Using total PIC time is an attempt at an objective metric. Is there a significant difference between a 999 hour pilot and a pilot with a thousand hours? No, but one meets a defined standard while the other does not. Period.
Insurance certainly enters the equation, it's driven by pure numbers and actuaries, yet they get burned on those numeric models.
Personally, I think there are psychological traits that make good pilots. I know of no data supporting this, I've just worked with some sharp junior pilots and dud (even dangerous) senior pilots. Until that profile and a metric is available to evaluate and weigh against experience, hiring on personality will always have the hazard of some degree of a nepotistic hire... A bad pilot is a problem, a connected bad pilot is worse.