We live in a time of economic volatility, which makes finding opportunities for profitable growth a stress-inducing proposition. It’s hard, from a limited vantage point, to pinpoint what will happen next—and where. That’s why for analysts, figuring out what lines of insurance their companies should invest in, based on the data they have on hand, can often feel like a gamble.

But what if there was a market analysis tool, based on a decade of industry premium and loss information reported by the industry, merged with the most powerful segmentation data available covering the commercial insurance market? What if that tool could report highly detailed prior loss ratios after critical adjustments for credibility and market composition, enabling customers to get right to work pursuing profitable growth in specific market segments like small commercial construction, middle-markets manufacturing, and national accounts wholesale trade?

Well, that tool is here, and we’re calling it Profitability Advisor.

Source: MarketStance Commercial Insight + Profitability and Growth Advisors

How Profitability Advisor works

For years, insurers have been clamoring for aid in their pursuit of profitable growth. With Profitability Advisor, we’re further enhancing an already impressive market analysis tool, empowering our customers to target both growth and profitability.

In the figure above, you can see some fundamental differences in the construction segment. Prior loss ratios in other composite Profitability Advisor lines (Commercial Auto, BOP, GL, & Property) have shown higher residential construction risks than specialty trades and heavy/civil construction. Assuming similar expense ratios, the historical advantage of the trades and heavy/civil could easily make the difference between making an underwriting profit – or not.

With this innovative new business solution, our customers can determine which lines of insurance are driving U.S. profitability by market size segment, class of business, and location in four core lines of business—auto, general liability, property, and business owners.

This tool exists on the MarketStance Commercial Insight platform and can be easily added to any new or existing MarketStance Commercial Insight subscription. When combined with Growth Advisor, Verisk’s premier premium and exposure base forecast for U.S. commercial lines, Profitability Advisor can give Verisk’s customers the critical boost they need.

Try it today! Visit our website to find out more.

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By Eric Price-Glynn

Eric Price-Glynn is senior principal and head of the MarketStance division. He can be reached at eglynn@verisk.com.