Commentary/Opinion
Safer Driving with OEM Data - The Floow
Tesla recently published on their website the new version (v2) of their driving scores (upgrading from v1.2). You will find “all” the mathematics and explanation here:
https://www.tesla.com/support/safety-score#version-2.0
Compared to V1, it is interesting to observe that 2 of the 3 new factors introduced by Tesla have long been used in our Floow scores (time of day and speed). The other new score is linked to unbuckled driving and is a good example of novel insights available from original vehicle data. Our recent new product, Floow Fusion goes one big step further, combining access to smartphone as well as vehicle data, with user consent diligently managed within the insurance app through a secure guided wizard, ensuring privacy and security.
As Tesla published all the mathematics behind their scores, we were curious to compare our decade-long experience with their scores and here are the results.
Antoine Paglia, Insurance Analyst, The Floow, an OTONOMO Company
News
Consumer Reports calls on 7 automakers to offer free ‘life-saving’ safety feature
Consumer Reports (CR) has launched a campaign to make the automatic crash notification (ACN) feature, which it says is “life-saving,” free in all new vehicles.
In a recent investigation, CR says it found that most automakers still require a subscription for ACN that can be more than $100 a year and if the fee isn’t paid, the feature will be disabled. The feature is now mandatory in all new cars sold in most of Europe.
CR found that 14 car brands — Acura, Audi, BMW, Ford, Lincoln, Genesis, Honda, Hyundai, Jaguar, Land Rover, Mazda, Polestar, Porsche, and Volvo — offer free ACN on at least some vehicles. Seven — Jeep, Kia, Lexus, Mercedes-Benz, Ram, Toyota, and Volkswagen — offer free trials of five years or longer. Tesla and Fiat don’t offer the feature at all in the U.S.
Using Technology for Accident Prevention and Claims Cost Reduction in Personal Auto
A new white paper by Aite-Novarica Group examines the role of technology and the beneficial impact of combining effective driver behavior modification with telematics and advanced driver assistance systems on auto insurance. The paper, "Using Technology for Accident Prevention and Claims Cost Reduction in Personal Auto," focuses on current technologies for crash reduction and the benefits of combining various strategies to help reduce auto claims.
"Many insurance companies already utilizing telematics are looking to combine other technologies to reduce skyrocketing auto claims costs and prevent vehicle collisions from happening in the first place," said Dr. Richard Harkness, CEO of ADEPT Driver®. "When our crash-avoidance training is paired with telematics and/or advanced driver assistance systems, our insurance partners and their customers see significant reductions in loss costs, accident frequency and bodily injuries. This is a win/win scenario for insurers and society."
ADEPT Driver® is recognized internationally for developing effective neuro-cognitive crash avoidance training and driving simulations that make drivers measurably safer and significantly reduce crash frequency and severity.
The white paper was produced by Aite-Novarica Group, an advisory firm providing mission-critical insights on technology, regulations, strategy, and operations to hundreds of banks, insurers, payments providers, and investment firms—as well as the technology and service providers that support them.
LexisNexis Risk Solutions: One-Third of a Carrier’s Business Could be at Risk Following the Auto Insurance Claims Experience
New research provides a 360-degree view of the customer claims experience to help insurers understand where dissatisfaction occurs and the correlation between policyholder satisfaction and retention.
LexisNexis® Risk Solutions, a leader in claims data and analytics for the insurance industry, today announced findings from its study examining the link between auto insurance claims and customer experience and retention. The study is comprised of two parts: consumer feedback from more than 1,400 insureds who experienced a claim within the past 12 months, coupled with an analysis of a customer’s propensity to switch auto insurance carriers post-claim. Findings have been published in the whitepaper, Exceeding Expectations or Falling Short? U.S. Auto Insurance Claims Trends, Insights and Impacts Revealed.
"We know consumers leave their insurance carriers following the auto claims experience, and we wanted to look at dissatisfaction from multiple angles to root out its causes,” said Tanner Sheehan, vice president and general manager, U.S. Claims, LexisNexis Risk Solutions. “First, we found that one-third of a carrier’s business is at risk following an auto insurance claim, and then we dove deeper to pinpoint which factors are triggering switching behavior."
