More Than 110 Executives Participate in CSC Property and Casualty ConferenceEL SEGUNDO, Calif., Nov. 23 – To prosper in a softening market, property and casualty (P&C) insurers must continue to develop innovative underwriting practices, more disciplined approaches to pricing and flexible information technology (IT) systems, according to panelists at CSC Future Focus 2004, a two-day conference hosted by Computer Sciences Corporation (NYSE: CSC).
More than 110 insurance and risk management executives, industry analysts and media representatives attended the conference, held Oct. 11-13 in Charleston, S.C. Future Focus opened with a panel discussion on P&C industry trends with representatives from the Property & Casualty Insurers Association (PCIA), Progressive Insurance, Norwich Union/Aviva plc and Broadspire.
“As an industry, we need to do a better job of utilizing the data that’s available to us to underwrite risk,” said Ernst Csiszar, PCIA president and chief executive officer. “In the wake of the four recent hurricanes in Florida, insurers are finding that the structures that survived are the ones that met building codes. Perhaps, in the future, we can incorporate these codes into our underwriting rules.”
Some carriers are already exploring innovative underwriting techniques. Progressive and Norwich Union, for example, have pioneered the “pay-as-you-drive” underwriting concept. Norwich Union has equipped 5,000 vehicles in the United Kingdom with radio frequency devices that record driving patterns such as speed and location. By collecting this data, the company can offer favorable rates to drivers who demonstrate good driving practices.
“We collect a lot of information when our customers apply for insurance, but they all have their own driving styles,” said Alexander Robinson, Norwich Union IT director. “What if we could capture individual driving patterns and then compare them to the claims history? If we combined that data with public information such as road and weather conditions, we’d have much more insight into risks associated with each driver.”
At the conference, P&C industry analysts had mixed views on market conditions, but most agreed that rates will soon flatten and most likely begin to fall as competition increases between insurers. A major challenge facing most carriers, they said, will be to make pricing decisions based on sound underwriting principles rather than market pressure.
“In this market, pricing discipline is crucial,” said Raymond Voelker, Progressive chief information officer. “We must be able to change our rates rapidly and get product innovations on the streets quickly. Last year, Progressive made more than 300 rate changes nationwide, and technology allowed us to make many of those changes in less than two days.”
Technology will continue to play a major role in profitability. The panelists predicted that satellite telecommunications and voice-over-Internet protocol technology, which enable phone calls without regular phone lines, will streamline processes and improve customer service in carriers’ back offices and out in the field.
“As the industry incorporates new communications technologies, we have the opportunity to have centralized information but decentralized operations,” said Dennis Replogle, president and chief executive officer of Broadspire, a third-party administrator for the risk management industry. “For our company to be successful, we’ve got to have plug-and-play systems that are very flexible and can be accessed anywhere.”
In addition to panel discussions, the conference featured 16 sessions on P&C issues including fraud prevention, automobile crash testing and reinsurance trends. Presenters included representatives from MetLife Auto & Home, Insurance Institute for Highway Safety, Gartner, TowerGroup and Celent Communications.
About CSCFounded in 1959, Computer Sciences Corporation is a leading global IT services company. CSC’s mission is to provide customers in industry and government with solutions crafted to meet their specific challenges and enable them to profit from the advanced use of technology.
With approximately 91,000 employees, CSC provides innovative solutions for customers around the world by applying leading technologies and CSC’s own advanced capabilities. These include systems design and integration; IT and business process outsourcing; applications software development; Web and application hosting; and management consulting. Headquartered in El Segundo, Calif., CSC reported revenue of $15.3 billion for the 12 months ended Oct. 1, 2004. For more information, visit the company’s Web site at
www.csc.com.
