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PF&M AT A GLANCE SO… what’s your hobby? Personal lines coverage traditionally has been approached in the same manner as handling beans, corn, and other commodities. Personal lines consist essentially of residential and vehicular policies. As personal lines exposures are handled in the same manner, insureds likewise are treated as if they were all the same. Take a look at any company’s application and compare it with those of other companies. You’ll find that they are all set up to gather details about what a person owns and lives in or what he or she owns and travels in. The owners appear to be secondary. The personal lines exposure that is assumed to be the most like a commodity is personal liability. Traditionally, individuals are asked about their occupation, but what is useful about that information? Is it likely that any hundred teachers, office managers, writers, or retail workers represent similar personal exposures? Perhaps that way of thinking is obsolete. Insurers might consider making fewer assumptions about individuals and asking more questions about how those customers spend their time. Asking about hobbies would be a great first step. Showing more interest in our hobbies could substantially improve insurers’understanding of our personal loss exposures. Insurers spend a lot of time and effort trying to find insights into factors that affect their exposure levels. It is astounding that developing more information about customer interests has been ignored. Hobbies often are more revealing of lifestyle and attitude than questions about occupation. Hobbies frequently are connected with certain types of property and activities. Individuals can be quite passionate about their interests, and their time and money are used to support what they enjoy. That may mean that hobbyists travel, collect gear and/or equipment, host meetings, organize outings, create Web sites, or write newsletters. Detailed hobby information may shed light on specific coverage or underwriting needs. Insureds would be better served if insurers did a more thorough job of identifying property and liability exposures. The information might be a consideration in actually making refinements in personal liability rating. And insurance professionals have always been interested in pricing exposures accurately. For more information on this subject, please see the PF&M Analysis from The Rough Notes Company. Agency OnLine subscribers, please refer to PF&M Section 401.1, Hobbies - Hazards and Opportunities. * |
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