Reducing the Impact of Litigious Policyholders on P&C Carrier Loss Ratios

According to National Association of Insurance Commissioners (NAIC) …while Florida homeowners insurance claims accounted for just over 8% of all homeowners claims opened by U.S. insurers in 2019, homeowners insurance lawsuits in Florida accounted for more than 76% of all litigation against insurers nationwide.” – Insurance Journal 2021

The Florida homeowners insurance market is in turmoil with many companies leaving the market voluntarily or through insolvency.  The companies still in the state have an urgent need to raise premiums to cover the real cost of doing business in Florida.  The reasons behind this are well known – the rising costs and frequency of weather events combined with the highly litigious environment. Even as we await the outcome of the current special session, we know the solution to these ongoing challenges will not be a simple one. 

Florida is the site of 79 percent of all homeowners insurance lawsuits over claims filed nationwide while Florida’s homeowner’s insurers receive only 9 percent of all U.S. homeowners property insurance claims, according to the National Association of Insurance Commissioners. Floridians For Lawsuit Reform estimates 130,000 property claim lawsuits will be filed in 2022, largely due to Florida’s favorable litigation environment.”  – Insurance Information Institute 2022. 

When we talk to our carrier customers, we ask “What would you do if you could identify those consumers that are most likely to litigate before they become your customers?” Imagine the power of only needing a name and address to determine a consumer’s propensity for litigation.  This is a powerful risk prediction Pinpoint Predictive provides at the top-
of-funnel, prior to quoting, and prior to binding allowing carriers to make informed decisions about how to grow and manage Florida business. The Litigation Risk Score can also be used alongside Pinpoint’s actuarial Loss Prediction solution that provides individual profitability and loss predictions – also at the top-of-funnel and prior to renewal decisions.

Pinpoint uses trillions of behavioral data points curated for the insurance industry combined with deep learning capabilities to create highly accurate risk scores across a multitude of categories, including Litigation Propensity, even before an application is submitted.

With the power of these deep-learning powered predictions at the top-of-funnel, Florida insurers can better manage incoming and existing risk to meaningfully shift the risk mix.  Ultimately, this means that more insurers can keep insurance affordable and available for Florida residents.

Check out this case study to learn more about how Pinpoint is partnering with Homeowner Carriers who write in the state of Florida.