Time is short for me today but one thing that stood out in the State Farm rate increase application was the use of models to calculate the cat risk assumptions that drive the rate up (and the rate app is woefully short on the assumptions used in these models). In Florida Allstate used very short term models that have proven highly inaccurate to justify rate increases there that Commissioner McCarty turned down. Additionally I highly recommend you contact Beatrice Garcia of the Miami Herald as she reported extensively on the use of those unapproved models back in early 2008. I’d also track down Karen Clark, the person who pioneered the use of weather modeling for insurance for additonal info. You guys need facts, not industry spin to challenge Mike Chaney and this bogus rate up from State Farm.
Weather modeling posts we’ve done on Slabbed:
How’s the weather model – December 2007
Insurance Weather Modeling – Others have questions too – December 2007