Commentary/Opinion
Memorial Day 2023: Monday, May 29, 2023
[Ed. note: Thank you to all those who have served, sacrificed and protected our Nation].
Take a moment to learn the true meaning of Memorial Day. It’s important to recognize the difference between this federal holiday and Veterans Day (especially to vets). Also, learn why it was originally called Decoration Day, why the red poppy is a symbol, and when to fly the flag.
This U.S. federal holiday is observed on the last Monday of May to honor the men and women who have died while serving in the military. It was formerly known as Decoration Day. In 2023, Memorial Day will be observed on Monday, May 29.
On both Memorial Day and Veterans Day, it’s customary to spend time remembering and honoring the countless veterans who have served the United States throughout the country’s history. However, there is a distinction between the two holidays:
Memorial Day commemorates the men and women who died while serving in the United States Armed Forces, particularly those who died in battle or as a result of wounds sustained in battle. In other words, the purpose of Memorial Day is to memorialize the veterans who made the ultimate sacrifice for their country.
You’ll find that some veterans find it dismaying when they are thanked on this day. It’s a time remembering those who lost their lives and could not come home. We might consider how we can support and safeguard their grieving families and loved ones who are left behind, as well as reflecting on why we—the living—have the luxury and freedom that we enjoy today.
Veterans Day is the day set aside to thank and honor ALL who served in the United States Armed Forces—in wartime or peacetime—regardless of whether they died or survived. Veterans Day is always observed officially on November 11, regardless of the day of the week on which it falls. Read more about Veterans Day.
News
The Origins of Memorial Day
Three years after the Civil War ended, on May 5, 1868, the head of an organization of Union veterans — the Grand Army of the Republic (GAR) — established Decoration Day as a time for the nation to decorate the graves of the war dead with flowers.
Maj. Gen. John A. Logan declared it should be May 30. It is believed the date was chosen because flowers would be in bloom all over the country.
The first large observance was held that year at Arlington National Cemetery, across the Potomac River from Washington, D.C. The ceremonies centered around the mourning- draped veranda of the Arlington mansion, once the home of Gen. Robert E. Lee. Various Washington officials, including Gen. and Mrs. Ulysses S. Grant, presided over the ceremonies. After speeches, children from the Soldiers’ and Sailors’ Orphan Home and members of the GAR made their way through the cemetery, strewing flowers on both Union and Confederate graves, reciting prayers and singing hymns.
42.3 Million Americans Expected to Travel for Memorial Day Weekend
Road trips projected up over 6% compared to 2022.
AAA projects 42.3 million Americans will travel 50 miles or more from home this Memorial Day weekend, a 7% increase for all modes of travel compared to 2022. This year, 2.7 million more people will travel for the unofficial start of summer compared to last year, a sign of what’s to come in the months ahead.
“This is expected to be the third busiest Memorial Day weekend since 2000, when AAA started tracking holiday travel,” said Paula Twidale, Senior Vice President of AAA Travel. “More Americans are planning trips and booking them earlier, despite inflation. This summer travel season could be one for the record books, especially at airports.”
Nearly 3.4 million travelers are expected to fly to their destinations this Memorial Day, that’s an increase of 11% over last year. Air travel over the holiday weekend is projected to exceed pre-pandemic levels, with 170,000 more passengers – or 5.4% more – than in 2019. Despite high ticket prices, demand for flights is skyrocketing. This Memorial Day weekend could be the busiest at airports since 2005.
Fitch Downgrades Allstate's IFS Ratings to 'A'
Fitch Ratings has downgraded The Allstate Corporation's core property/casualty insurance subsidiaries' Insurer Financial Strength (IFS) ratings to 'A' (Strong) from 'A+'. Fitch has also downgraded Allstate's holding company ratings, including the Issuer Default Rating (IDR), to 'BBB+' from 'A-' and its senior debt to 'BBB' from 'BBB+'. Additionally, Fitch has assigned a 'BB+' rating to Allstate's Series J preferred stock issuance. The Rating Outlook is Stable.
The downgrade reflects declines in statutory capital and elevated financial leverage, compared to the rating sensitivities. Fitch expects environmental challenges in personal auto from persistently high loss severity trends to challenge Allstate's ability to return by YE 2023 to the strong risk-based capitalization levels that the company has historically maintained.
KEY RATING DRIVERS
Underwriting Performance: Allstate reported sharp underwriting result deterioration in recent periods, with a property/liability calendar-year combined ratio of 106.6% in 2022, compared to a prior five-year average of 92.3%. The decrease was primarily related to an auto combined ratio of 110.1%. Allstate's underwriting results continued to be challenged in 1Q23 with a combined ratio of 108.6%, leading to a GAAP net loss of $346 million due to higher losses driven by severity and frequency trends and higher catastrophe losses.
Allstate has historically been one of the strongest underwriters among major property/casualty (P/C) companies, with a history of favorable underwriting margins and stability. Improved financial performance in 2023 will continue to depend on the company's ability to get earned rate increases for auto business in excess of loss cost trends, across coverages.
How Underwriters Can Use Data to Gain Competitive Advantage
Executive Summary
Three experts spoke at Carrier Management's May 2023 InsurTech Summit about how insurance underwriters can use data to find their niche and exercise a competitive advantage in a fast-paced environment. They said unlocking the value of data in underwriting goes beyond simple data collection and means underwriters need to develop a system for organizing and using their data to introduce new efficiencies. They warned against the dangers of collecting too much data, and explored the uses for AI in helping insurers sort data faster and free themselves up for more complex tasks. Ultimately, they said, underwriters that use data well are the ones that will stand out in the future.
