Models · · 3 min read

US Insurers Have a Growing "The Model Made Me Do It" Problem

Third-party catastrophe models are making most homeowners insurance underwriting and pricing decisions and regulators are starting to question who's accountable for that.

US Insurers Have a Growing "The Model Made Me Do It" Problem
Photo by Breno Assis / Unsplash

There is growing concern among regulators about the role that catastrophe models play in the U.S. homeowners insurance market crisis, and some are questioning whether current disclosure rules go far enough in explaining their dynamic in market pricing.

"These third-party modeling companies are really making almost all of the decisions, at least in Colorado — from an underwriting and pricing perspective," said Colorado Insurance Commissioner Michael Conway during a panel discussion at the Brookings Institution on Wednesday.

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