News
![Autonomous Vehicles Are Coming to a Street Near You. How Will We Insure Them?](https://dxj7eshgz03ln.cloudfront.net/production/link/image/868223/original_ratio_extra_large_baacdad8-2a80-4eb3-9f40-57a848387310.jpg)
Autonomous Vehicles Are Coming to a Street Near You. How Will We Insure Them?
As AVs continue to improve, the push to adopt them will grow stronger, and insurers will lead the way — but issues surrounding product safety and liability are yet to be resolved.
The promise of cars that drive themselves has been just over the horizon for years now — one of those breakthroughs that’s always coming yet seemingly never arrives. That’s changing, though, and rapidly.
“In the future, product liability exposure will need to be factored in when assessing liability in a loss,” said Joey Daryanani, vice president, CSAA Specialized Services, CSAA Insurance Group, a AAA Insurer.
“Ideally, this will need to be considered at the time the first notice of loss is reported. Given that, in most cases, less experienced personnel handle the initial claim intake, we will need to enhance training programs to include product liability, preservation of evidence and when to consider hiring an expert early in the liability investigation.”
While the prospect of charging into uncharted technological and legal territory may be risky, it’s not without promise.
In the short term, as the courts determine how liability will shift from drivers to manufacturers, we can expect some uncertainty (and volatility) to persist. “At this point, historical data is very thin,” Daryanani said. “Carriers will need to keep an eye on loss trends and be prepared to respond quickly.”
For AV manufacturers, “finding a trusted and nimble insurance partner is key,” Daryanani said.
“In my experience, we have had to keep the lines of communication open and better understand the autonomous vehicle company’s growth and risk mitigation strategy … I recommend brokers look for insurers (like Mobilitas Insurance) that are specifically set up and targeting the new forms of mobility. In addition, look for insurers that are already insuring autonomous vehicles today.”
David Agnew, associate editor, Risk & Insurance®
New Research Report: The Connected Decade: Insights Into What’s Driving Connected Living
Assurant’s latest annual Connected Decade research yet again highlights the importance of connected devices to consumers. The new Connected Decade report, which has been published annually since 2017, illustrates the criticality of keeping consumers connected.
The smartphone is regarded as indispensable, not only as a communications device, but also as a remote control to orchestrate other connected devices that span a growing ecosystem.
“It’s great to see the increased device usage and addition of new devices in the home in the wake of the heavy investments consumers made in connected devices during the pandemic. It clearly shows just how reliant we have become on our devices and the benefits that connected living provides,” said Jeff Unterreiner, President, U.S. Connected Living at Assurant. “As consumers hold on to their connected products for longer in the face of economic uncertainty, service providers and retailers have an opportunity to deepen relationships by offering support and protection solutions that give customers reassurance and peace of mind.”
![AIG and Farmers join other insurers in pulling back from climate and cat exposed property risks](https://dxj7eshgz03ln.cloudfront.net/production/link/image/868163/original_ratio_extra_large_a30bac74-3a9d-4c15-bf9e-d0dafb09d94d.jpg)
AIG and Farmers join other insurers in pulling back from climate and cat exposed property risks
Large insurers AIG and Farmers Group are pulling back from climate and catastrophe exposed property risks, joining other insurers that have either reduced or ceased offerings altogether in U.S. regions vulnerable to floods, storms, and wildfires, reports the Wall Street Journal (WSJ).
The publication has reported that AIG is planning to cut its offerings of homeowners’ policies in as many as 200 ZIP codes at high risk to floods or wildfires, including areas like New York, Delaware, Florida, Montana, Colorado, Idaho, and Wyoming. The carrier has already reduced new business in California, which is once again being heavily impacted by wildfires.
At the same time, reports the WSJ, Farmers Group has stopped offering new policies in hurricane-prone Florida, with the insurer noting historically high catastrophe costs and the impacts of inflation on reconstruction expenses.
Climate Change and Homeowners’ Insurance Are on a Collision Course
A summer that has already seen water crises and wildfire smoke is rapidly becoming an inflection point in the pitched battle between climate change and the price of homeowners’ insurance in the US.
American International Group Inc., which has already pulled back from new California business, is now set to curb home-insurance sales for affluent customers in around 200 ZIP codes across the US, including New York, Delaware, Florida, Colorado, Montana, Idaho and Wyoming. The decision was first reported in the Wall Street Journal on Thursday, citing people familiar with the company’s plans.
AIG’s decision comes on the heels of both State Farm and Allstate Insurance Co. announcing plans in recent weeks to stop writing new policies in fire-prone California. In Florida, meanwhile, the past 13 months have seen seven of 47 local property insurance businesses go under, and another 24 are now on a regulatory watch list.
Business and Technology Trends for Property/Casualty MGAs in 2023
While they’re not a new type of distributor, the way MGAs function in the market is changing. Here we share a few key trends to keep an eye on.