Upon examining the results, LexisNexis Risk Solutions divided respondents into two distinct cohorts – consumers who weren’t planning to leave their insurance carrier, labeled as "Loyalists," and individuals who indicated they switched or considered switching insurers post-claim, referred to as "Flight Risks" – and then compared their experiences.
Top reasons some insureds shun electric vehicles
Despite the tax credits available to electric car owners or the opportunity to reduce one’s carbon footprint by going electric, many people in the U.S. remain wary of shifting away from traditional vehicles, according to ValuePenguin.
Researchers at the insurance-comparison website recently surveyed 2,000 consumers in the U.S. to determine their attitudes toward electric-vehicle adoption. The research indicated that more than one in three U.S. consumers are concerned about the cost of electric vehicles, and 40% of respondents questioned their safety as compared to gas-powered automobiles.
The slideshow above illustrates the top reasons that some consumers remain wary of electric vehicles, according to ValuePenguin.
“Americans aren’t ready for widespread EV adoption,” ValuePenguin insurance expert Divya Sangameshwar said in a recent article about the survey results. “It comes down to the complicated math behind EV ownership. EV proponents argue that EVs are cheaper because they’re cheaper to fuel and maintain — especially when gas prices are high. But the premium pricing of EVs leads to a very understandable hesitancy to buy one.”
Perhaps most disconcerting to individuals who view electric vehicles as a proactive response to climate change: Many consumers make up their minds about electric-power automobiles based on their political preferences. Roughly one in five Democrats would consider buying an electric vehicle, according to ValuePengin, but just 6% of Republicans share that enthusiasm.
“Americans’ distrust of full self-driving technology could partially come from the fact that it’s still, for the large part, unregulated,” Sangameshwar added. “Although that might be changing soon as federal regulators are taking a closer look at the safety of vehicles with full self-driving features.”
Over $150bn in fees and commissions earned from insurance broking activity in 2022
Worldwide, total fees and commissions earned from insurance broking activity in 2022 were worth over $151.4bn, up from around $137bn in 2021, according to Insuramore, a provider of marketing services focusing on the insurance sector.
This increase is equivalent to a growth rate of almost 10.5% without adjusting for inflation, but closer to 2% as an inflation-adjusted measure.
According to Insuramore, in 2022, this market is estimated to have broken down between around £68.8bn due to commercial P&C (non-life) retail broking, $14.6bn to private P&C (non-life) retail broking, $50bn to employee benefits plus life and health insurance retail broking, $6.4bn to reinsurance broking and $11.6bn to wholesale broking.
Each of the segments registered a double-digit growth rate during the year apart from employee benefits plus life and health insurance retail broking.
Without adjusting for inflation, the top 20 broking groups together achieved an even higher aggregate growth rate of 11.7% albeit this was driven in part by M&A activity, analysts noted.
In terms of the value of its total broking revenues worldwide, Marsh McLennan ranked first among broking groups in 2022 and followed by Aon, WTW, Gallagher and Acrisure.
Heading the commercial P&C insurance retail broking segment is Marsh McLennan; the private P&C insurance retail broking segment is led by HUB; employee benefits activity plus retail broking of life and health cover by WTW; reinsurance broking by Aon; and wholesale insurance broking by Amwins.
“Overall, the top 20 groups are believed to have controlled 51.5% of total global broking fees and commissions in 2022 and the top 300 groups for 83.2%. Relative to the equivalent figures computed for 2021 (namely, a respective 50.7% and 79.4%), this shows that there has been some consolidation in the market structure; this is due both to M&A activity and to the strengthening of the US dollar against most global currencies during 2022, causing US-based groups to achieve a higher weighting within the worldwide ranking,” said analysts.
US Commercial Insurance Revenue Growth, Profits to Moderate in 2023
The U.S. commercial lines insurance segments are being challenged by slower revenue growth, inflation-based claim uncertainty and less favorable loss reserve experience, Fitch Ratings says. We project the sector will see a combined ratio of 97%–98% for 2023 vs. 96% in 2022. While commercial lines reported statutory underwriting profits in four of the last five years, net written premium (NWP) growth is likely to slow in 2023 to 6%–7% YoY, vs. 10% in 2022 and 15% in 2021.
An unprecedented four-year hardening phase of the commercial lines underwriting cycle will continue through 2023. The Council of Insurance Agents & Brokers’ (CIAB) commercial lines market survey indicates overall rates rose 8.8% in 1Q23, compared with 6.6% in 1Q22.
