The document discusses challenges facing auto insurers today, including flat premium growth since 2004 and more complex customer needs and risks. It promotes solutions from Verisk Insurance to help insurers innovate, such as using data analytics to better understand customer risks and portfolio performance. Verisk offers tools to optimize the underwriting process from quote to renewal and help insurers make smarter risk decisions.

1. your
Does your strategic plan outline how
your company will capture additional
market share?
Will it help you achieve your target
retention rate and loss ratio?
Does it include the use of analytical
insight to implement change quickly?
Are you positioned to innovate?

2. An
increasingly
complex and
competitive
marketplace

3. 2
Today’s auto carriers face
significant challenges
Consider the following:
• Thirty years ago, auto carriers operated in a
market where stable companies enjoyed an
average 7 percent annual growth in direct
written premium.Today, carriers operate in
a market where direct written premium
growth is flat — and has been since 2004.
• Eighty-three percent of drivers would prefer
to control their premiums by paying for
auto insurance based on how they drive.1
• Every year, 52 percent of personal auto policyholders change vehicles or drivers, and
30 percent of households add or replace at least one vehicle.2
An already competitive marketplace has become even more complex. Profit margins are
decreasing, and everyone is feeling the effects of the rapid commoditization of auto insurance.
Perhaps it’s time to rethink your partnership strategy.
$0
$20
$40
$60
$80
$100
$120
$140
$160
$180
2010
2006
2002
1998
1994
1990
1986
1982
NumberofInsurers
DirectWrittenPremium,DWP($B)
Direct Written Premium, DWP ($) Number of Insurer Groups & Singletons
100
200
300
400
500
600
Acquisitions in the insurance
market resulting in a one-third
decrease in the number of insurers
Plateau in premium
growth since 2004
Source: A.M. Best data set, ISO analysis
YOUR POLICYHOLDERS’ LIVES CHANGE EVERY
HOUR OFTHE DAY
• Every hour in the United States, there are 246 marriages,
121 divorces, 28,277 vehicle registrations, 152 new driver’s
licenses, 167 drunk driving arrests, 4 traffic fatalities, more
than 2,800 auto claims,3
5,663 geographic moves,4
and
7,100 job changes.5
• Eighty-five percent of college graduates move back home.6
• In 2010, the number of adult children living with their
parents increased to 15.8 million.7
How do you keep up with the life changes and events
affecting each policyholder’s risk profile?
Over the past 30 years, intense competition has cut the number of auto carriers by one third,
and premiums have plateaued.

4. An electric car at its charging station.As the automobile industry transforms itself,
insurers will need to innovate and act with analytical insight.

5. 4
Innovate — or get left behind
Given today’s market challenges, your company’s growth will depend on a willingness to act
with analytical insight and boldness.
Today’s leaders are masters at capturing information, analyzing it to achieve their business
goals, and implementing change quickly.
The reality is harsh, but it’s also very clear: Companies that don’t make the commitment to
innovate are at risk for downsizing or acquisition.
Innovation is the key to:
• generating profitable growth • increasing quote-to-bind ratio
• retaining the right customers • automating key processes
• using staff more effectively • enhancing the customer experience
• detecting and preventing fraud • making more profitable risk selection decisions
Fortunately, carriers don’t have to do all the work themselves.The right tools, technologies,
and analytics can help.
Verisk Insurance Solutions – Underwriting:
End-to-end services to help you innovate
now — and thrive down the road
Verisk Insurance Solutions – Underwriting offers a complete suite of tools to help you
throughout the auto underwriting cycle — from point of quote to policy monitoring and
renewal to portfolio management.We are uniquely positioned to offer end-to-end solutions
for auto carriers.
No other strategic partner has such a unique and all-encompassing perspective of our industry.
We offer a powerful mix of insight, technical expertise, and coordinated service.
We can help you make the complex simple.
Our sales professionals, technical experts, and consultants stand ready to help you select the
combination of underwriting solutions best suited to your needs.We’ll show you how to use
our insights to achieve your objectives. And we’ll provide the technical support you need to
tailor our products and services to your specific requirements.

6. 5
Analytics is the key to competing
in today’s marketplace
The value of data lies in the knowledge it reveals about customers.That’s why analytics is at
the center of everything we do.
While comprehensive data collection is important, even more critical is the ability to analyze
that data — and develop insights that support strategic decision making.
Our analytical insights can help you execute the right strategies in key market segments and
across distribution channels.They can — and should — drive the entire underwriting process.
We’ll help you transition from risk selection to risk management. And we’ll show you how to
optimize your portfolio by analyzing every risk in your book of business.
Portfolio Analytics,
Management, and
Optimization
Point of Sale
Policy Monitoring
and Renewal
Data + Analytics
+ Insight

7. 6
Point of sale
Get the most comprehensive set of data in the industry at point of sale:
• generate profitable growth
• access more accurate data
• make sharper risk selection decisions
• assure rating integrity
• improve the customer experience and satisfaction
• adopt new technologies faster
• identify cross-selling and up-selling opportunities
• optimize the money you spend on new business acquisition
• increase perception as a market leader among customers
• identify and prevent potential fraud before writing the policy
Policy monitoring and renewal
Monitor your policyholders and make sure you’re retaining the right customers:
• increase profitability through smart retention
• protect against natural deterioration of profits and retention
• minimize your expenses
• maintain rating integrity
• maximize the customer experience
• identify cross-selling and up-selling opportunities
Portfolio analytics, management, and optimization
Analyze and understand how each risk relates to your entire portfolio:
• get intelligence to drive your underwriting process
• benchmark your performance against the industry and your peers
• gain insight into other business functions, such as marketing, sales, and operations
• get a geospatial view and intelligence
• advance your pricing and segmentation strategy with telematics programs
• access the power of predictive risk models to classify, segment, and price risks
• use rating symbols to gain a greater understanding of the relative risk of loss for each vehicle
in your portfolio

8. © Insurance Services Office, Inc., 2012. ISO, the ISO logo, Applied Informatix, Verisk Analytics, and the Verisk Analytics logo are registered trademarks and Verisk,
Verisk Insurance Solutions, and the Verisk Insurance Solutions logo are trademarks of Insurance Services Office, Inc. AIR Worldwide and the AIR Worldwide logo
are registered trademarks of AIR Worldwide Corporation. Xactware is a registered trademark of Xactware Solutions, Inc. All other product or corporate names are
trademarks or registered trademarks of their respective companies.
545 Washington Boulevard • Jersey City, NJ 07310-1686 • www.verisk.com/underwriting
VISU010z14087(3/14)
Find out more
Visit www.verisk.com/autounderwriting for additional
information about the auto marketplace and emerging issues
affecting our industry.
To find out howVerisk data, analytics, and insight can benefit
your company, callVerisk Customer Support at 1-855-859-8775
or send e-mail to info@verisk.com.
1. Will Consumers Agree to InstallTelematics Devices inTheir Cars?
(2010 Applied Informatix study)
2. Lives change. Risks change. Keeping pace with lifestyle dynamics.
(Quality Planning report, May 2010)
3. Ibid.
4. United States Census Bureau data.
5. Bureau of Labor Statistics data.
6. Twentysomething Inc. 2010 survey.
7. United States Census Bureau data.