The current homeowners underwriting environment is exceedingly complex. To ensure dependable and consistent underwriting decisions, companies are incorporating more and more risk-specific information–such as fire-protection class, claims/loss histories and crime reports–into their underwriting decisions.
Straight-through processing–where the vast majority of underwriting decisions are made by programmed rules–is becoming more common. As a result, there is an increased demand to automatically incorporate risk-specific information into the underwriting environment.
For those insurers involved in catastrophe risk, the common risk metrics are hazard assessments such as distance to the coast or the nearest fault, county-level restrictions on total insured values and territorial ratings. These metrics, while useful, do not provide a complete view of the catastrophe loss potential.
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