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Driving profitability in homeowners coverage: Examining ‘mitigatable’ losses

Why redefining losses as either "mitigatable" or "non-mitigatable" is key to developing specific non-CAT management strategies.

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Insurers have long contemplated exiting the homeowners line of business because it’s historically unprofitable. Recently, Allstate’s CEO, Tom Wilson, said the carrier considered vacating the homeowners market after the 2005 hurricane season. However, consumers have demonstrated their desire to bundle insurance coverage, and Allstate ultimately realized that not offering both auto and home was too big of a competitive disadvantage. Recent studies show that homeowners is growing in both policies and premium, yet the industry has only experienced four years with combined ratios below 100 since 1990.

Dax Craig

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