How often have you looked at a spreadsheet, a graph or even an SQL database, and thought: What is the story behind these numbers? How many hours do we need to spend figuring out why these numbers evolve and ponder about their accuracy and consistency? Our dilemma increases exponentially when we look for additional external data sources in today´s world of “Big Data” to improve the quality of output. The quantity of data available at the click of a button is overwhelming, and identifying solid, undisputable ties both between and within different sources is generally daunting, to say the least. It is very possible that the sheer volume of available external information discourages you from seeking further data points.
This is where Luminant Analytics comes in! Our goal is to make your number-crunching exercise easier! We hope to improve your current risk selection and costing processes through our interactive data dashboard which offers data and insights on historical data and forecasts,both based on a host of carefully curated, relevant external data. We know that you are the experts for your in-house data: after all who can track, understand, and identify the changes in your portfolio better than you? We want to supplement your knowledge of your portfolio with our insights of the various external environment changes driving claims volumes (loss frequency) and claims values (severity).
Our starting point is the analysis of the auto insurance line of business, as past years industry results indicate unexpected, elevated claim frequency and severity, and worsening loss ratios. While many answers can be found when looking into your own data, there are unexpected external changes impacting your company´s results that are not captured in them. For example, to better understand the drivers of loss frequency one could turn to macro-economic data. We know that economic activity is a positive driver of transportation activity, increasing the probability of accidents. Is that relationship different after a recession than before it? Does a decline in industries like retail push up the number of less experienced drivers in Commercial Auto? Are larger claim values only related to climbing inflation rates or is it because more expensive vehicles are increasingly involved in more accidents? Distracted driving has become the topic of the day for auto insurers- what does external data tell us about this trend? And how accurate are the data sources that capture distracted driving? Could the demographics of the commercial driver population have an impact on auto losses? How do the societal habits of newer drivers, who typically learn to drive later in life as compared to their parents, and consequently have lesser driving experience, contribute to losses?
These are just some of the questions our regular articles in the Luminant blog will address, supported by relevant findings. Our goal is to offer commentary on US auto loss drivers, at the national, regional and state level, leveraging our deep data expertise. Stay tuned for the articles as they roll in, and feel free to write to firstname.lastname@example.org with your thoughts, suggestions and feedback. We would love to hear from you!
Articles with our expert opinion
The U.S. auto insurance market is still finding its feet in the new normal of elevated claim frequency and severity.