The Insurance Loss Control Association represents the loss control professionals in the insurance industry — the eyes and ears of the underwriters. As investment income has plummeted in the past decade, the insurance industry profitability model has undergone a radical change. Moving from the back seat, loss control is now the focal point in the drive for profitability.
To put things in perspective, 15 years ago insurance business models paid out $101.15 for every $100 of premium collected. Times were good, however, as investment income from the markets more than made up the difference. The entire industry became “premium-centric” as the stock market skyrocketed and investment income soared. With the new realities following the market’s collapse, insurers have swung back to a business model that targets paying $75 or $80 for every $100 in premium collected; and loss data is the driving factor in pricing.