Generative AI: Coming Faster Than You Think  May 31st 2023

The U.S. insurance landscape: The good, the bad and the ugly

The insurance industry plays a critical role in safeguarding individuals and businesses against financial risks. Since the turn of the century, rapidly advancing technology has catalyzed permanent changes within the industry and, as a result, has left insurers seeking to manage change on all sides.

With this in mind, earlier this year, AutoRek published its 2023 Insurance Industry Outlook, which sought to examine the good, the bad and the ugly issues facing the industry.

The good news for U.S. insurers is that they report healthier margins than their UK counterparts. Almost three-quarters (72%) of U.S. firms are profitable, compared to just over half in the UK (54%). Over one-quarter (28%) of firms in the US are highly profitable.

However, while U.S. firms might be winning the race when it comes to profitability, that doesn’t mean the road ahead is smooth. There are plenty of ugly bumps and an unhealthy reliance on outdated technology.

Looking back

Over the last two years, the main focus for U.S. insurers has been customer experience, acquisition and retention, as well as back and middle-office optimization.

As with most customer-based industries, the rapid change in customer expectations has been difficult for insurers. The arrival of the SoftBank-backed insurtech Lemonade eight years ago — along with the rise of Amazon — completely overhauled how customers “shop” for insurance and the level of service they expect from their insurance provider. This sparked a riptide of change across the industry and took customer service expectations to levels not previously seen or imagined.

As part of this, firms have recognized the importance of a more personalized, seamless and digitally-driven service and, where possible, have sought to provide this to policyholders.

Piers Williams is the Global Insurance Manager at AutoRek

Progressive out front on commercial auto rate hikes in Q1 2023

The Progressive Corp. continued to increase commercial auto insurance rates during the first quarter of 2023, according to an S&P Global Market Intelligence analysis.

Overall, Progressive and its subsidiaries received approvals for 17 rate hikes across 15 different states during the quarter. The aggregate of the calculated premium change for the filings is $102.5 million.

Progressive County Mutual Insurance Co. received the most significant increase during the quarter with a $68.1 million calculated premium change after a 5.3% bump in Texas. This rate increase went into effect Dec. 21, 2022, for new businesses and Jan. 27, 2023, for renewals and is expected to affect nearly 130,000 policyholders.

Texas regulators busy in Q1

Texas regulators were busy during the first quarter, with the Lone Star State approving 58 commercial auto rate hikes totaling $125.7 million in calculated premium change.

Caliber Signs Enterprise Agreement to License Mitchell Cloud Estimating at All Locations

Mitchell, an Enlyte company and leading technology and information provider for the Property & Casualty (P&C) claims and Collision Repair industries, and Caliber Collision, the nation's largest auto collision repair provider, today announced that they have signed a multi-year, enterprise licensing agreement. The agreement gives all current, and future, Caliber locations access to Mitchell Cloud Estimating, Integrated Repair Procedures, a Paintless Dent Repair (PDR) Calculator and miScore. It also includes enhancements to the company's software solutions and data analytics designed to better assist Caliber in monitoring center performance and meeting the needs of both insurers and policyholders.

"Mitchell's focus on innovation and support of proper and safe repairs are the perfect complement to Caliber's purpose of Restoring the Rhythm of Your Life® for customers nationwide," said Caliber Chief Client Officer, Shawn Hezar. "This agreement ensures that we will continue to exceed customer expectations by delivering safe, efficient and accurate repairs, while also assisting a growing network of carriers with their direct repair programs."

"Transitioning from single-location contracts to an enterprise agreement represents a significant milestone in our longstanding relationship with Caliber," said Debbie Day, executive vice president and general manager of Mitchell's Auto Physical Damage division. "We look forward to working alongside our largest collision repair client as Caliber expands its choice of insurance partners, gains new market coverage and reaches new customers."

Fired Root CMO Accused of Stealing Millions Spends ‘Lavishly’; Judge Appoints Receiver

According to court records, Root Inc’s former chief marketing officer – accused of stealing about $10 million from the company – has not made court appearances, spent money in violation of court orders, and has a bench warrant out for his arrest.

Judge Sarah D. Morrison in U.S. District Court for the Southern District of Ohio on May 10 issued a bench warrant for Brinson Caleb “BC” Silver after he failed to appear in court to answer a motion for contempt filed by Root Inc, parent company of Root Insurance, over Caleb’s alleged violation of a restraining order preventing or limiting him, his companies, or associates from spending money or selling properties or possessions Root said were bought with stolen funds.

Silver, employed by Root from November 8, 2021 to November 9, 2022 when he was let go as part of company-wide layoffs, was unable to get to a May 9 appearance because he was in the United Arab Emirates, according to court documents.

Root alleged in an amended lawsuit filed in February that Silver and others defrauded the insurtech of at least $9.9 million. Root said Silver “misused his position as CMO to steal breathtaking sums from Root through a three-step plan” that included payments to an outside advertising agency. These funds, totaling $13 million, were then transferred back to Silver via via Collateral Damage, a company owned by Silver and/or Silver’s sister Paige McDaniel. That firm then sent funds to others, including Eclipse, another company allegedly owned by Silver, who used the money to purchase luxury real estate in Venice, California and Miami, Florida, Root claims

A Predict & Prevent™ Approach Works When Tech Innovation, Underwriting and Risk Management Work Together

Unlocking the full potential of Predict & Prevent™ strategies takes teamwork.

We need insurers, tech innovators, policymakers, customers and others working together to create, test and launch solutions that stop losses in their tracks. It’s an exciting idea, but how do we make it happen?

Here are my thoughts.

First off, the role of technology innovators is crucial. There is an abundance of insurance technology increasingly capable of analyzing, identifying and quantifying risk in real time. But so far, the primary focus has been on using this data to enhance the efficiency of underwriting and claims.

It’s time to direct these efforts to also include Predict & Prevent strategies.

Insurers see the value in Predict & Prevent and have the power to drive change. They possess the necessary resources and motivation to identify and invest in emerging technologies that can prevent losses on a large scale.

Importantly, insurers can link these solutions with the risk managers responsible for managing these risks within their organizations.

Peter L. Miller, CPCU, MS, MBA, is president and chief executive officer of The Institutes Risk & Insurance Knowledge Group and a member of its Senior Management Team