Facing the need for better reporting
Chicago-based AAIS is a national, not-for-profit member association established as a statistical agent, rating bureau, and advisor to the property and casualty (P&C) insurance industry.
As a statistical agent, AAIS gathers data from member insurers, anonymizes, aggregates, and passes it along to regulators to inform legislative policy. State regulators need this information to help maintain a healthy industry by ensuring that consumers are not overcharged or discriminated against, and that carriers earn enough to stay solvent.
Antitrust laws prevent insurers from sharing premium and loss data. So AAIS serves as a trusted third-party to ensure that insurance products evolve with the changing market and reflect the real-world industry experience.
As Zerkovich dug into the issue of regulatory reporting, she discovered that a rising demand for data was overwhelming insurance carriers. Although these firms are required by law to provide the data, they gained little value for preparing it.
Carriers were spending huge amounts of time and resources to stay on top of these chores. In fact, larger carriers employed up to 60 people simply to handle regulatory reporting.
Even so, the carriers could only submit the bare minimum of data requested, and it was often outdated by the time it was reported. So the data that regulators were gathering wasn’t robust enough to help them create good policies for extreme events like floods or hurricanes.
“A problem emerged where regulators were developing policies based on unreliable data,” says Truman Esmond, VP of Solutions and Partnerships with AAIS. “We needed to do a better job of collecting data and streamlining the process for the future. And we needed to create value for all stakeholders: carriers, regulators and AAIS.”
Everyone in the industry saw the need for a more resilient and efficient resource: a system that would yield data to inform policymakers and also help carriers operate efficiently and the platform to compete and innovate in the marketplace.