A Swiss Re client success story: A smooth road ahead with the Motor Market Analyzer
Swiss Re helps launch Nationwide’s digital-only product Spire in Texas with the MMA.
What’s in a model?
When it comes to auto insurance, MMA is materially different than traditional rating factors. MMA is a proprietary car-accident model that predicts frequency and a proxy for severity using non-insurance related databases (like road network characteristics, traffic congestion, deer density, elevation, precipitation, car sales, etc.). For years, insurers had relied on heavily financial-laden predictors like individualized credit scores to come up with insurance scores that translate into insurance premiums. Based on industry data, increasingly that proposition seems inadequate or illogical. MMA combines modeled predictions to allow for an individualized fair scoring. And Swiss Re back tests modeled-loss prediction against rating and loss histories.
It also enhances the value of telematics by scoring the location risk not just the behavioral risk. Full speed ahead in Texas, with eyes on the road ahead ”Swiss Re innovation was a key part of getting us successfully to market in Texas,” said Scott Liles, Spire project leader and Nationwide’s innovation leader. “MMA allowed us to act on Spire’s philosophy, which is to deliver on a fairer product, which is what consumers, especially millennials have wanted for years, along with one that is more predictive and accurate.” Now, Spire looks to expand into additional states. Bottom line, MMA can be a roadmap for insurers looking to profitably grow their auto book, while optimizing their portfolio by using next-gen predictive modeling.
What success looks like with a trusted partner:
Motor Market Analyzer value added
Enabled the reduction of rating factors to the 3 simple key components ‘where, what and how’ you drive, without compromising predictability.