A major threat of lowered financial ratings and soaring reinsurance rates is lurking for workers' compensation insurers as a result of flawed catastrophe modeling data and process difficulties. Above all, there is the possibility of ticking time bombs within otherwise profitable portfolios, which might produce surprising loss amounts that could threaten the financial stability of insurance companies.
The 9/11 terrorist attacks concentrated the minds of insurers on the truly gigantic losses that are possible in workers' comp and underscored the need for accurate catastrophe modeling.
However, while much work has been done over the past six years by commercial modeling firms and some insurers to develop the modeling discipline, the accuracy of these models is being hampered by poor data quality, which is a growing concern within the industry.
Recommended For You
Want to continue reading?
Become a Free PropertyCasualty360 Digital Reader
Your access to unlimited PropertyCasualty360 content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking insurance news and analysis, on-site and via our newsletters and custom alerts
- Weekly Insurance Speak podcast featuring exclusive interviews with industry leaders
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical converage of the employee benefits and financial advisory markets on our other ALM sites, BenefitsPRO and ThinkAdvisor
Already have an account? Sign In Now
© Touchpoint Markets, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more inforrmation visit Asset & Logo Licensing.