Rate momentum since 2020 was boosted by pandemic-related socio-economic uncertainty, followed by subsequent persistently high inflation. Although pricing trends showed signs of moderating in early 2022, weaker loss experience and higher reinsurance costs are leading to a 2023 rebound in pricing momentum in property lines and, to a lesser degree, in the auto segment.
Workers’ compensation continues to post the best product segment underwriting profits, with an average combined ratio of 89% from 1998–2022. Strong premium growth in 2022 from exposure changes, falling claims frequency and highly favorable reserve experience bolstered recent performance.
Farmers Insurance faces flak after return to office call
After California-headquartered Farmers Group, a leading insurance company, announced last year that the majority of their employees would transition to remote work, many individuals took advantage of this new policy. Some sold their vehicles, while others expanded their home offices or relocated their families to different cities.
However, like many bosses, the recently appointed CEO Raul Vargas, has decided to reverse this approach. He now mandates that the majority of Farmers 21,000 employees must work in the office three days a week.
The announcement, however, has been met with howls of outrage. The company's internal social media platform has been flooded with over 2,000 comments, the majority of which express negative sentiments or feature crying and angry emojis.
Numerous employees have expressed their willingness to quit their jobs on the forum, while others are advocating for unionization. One worker specializing in medical claims voiced their disappointment on the internal network reported the WSJ, stating, "I was hired as a remote worker and was promised that was the company culture moving forward. This is seemingly a power move that is frankly disgusting."
Another employee in the claims division shared, "I sold my house and moved closer to my grandkids. So sad that I made a huge financial decision based on a lie."
CEO Raul Vargas clarified his decision in an email, emphasizing the importance of in-office work for collaboration, creativity, and innovation.
Vargas believes that the company can combine the advantages of flexible and virtual work with the benefits of teamwork and collaboration in the office. He hopes this approach will offer the "best of both worlds."
Following the outpouring of comments he sent a further email that said ‘We read all your comments. We understand and we appreciate them. But we’re still moving forward’.
Citizens Seeks Florida Rate Hikes as Depopulation Crawls Forward
Although Florida’s Citizens Property Insurance Corp. is planning to shed some policies in its depopulation program, the property insurer of last resort still anticipates it will continue on its growing policy count.
Citizens Chief Executive Officer Tim Cerio, speaking at a hearing with the Office of Insurance Regulation on Citizens’ rate increases, said Citizens estimates it will see its policy count rise to 1.7 million by the end of 2023 from about 1.3 million now. Increasing policy numbers also increases the threat of assessments that could be imposed on most property/casualty policies throughout the state, he said.
Cerio said Florida’s crippled property insurance market is still being impacted by litigation expenses and high reinsurance costs. Hurricanes Ian and Nicole last year also resulted in a 33% reduction in Citizens’ surplus, he said.
5 Breakthroughs In Smart Home Technology In 2023
Smart home tech advancements are likely to continue as more and more consumers adopt the various devices and upgrade their current ones
It seems like every day, there is an announcement about a breakthrough that has been made in technology. Recently, this has been especially true for smart home tech. These advancements are likely to continue as more and more consumers adopt the various devices and upgrade their current ones. What’s more, 60% of surveyed Americans reported that their smart technology made a positive impact on their lives.
What Is Smart Home Tech?
First, it is important to understand what smart home technology is and its purpose. Smart home tech is appliances or devices that can be automatically/remotely controlled via an internet-connected device. This typically includes devices like thermostats, and lighting and entertainment elements. Additionally, many kitchen appliances now have smart capabilities as well. Regardless of what the device is or its specific purpose, smart technology is typically used for convenience, safety, and efficiency.
Here are five breakthroughs in smart home technology we’ve seen so far in 2023:
- Rently Tours App and Rently Tour Manager App
- GE Appliances
- Matter
- Vivint – Home Security
- Use for Senior Citizens
Conclusion
It is clear that smart home technology will continue to advance, and people will reap its benefits, although we are still far from total automation within our homes. Regardless, mobile remote controls, product coordination, voice commands, and health and wellness monitoring breakthroughs are all accomplishments to celebrate despite the challenges of software bugs and cybersecurity concerns.
