in which they are presented. That notwithstanding, that does not take away from the fact that data mined from IntegriClaim, (or SIMSOL, Xactimate, Powerclaim, ad infinitum) has nothing whatsoever to do with premium rate making by state regulators nor is such data compiled or used by the ISO in their submissions for rate setting or increases.
Look at rate setting in this sense, the ISO presents to a state insurance commissioner's office a request to set a premium for a new insurance line ("prior approval") or for a rate increase based on inflation or catastrophic loss events. The information submitted to the rate maker is generically along the lines of anticipated or actual losses of 100,000 losses in this line per year in this state, with anticipated or actual loss costs (to include all costs including indemnity, loss expenses, administrative costs, etc.) of X Gross Dollars Per Period. Now within that data submission there are likely averages as we know them or mean, median, and mode quantifications as statisticians know them. No where in such data submissions are their actual individual claim data from IntegriClaim nor would there be breakdowns of component pricing or even whether such averages included or excluded a payment of Overhead and Profit within an indemnity payment.
Once a premium rate is set by the state authority, then each individual carrier may elect to sell this same coverage for LESS premium than established by the state commissioner, but not for more. Data mined by an individual carrier could be used to make marketing decisions which would allow an insurer to sell their product at a more competitive premium rate. But as we all know, the concept of insurance is based on "the law of large numbers" and with few exceptions, not many carriers loss experience would be solely the result of every adjuster (cat, staff and independent) using the same estimating software. But in the end, even that would not truly change the overall individual carrier loss history which should clearly show the total number of claims by class, the total gross payments made in indemnity for the total number of subject losses, and given the first two sets, derivation of an average anticipated or actual loss would of course be rather simplistic.
By and large, given the concepts and methodology of large loss statistical forecasting, there is generally very little variance to be expected or realized in loss severity, loss frequency, and thus indemnity loadings of the insurance premiums. Generally speaking, the indemnity loading portion of the insurance premium is fairly static, and it is the inflationary costs of generally accepted operating costs of carriers such as salaries, benefits, technology costs, regulatory costs, and lowering or loss of investment income returns which reflect the neccessity for premium rate increases.
I stand by my earlier comments that IntegriClaim and data mined from their software has absolutely nothing to do with state insurance premium rate making submissions nor the rate making processes. And nothing presented in either MS/B advertising or by the misinformed changes or can change that fact.
And if you don't believe me, just pick up the phone tomorrow morning and run Re Con Man's zany insane idea by someone in your state's insurance commissioner's office. Determining the facts, for those who want to know and present them, really is that simple.
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Edited by - JimF on 01/25/2004 22:55:51 |
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O&P History Question
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