Managing general agents, or MGAs, are not just run-of-the-mill insurance agents—they are a type of retail or wholesale insurance distributor. Affiliated MGAs enable greater insurer agility by allowing them to place business with other insurers. MGAs can also allow insurers to take advantage of niche market expertise to expand their distribution and grow their business without building the necessary infrastructure internally.
And the benefits of MGAs have not gone unnoticed by insurance carriers: MGA business (measured in premiums) is growing faster than the overall property/casualty industry. While they’re not a new type of distributor, the way MGAs function in the market is changing. Here a few key trends to keep an eye on:
- MGA formation and consolidation are both increasing.
- Vendors are increasingly targeting MGAs
- Certain technology areas are higher priority than others.
To learn more about recent trends in the property/casualty MGA marketplace, including examples of recent MGA technology investments, read Aite-Novarica Group’s recent report Business and Technology Trends 2023: Property/Casualty MGAs. You can also reach me directly at skaye@aite-novarica.com.
Steven Kaye, Head of Knowledge Management at Aite-Novarica Group
InsurTech/M&A/Finance💰/Collaboration
![Pathpoint pipes away pain of small business surplus coverage](https://dxj7eshgz03ln.cloudfront.net/production/link/image/866636/twenty_by_nine_extra_large_8e39dc91-3751-4778-96aa-a697dfe8e5d4.jpeg)
Pathpoint pipes away pain of small business surplus coverage
Pathpoint's recent addition of Vave commercial property coverage to its excess and surplus (E&S) coverage quotes service is the next step in its efforts to reduce the pain agents experience when providing coverage in the space, according to CEO Alex Bargmann. Pathpoint operates as a digital wholesale intermediary or broker for E&S insurance.
"Placing small businesses into the wholesale channel is traditionally very labor intensive for agents," he said. "You're filling out lots of paperwork, there's an additional compliance burden, lots of emails. You might be dealing with multiple people at the wholesaler. And so a lot of times agents need to go to wholesale out of necessity."
Often, the E&S policy is one of a few that an agent may be writing for a small business at the same time, Bargmann said. Unlike other coverages, however, E&S policies can take longer to bind. This conflicts with insureds' motivations to get covered faster.
"Our value proposition is saving them a lot of time and a lot of pain that hits their bottom line," he said. "They can spend their time on selling and client services. It also helps them access this market more easily, in a compliant, very straightforward manner."
Pathpoint can handle more business with the partnership with Vave, which is a MGA and a Lloyds Coverholder underwriting U.S. surplus lines for property. Pathpoint can expand its auto-quoting for covering all-new occupancies like hotels and distributors, and doubles its total insured value limit from $2.5 million to $5 million.
Pathpoint launched in 2018 as an E&S underwriting software business but in 2020 pivoted to become a wholesale E&S intermediary, in part as a response to growth in E&S insurance. In January, Pathpoint received a $12.5 million in a funding round.
"The economy has gotten more complex and climate change has driven more property risk into the E&S market," Bargmann said. "That's been going for over 10 years, but it's coupled with a hard market cycle in the insurance market. In property, that specifically has driven even more business into E&S."
![Loro No-Code Insurtech Revolutionising Insurance Software](https://dxj7eshgz03ln.cloudfront.net/production/link/image/867272/original_ratio_extra_large_e9063e17-95fe-46c8-9819-e0845201674f.jpg)
Loro No-Code Insurtech Revolutionising Insurance Software
Loro, a provider of no-code technology for the insurance industry, has raised US$750,000 in seed funding.
The investment was led by prominent insurtech investor Markd alongside other key industry figures. The funds will allow Loro to continue its growth to data and enable the firm to continue developing its no-code technology solution. In addition, Loro will use the capital to expand its team, accelerate further product development, and drive adoption among insurers.
Its solution, which Loro describes as seamless and cost-effective, allows insurers or MGAs to quickly create, customise and deploy insurance products without any upfront investment. Loro provides the solution free of charge for the first US$100,000 of gross written premiums (GWPs) every year, incentivising insurers to adopt the platform.
Markd’s Parker Beauchamp says: "I love the Loro team. The founders are kind, hardworking and generous with relevant experience and, most importantly, a great network. Don't take my word for it; ask their customers."
Driver Technologies Raises $6M Strategic Funding Round
AI mobility safety company receives funding, co-led by IA Capital and CT Innovations, to create a safer driving experience.
Driver Technologies, Inc. (Brooklyn, N.Y.), an AI-based mobility tech company aimed at delivering a safer driving experience, has announced the closing of a $6 million strategic funding round led by New York-based investment firm, IA Capital, and CT Innovations, the venture capital arm of the State of Connecticut. Major insurers also participated in the round including, Liberty Mutual Strategic Ventures, State Auto Labs/Rev 1, as well as investors from The Social Entrepreneurs’ Fund, ID8 Investments, C2 Ventures and Kapor Capital. With the closing of this round, Driver Technologies reports that it has now raised more than $16 million.
