Terrorism has a different set of parameters, and it's difficult to predict

I think technology will continue to make the industry more efficient, but I do believe that any gains that the insurance industry gets, in terms of their expenses ratio from improvements in technology, will be replaced with a continuing theme of "Let's litigate as a way to solve this problem." I think terrorism will continue to be problematic for the industry. As a result, they have a limited ability to price for that exposure. So, you have all these companies that have all of this exposure that may be subject to acts of terrorism, and they have few ways to predict it. We have fifty or seventy-five years of data on storm paths in the United States, so that you can say, "Gee, if you have a lot of business in Hilton Head, S.C., sooner or later, you're going to get hit with a hurricane."

We have many of ways to predict where hurricanes are going to strike, how severe the damage is going to be. Let me just draw a contrast: terrorism is a relatively new phenomenon, and it's a manmade phenomenon, so it's difficult to predict. It caused the industry to really try to think about how they were going to develop pricing models to deal with the terrorist threat. I think up until 9/11, nobody really considered those kinds of acts of terrorism as things that they had to plan for in the pricing of their product. So, it's difficult to hold innovation in the marketplace that the customer can really see as a differentiator for a long period of time. If I issue a policy, and I have to file it with the Department of Insurance, a competitor can go down to the Department of Insurance, read that policy and basically replicate the whole thing. At least traditionally, it's been difficult to have innovation last long, because the product is fairly easy to replicate. Of course, innovation is important, but the problem is you can only be innovative within the constraints of the regulatory and legal environments.

If you should ask your agent if a liability	Look at the premium and you can	Pricing a premium is one basic process for
The customer and that that the policy	And when they have a claim, they	Profitability is the biggest thing I
Insurance companies try to mitigate those	How you go about getting new customers	Marketing is obviously important
It's a combination of a lot of bad things	Terrorism has a different set of parameters	Some of these awards, at least on
There are three major types of companies	P&C insurers include State Farm	The three biggest risks insurance companies
The appearance of the injured person will	In this way, an insurer has about three	In most jurisdictions, rate and form
Governments are becoming more involved	The idea was really to spread the