The Bay State is one of the least risky places from an insurance perspective, according to a recent TransUnion survey.
TransUnion’s Insurance Risk Index, which was developed from observed insurance loss ratio performance, uses the first quarter of 2001 as a baseline. A value of more than 100 from the credit or insurance risk index represents a higher level of relative risk. The index is designed to show the relative expected loss ratio for market segments nationwide, according to a statement.
The states demonstrating the least risk from an insurance risk perspective are Alaska (95.16), Minnesota (95.33), Massachusetts (95.51) and Hawaii (96.00). Montana continues to rank as the riskiest state with an index of 109.52. It is followed by Washington (105.81), Mississippi (102.95) and Arkansas (102.00).
The Insurance Risk Index posted its first noticeable decrease since the fourth quarter of 2007, with every state, except Nebraska and the District of Columbia, exhibiting a decline from the previous quarter.
The Credit Risk Index, which surveys default and delinquency rates, increased nationally 0.8 percent to 129.3 in the third quarter from 128.3 in the previous quarter. The Credit Risk Index reached an all-time high at the national level for the fourth consecutive quarter.
"The key ingredient within the Insurance Risk Index is TransUnion’s insurance risk scores, which are heavily influenced by the length and stability of responsible credit performance," said Chet Wiermanski, global chief scientist at TransUnion. "To the contrary, the Credit Risk Index places a great deal of emphasis on a variety of indebtedness and credit utilization measures, key ingredients in TransUnion’s generic credit risk scores. This is why these indices can move in opposite directions."
He added: "As the economy continues to steadily improve, we anticipate that the Insurance Risk Index will continue to remain flat, possibly decreasing over the next few quarters, if employment improves. On the other hand, TransUnion is expecting the Credit Risk Index to continue to increase for the remainder of 2009 at a continuing decelerating rate. TransUnion also anticipates a greater number of states to show improved credit risk index levels in the coming months."
