I love a challenging business problem and finding the most efficient solution – and often it comes down to data and analytics. Granted, the human element is why we’re all here and doing what we do, but it tends to get messy and blurry around the edges. With numbers, you know exactly where you stand.

Numbers are also one of the main reasons I am in the business of developing contents claim solutions for the insurance industry. Making the contents claim process more efficient is work. I understand the effort. Currently, everyone is losing out due to a lack of accurate content data. This includes carriers, brokers and agents, adjusters, and insureds. The problem stems from the fact that most insurance carriers do not know the value of what they insure when it comes to contents.

Coverage C insures all of the contents of a home that are not a permanent part of the structure, such as furniture, clothing, appliances, electronics, and books. Traditionally, carriers have simply set contents coverage as a percentage of structural value, ranging from 40 to 70 percent. In fact, when looking at the relationship between structural values versus contents values, we find they are inversely correlated. Figure 1 on page 48 illustrates how home values (a proxy for the replacement cost value) and the Price Index for Consumer Durables actually move in opposite directions.

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