AI in Insurance
Insider in Full: ChatGPT and insurance part two – A realist's guide to the risks
It's easy to wonder how many inadvertent data breaches there could have been across the insurance industry, or near misses, when employees began to experiment
As Insurance Insider canvassed the views of CROs, InsurTechs, lawyers and consultants, the risk of a data breach was among the pervading issues that emerged as they laid out the risks and oversight measures required for any firm piloting ChatGPT or similar AI tools.
Insurance firms are still examining the full implications of the advent of ChatGPT and other generative pre-trained transformer (GPT) models – essentially the tech that enables chatbots to provide human-like answers.
In this second of a two-part analysis on the proliferation of these models – also described as large language models (LLMs) – this publication explores the risks inherent in using them, after part one set out the use cases.
Sources explained that a hierarchy of risks comes wih using ChatGPT.
Whether it's being used in a pilot or live environment, a potential major data breach whereby sensitive policyholder information inadvertently ends up in ChatGPT's data universe is number one on this hierarchy.
Each individual this publication spoke to warned that when information is fed into the chatbot, it joins the vast corpus of data ChatGPT can trawl for future queries by any user. The data is stored for 30 days and then deleted.
In the broader corporate world beyond insurance, this wasn't a huge concern for many early adopters trying it out.
Data security firm Cyberhaven recently published a study showing that on April 12, its product detected a record 6,352 attempts to paste corporate data into ChatGPT per 100,000 employees. Only weeks ago, Samsung banned all employees from using ChatGPT after an embarrassing story broke that staff were feeding in confidential data, including source code for debugging and transcripts of internal meetings for summarization.
As one CEO noted, the biggest fear is the ability to control what data staff are feeding into free-access tools like ChatGPT, among a headcount of tens of thousands. Notably, CROs of London market firms told this publication that several months ago, they had instructed all staff not to enter any personal or sensitive information into ChatGPT if they were trying it out of curiosity.
The data protection risks are heightened when firms begin to push blocks of data into ChatGPT to determine how best to mine it.
Doug McElhaney, a partner at McKinsey who leads transformational programs in AI and analytics for insurance firms, said: "Generally the only safe way to perform that kind of task is to license an independent version of a GPT model, or use an integration from a tech vendor, and then deploy it on an isolated protected data set within a private cloud infrastructure, and then carefully push the data in.
“Even then, an organisation should strip this data down to minimise the risk of any sensitive information being incorporated in that data.”
One executive highlighted that once any sensitive data is entered into ChatGPT, many firms could find it very difficult to extract that information back out, or delete it, once a GDPR issue is discovered.
InsurTech/M&A/Finance💰/Collaboration
Indigo Insurance Launches Liberate Digital FNOL
Indigo Insurance has gone live with Liberate Innovations Inc. (Liberate) low-code SaaS platform, automating its auto insurance First Notice of Loss (FNOL) workflow.
Digital FNOL automation is a top priority for Indigo. The tech-forward, customer-centric P&C insurance carrier sought an experienced partner that could quickly and easily launch a digital self-service FNOL, eliminating the need for emails and data entry, by seamlessly populating their core system with FNOL data. In addition, they needed a team that could manage implementation for them, without overburdening their limited IT resources.
“As a digital insurer, we feel it’s important to facilitate a modern customer experience,” says Nick Brierly, Indigo’s Chief Operating Officer. “In addition, we wanted to lay the groundwork to begin making automated claims decisions,” he adds.
Liberate quickly emerged as a top digital FNOL contender, thanks in part to their deep understanding of insurance. “Sometimes when you work with tech teams, you have to spend hours educating them about the insurance business. That isn’t the case with Liberate. During implementation, they saved us a lot of time because they already understand insurance processes – in fact, they’ve been able to handle 75% of project implementation with very little involvement from us,” explains Brierly.
Canada
Auto insurers pay out record amount for auto theft
Canadian auto insurers more than an estimated $1 billion for auto theft in 2022, the most they've ever paid for auto theft in one year
Supply chain issues are creating a hot domestic market for stolen vehicles, which in 2022 cost Canadian property and casualty auto insurers more than an estimated $1 billion — the most the industry has ever paid for auto theft in one year.
“The industry in Ontario paid more on vehicle theft claims in the first half of 2022 than in total for 2020, and the national trend data anticipates losses will continue to grow,” says a new report by Équité Association.