A staggering number of billion-dollar weather and climate disaster events have rocked the United States in 2023. The National Oceanic and Atmospheric Administration reported in early September that 23 events with losses exceeding $1 billion each had hit the country last year. That marked the most in a calendar year in more than four decades of record-keeping.

Catastrophes, higher building costs, and inflation are all impacting commercial underwriting performance and insurer profitability. Proper portfolio valuation is becoming exponentially important as the reinsurance market tightens. So, how can insurance companies better manage their books of business now and into an uncertain future? The answer is rooted in addressing valuation issues by tapping third-party vendors. The answer is tied to partnering with a robust digital platform provider. The answer is collaboration.

In the past, it was easy for insurers to dismiss data as untrustworthy because they didn’t want to invest in it. Now, third-party vendors present necessary advances that help to paint the bigger picture. Platforms like OneShield are the glue that brings these tools together. And, not just for underwriting purposes. In the commercial lines business, customers are generally good risk management partners. OneShield and its customers have seen tremendous engagement with agents and policyholders who want to proactively manage risk. Failing to enable that is a missed opportunity.

Undervaluation Issues

One critical issue plaguing the commercial property insurance sector is undervaluation. Many insured properties are not accurately valued, leading to potential discrepancies when claims occur. This issue is exacerbated by the changing climate, which has expanded the geographic reach of natural disasters.

The Tightening Reinsurance Market

A convergence of global events leading into 2023 resulted in the hardest property-catastrophe reinsurance market in generations. Tightening reinsurance capacity puts pressure on carriers and raises both portfolio-level and granular questions. Commercial insurers are digging into the vulnerabilities and susceptibilities of individual properties.

Beyond Underwriting

A crucial takeaway from a recent webinar with OneShield and AAIS was the need for insurers to go beyond traditional underwriting practices to effectively manage a book of business into the future.

We emphasized the value of using data not only for new business but also for existing clients. The webinar showcased how third-party data and insights enhance insurers' risk management capabilities. Platforms like OneShield act as central hubs that connect these data-driven tools, enabling insurers to engage with agents and policyholders for proactive risk management.

The Path Forward

To remain competitive in the ever-changing commercial insurance space, carriers will need to continue to embrace change along with the unknown, adopting new technology and tools along with data-driven processes to improve loss ratios and customer satisfaction. Each carrier’s path forward is different. What matters most is they begin taking steps to implement new tools and data into their processes that improve loss ratios and customer satisfaction.

About OneShield

OneShield Software provides business solutions for P&C insurers and MGAs of all sizes. OneShield’s cloud-based and SaaS platforms include enterprise-level policy management, billing, claims, rating, relationship management, product configuration, business intelligence, and smart analytics.

Designed specifically for personal, commercial, and specialty insurance, our solutions support over 90 lines of business. OneShield’s clients, some of the world’s leading insurers, benefit from optimized workflows, pre-built content, seamless upgrades, collaborative implementations, and pricing models designed to lower the total cost of ownership. Our global footprint includes corporate headquarters in Marlborough, MA, with additional offices throughout India.

For more information, visit www.OneShield.com.