Insurance companies often write multiple lines of business. A given firm may insure people’s cars, the drivers of those cars, their houses, maybe their businesses. Each of these lines shows different loss characteristics and these can change over time. Part of my job is taking a loss listing and assigning the losses to categories so I can then do juju on them as similar groups. Sometimes this isn’t straight forward so I’ll contact someone more familiar with the client who may know. Today I had one of those calls:

Me: So, there’s a claim in 2004 with no real description except that it happened to a fuel oil company. Lists a destroyed vehicle, and about five million more in property damage but no one was injured. What was happening there?
Broker: Oh, that was an explosion.
Me: Any more detail?
Broker: Guy thought he had turned a valve off, turns out he hadn’t. Underground parking lot filled with gas until the building’s heat kicked on and triggered an explosion.
Me: Wow. Gonna call that auto liability.
Broker: Those are rare, though.
Me: How about the loss in 2007? That looks like a bundle of about eleven claims.
Broker: Oh, that was the beginning of the shale boom in that area. New guy operating a truck and he didn’t properly seal a container and it exploded. But that was a one time deal.
Me: Good to know, that’s AL (short for auto liability) too, and in 2011? Again, this one lists a lot of auto liability but no details.
Broker: Oh yes. A truck was on the highway and some volatiles were leaking because it wasn’t properly closed and it started a fire and there was a small explosion.
Me: Uh, huh. Soooooo….
Broker: That’s probably AL too.

I’m an actuary and don’t really do loss containment or preventative action, but it seems like if your three largest claims are all caused by exploding vehicles that someone didn’t properly operate, maybe you should work on that.