NOAA forecasts near-normal 2023 Atlantic hurricane season
The National Oceanic and Atmospheric Administration (NOAA) has forecast a near-normal level of activity during the 2023 Atlantic hurricane season, which officially commences on June 1st, 2023.
2023-atlantic-hurricane-season-forecast-noaaFor the upcoming Atlantic hurricane season, the NOAA says that there’s a 40% chance of a near-normal season, a 30% chance of above-average activity, and a 30% chance of below-average activity.
The organisation is expecting to see anywhere between 12 and 17 named storms form in the Atlantic, and of these, five to nine are forecast to become hurricanes, of which one to four are forecast to become major hurricanes, so category 3 or higher.
InsurTech/M&A/Finance💰/Collaboration
Nationwide Ventures Invests in Climate-Tech Startup Mitiga
The Barcelona based company uses science and technology to identify severe weather risks at a time when insurers are facing increased losses.
Nationwide Ventures, the venture capital arm of U.S.-based insurance and financial services provider Nationwide (Columbus, Ohio), has made an investment in Mitiga Solutions, a Barcelona-based climate-tech company, as part of its Series A fundraise. Mitiga combines scientific models with technology toward better evaluating the impact of natural hazards, helping insurance, real estate, energy, and financial companies understand and address the risks and uncertainties of climate change. Nationwide’s portion of the funding comes from its $350M venture capital investment fund. Nationwide did not disclose the amount of funding.
Kin completes $860 million nat cat reinsurance program
Homeowners insurtech Kin Insurance has announced the successful completion of its reinsurance program for the Kin Interinsurance Network in Florida.
The program, covering the period from June 1, 2023, to May 31, 2024, offers extensive coverage of $860 million for natural catastrophes.
This reinsurance initiative provides protection up to a one-in-200 year first-event loss, significantly bolstering Kin’s ability to safeguard homeowners from the mounting impact of climate change.
TypTap Insurance President Talks About InsurTech’s First Profit, Future
When HCI Group’s TypTap Insurance launched in 2016, it created a buzz in the industry and some skepticism, due to the company’s plan to rely heavily on mapping technology and property data. This month, Tampa-based HCI announced that, after a few years of steady growth but a pause in writing new Florida policies, TypTap had turned its first profit — at least by generally accepted accounting principles.
The company’s before-tax net income for the first quarter of this year was almost $1.2 million, compared with a loss of $3.3 million for Q1 2022, according to a recent filing with the U.S. Securities and Exchange Commission. TypTap has about 50,000 policies in force in the state, a few thousand less than last year at this time. The company now holds about 100,000 policies across 13 states.
Carrier Management’s sister publication Insurance Journal sat down with TypTap President Kevin Mitchell for an update on the company’s financial position, when it may return to selling new coverage in Florida, the cost of reinsurance, and what the secret sauce has been in the company’s recent profitability. He declined to talk about HCI’s new Florida property insurance startup, Tailrow Insurance Co.
AI in Insurance
How Emerging AI Could Impact Insurance Sector
Among the many new technologies to enter the public domain in recent years, generative artificial intelligence (AI) feels especially futuristic. Unlike traditional AI systems that recognise patterns and make predictions – such as what programmes you might enjoy watching on Netflix, for example – generative AI creates new content in the form of audio, video and text. It’s helping data scientists across sectors envision many new possibilities for improving how we do work.
In a recent webcast, Mano Mannoochahr and Girish Modgil, two data science leaders from Travelers, addressed the potential that AI tools offer insurers, brokers and insureds alike – as well as the risks that users of this technology must bear in mind.
First, here’s a little about how generative AI works.
Events
DIGIN | June 5–7, 2023 | San Francisco, CA | Marriott Marquis
Only 10 days to Register for DIGIN.
Join the 800+ Leaders Community in San Francisco To Shape the Future Of Insurance.
In-Person & Online. Combat Future Challenges. Discuss Solutions. Develop Strategies. Network With Leaders.
Featuring high-level think tanks, engaging workshops, deep-dive roundtables, Digin is thoughtfully curated to provide actionable insights and networking. With an unrivaled level of interactivity, it's where the insurance community connects and collaborates to address the industry’s digital evolution,
At DIGIN, the most knowledgeable experts dive deep into customer experience, insurtech partnerships, competitive pressures, regulatory changes and more. You’ll leave with fresh strategies for differentiating your products and services from competitors to gain market share and grow revenue. You’ll also explore the latest cutting-edge solutions and technology that will help your organization improve customer experiences, drive loyalty and increase operational efficiency.
People
Davies Insurance Tech Group Names Jen Morrissey COO
Nashville-based Davies Group, a rapidly growing professional services and technology firm serving the insurance industry, has named Jen Morrissey group chief operations officer.
Morrissey was previously chief information officer with Unison Risk Advisors and was with Willis Towers Watson before that, the group said in a news release. She will now report to Dan Saulter, group CEO, and will head up Davies’ global technology, mergers, procurement and real estate functions.
Davies said it has more than 1,500 insurance, financial and other clients, providing technology for claims, underwriting, distribution and other areas.
The hire comes three months after Davies announced a reorganization that aligned its global operations across three business units.