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LexisNexis Homeowners Solutions -  Home Inspection Index
 

LexisNexis Homeowners Solutions - Home Inspection Index

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Current challenges for home inspections.

Current challenges for home inspections.

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    LexisNexis Homeowners Solutions -  Home Inspection Index LexisNexis Homeowners Solutions - Home Inspection Index Presentation Transcript

    • LexisNexis Homeowners Solutions Home Inspection Index March 28th 2013
    • •Industry Overview • Weather • Shopping •Home Inspection Index • Current Challenges for Inspections • LexisNexis Solution •Summary 2 Overview LexisNexis Proprietary & Confidential
    • Industry Overview 3
    • Industry Challenges • 2012 U.S. Industry Losses - $57.9 billion • Far above the 2000–2011 average loss of $27 Billion • Wind & Hail both continue to add a disproportionate component of the CAT and Non-CAT losses • 2011 Combined Ratio (122%) worst since 2001 • Modernizing Rate Structures • Carriers to continue to evolve their by-peril modeling • Rating sophistication and segmentation continue to challenge carriers 4LexisNexis Proprietary & Confidential
    • Source: NOAA Storm Prediction Center; http://www.spc.noaa.gov/climo/online/monthly/2011_annual_summary.html# There were 29,996 severe weather reports in 2011; including 1,894 tornadoes; 9,417 “Large Hail” reports and 18,685 high wind events 5 Wind/Hail: Weather Reports In The US – 2011 Wind DamageLarge HailTornadoes LexisNexis Proprietary & Confidential
    • Source: NOAA Storm Prediction Center; http://www.spc.noaa.gov/climo/online/monthly/2012_annual_summary.html# 6 Wind/Hail: Weather Reports In The US – 2012 Wind DamageLarge HailTornadoes There were 22,503 severe weather reports in 2012; including 1,119 tornadoes; 7,033 “Large Hail” reports and 14,351 high wind events
    • Shopping Activity 7
    • Actual Shopping Volume Actual Inquiry Volume up 200% since in Aug’08! LexisNexis Proprietary & Confidential 8 100 150 200 250 300 350 Sep-08 Jan-09 May-09 Sep-09 Jan-10 May-10 Sep-10 Jan-11 May-11 Sep-11 Jan-12 May-12 Sep-12 US Shop Index
    • Forecasted Shopping Volume Quote Volume Forecasted to Grow Through 2015! 9LexisNexis Proprietary & Confidential 100 150 200 250 300 350 400 450 Sep-08 Jan-09 May-09 Sep-09 Jan-10 May-10 Sep-10 Jan-11 May-11 Sep-11 Jan-12 May-12 Sep-12 Jan-13 May-13 Sep-13 Jan-14 May-14 Sep-14 Jan-15 May-15 Sep-15 US Shop Index Forecast
    • Inspection Overview 10
    • • US Homeowners Annual Inspection Spending ~ $200M(1) – Many large carriers allocate 1-3% of annual underwriting expense budget to field inspections (% usually higher for mid-smaller companies) • Industry Actionable Rate ~ 10-30%(1) (e.g. 70-90% of inspection decisions do not offer new/actionable insights) – Important to improve actionable rate given carriers’ limited inspection budget • Large number of carriers using random risk selection, simple home-grown guidelines or business rules engines to order field inspections e.g.: – Amount of Insurance – Year Built – Historical Loss Experience – Other home-grown guidelines Current State of Homeowners (HO) Inspection Programs 11 Source: (1)Claims Journal, Oct 17, 2011 Note: Actionable Rate is defined as the percentage of inspections that would actually result in finding a state of undervaluation and/or one or more type of condition hazards LexisNexis Proprietary & Confidential
    • Actionable Rates You inspected both. Which one should you have inspected? Were your inspection dollars spent wisely? 12  LexisNexis Proprietary & Confidential Property A • Year Built: 2000 • Roof Type: Hipped Roof • Square Footage: 3,335 sq. ft • Zip Code: 33176 Property B • Year Built: 2000 • Roof Type: Hipped Roof • Square Footage: 3,275 sq. ft • Zip Code: 33176
    • Home Inspection Index Overview 13
    • The Solution: LexisNexis Home Inspection Index (HII) 14 14LexisNexis Proprietary & Confidential • Reduce Inspection Expenses: HII can serve as a filter for many of those properties where inspections are not necessarily required. • Enhance Profitability: Gain risk selection and remediation insight both at point of sale and across an existing book of business. • Improve Customer Experience: Non-invasive solution (relative to sending an inspector on-site) that provides fast, actionable information and speeds up the underwriting process. LexisNexis Home Inspection Index is a new non-FCRA (“Tips & Leads”) solution that identifies properties most likely to have an actionable inspection discovery, enabling targeted inspection expenses. LN HII can be delivered real-time/interactive (system to system) or in batch (via a Rule Plan). Reduce Inspection Expenses Enhance Profitability Improve Customer Experience
    • HII Is Derived From A Robust Predictive Modeling Approach Leveraging LexisNexis’ Unique Loss and Public Records Databases Inquiry Data • Name • Address • Coverage A HII Predictive Modeling Analysis 15 Carrier Data LexisNexis Data [ 99 = non scorable due to insufficient information] Low Risk High Risk 1 2 3 4 5 HII Output Property Characteristics Public Records Loss Data LexisNexis Proprietary & Confidential Optional inquiry fields include: • Year built • Sq. footage • Pool and/or trampoline indicator
    • HII can be deployed at Point of Quote, Point of Underwriting or Point of Renewal 16 Point of Marketing Point of Contact Point of Quote Point of Underwriting Point of Renewal Point of Compliance Point of Claim • Flag riskiest properties and help determine the type of inspection needed • Carrier rank orders results by Inspection Index and determines profitable cut-off against inspection costs LexisNexis Proprietary & Confidential • Segment property risk and attract most profitable risks • Adjust price tiers for the best risk segments. Inquiry • Policy Holder First & Last Name • Risk Address (Street, State, City & Zip) • Coverage A Interactive Workflow Batch Workflow HII Data call to LexisNexis Home Inspection Index (HII)
    • • HII helps carriers target properties most likely to have condition or liability hazards, allowing them to prioritize and target their inspection budget. • HII leverages LN’s unique databases including the largest loss history database available in the industry and our 46+ billion public records. • HII provides carriers with valuable risk selection information which can be combined with the company’s own custom underwriting rules used to evaluate new business. • HII is easily integrated into a carrier’s workflow, be it at point of quote, point of bind, or point of renewal. • HII improves customer and agent experience by offering a point of underwriting index which will reduce time and expense ordering inspections on lower risk properties. LexisNexis Home Inspection Index Unique Benefits 17LexisNexis Proprietary & Confidential
    • • Most carriers use simple homegrown underwriting guidelines to decide when to order inspections on new business and renewals. • However, with the strategic focus on expense mgmt and improved profitability, many forward looking carriers are working/starting to work on optimizing their inspection programs. • LexisNexis Home Inspection Index leverages LN’s unique databases including the largest loss history database available in the industry and our 46 billion+ public records. • LexisNexis Home Inspection Index leads to more actionable inspections resulting in: – Reduced Inspection Costs – Right Premium – Loss Mitigation: amending or cancelling the right policies – Improved Customer – Agent Experience Conclusions Increased Bottom Line 18LexisNexis Proprietary & Confidential