Rashid Galadanci is Co-founder and CEO of Driver Technologies.
The latest round of investment will help fuel the continued adoption of Driver, the company’s top-rated AI-powered dash cam and safety alert app, into insurance-backed programs for commercial and personal drivers, according to a Driver Technologies statement. The company says that the funding will also be used to pursue direct integrations with insurance, automotive and municipal partners working to enhance road safety.
Anthony R. O’Donnell, Executive Editor, Insurance Innovation Reporter
Events
![LAST DAY to register for more than 40% off final ticket prices: ITC Vegas | Oct. 31 – Nov. 2, 2023 | Mandalay Bay, Las Vegas](https://dxj7eshgz03ln.cloudfront.net/production/link/image/868159/original_ratio_extra_large_0a664a96-b2c4-4642-8ef0-7de73563370a.jpg)
LAST DAY to register for more than 40% off final ticket prices: ITC Vegas | Oct. 31 – Nov. 2, 2023 | Mandalay Bay, Las Vegas
Today is your LAST DAY to register for more than 40% off final ticket prices
Secure ITC Vegas tickets at our early bird rate. Register by 11:59 pm US EDT on Monday, June 12, for more than 40% off final ticket prices and $400 off tomorrow’s pricing.
ITC Vegas will be held at Mandalay Bay, Las Vegas, from Tuesday, October 31 – Thursday, November 2, 2023.
Your pass grants you access to insurtech’s must-attend event, including thoughtfully designed opportunities to connect, spaces to meet, and chances to collaborate. ITC Vegas is the world’s largest gathering of insurance innovation – offering unparalleled access to the most comprehensive and global gathering of tech entrepreneurs, investors, and insurance industry leaders.
Hear from 250+ of the best minds in insurance — from CEOs of global insurers to founders of startups looking to reshape the industry.
AI in Insurance
Executive Viewpoint: Is Insurance the Hero AI Needs?
Executive Summary
Risk mitigations enable insurance, and insurance enables the acceleration of innovation, writes Monitaur CEO Anthony Habayeb, offering his perspective on how insurers can be heroes in the quest to understand and tame AI risks.
“Insurance should be the industry that leads all industries on demonstration of responsible and ethical AI governance,” he writes, noting that the measures insurers take internally aren’t just good business practices. They also position carriers to better evaluate—and backstop—the use of AI by other companies.
![ChatGPT and Generative AI in Insurance: How to Prepare](https://dxj7eshgz03ln.cloudfront.net/production/link/image/868364/original_ratio_extra_large_38985af6-dd3a-4f04-8149-a4f1359992b5.jpeg)
ChatGPT and Generative AI in Insurance: How to Prepare
ChatGPT, a conversational AI model built by OpenAI, is the most talked-about technology of 2023.
And it has piqued the interest of insurance industry leaders. But where exactly will ChatGPT, and generative AI broadly, have the greatest impact? And what are its most and least promising use cases?
Generative AI is set to revolutionize various types of insurance. Based on the impact of the technology in the US, property and casualty insurance will be the most transformed and health insurance will be the second-most impacted. However, life insurance is expected to be least impacted by generative AI, especially in the short term.
Over the course of the next three years, there will be many promising use cases for generative AI. The most valuable and viable are personalized marketing campaigns, employee-facing chatbots, claims prevention, claims automation, product development, fraud detection, and customer-facing chatbots. Although there are many positive use cases, generative AI is not currently suitable for underwriting and compliance.
While generative AI's rise was sudden, it will take time for insurers to fully embrace its power and potential. In the full report, we delve into the future of generative AI and provide actionable steps for insurance providers to prepare for its rise.
Insider Intelligence
![The Evolution Of Insurance In An AI-Driven World](https://dxj7eshgz03ln.cloudfront.net/production/link/image/868482/twenty_by_nine_extra_large_f9d8a78a-9bb4-41a7-9a4a-1ce22f578db9.jpg)
The Evolution Of Insurance In An AI-Driven World
We are all familiar with the axiom, “time is money.” As we go into the future, it is evident that time will come to hold so much more than monetary value alone. In the business world, time is used as a currency for the exchange of essential organizational commodities: customer loyalty, intra- and inter-organizational trust, the efficiency of processes and communication and more. While time and money are both fleeting, the intellectual and social capital accrued by an organization will remain engraved in the collective memories of customers, employees, partners and leaders for a considerable length of time.
Hence, I believe cultivating a distinct brand identity with an insignia of exceptional customer service is nonnegotiable.
Insurance’s Checkered Past
The insurance industry is one whose existence depends almost entirely on the goodwill of its customer base. But for too long, the industry has been plagued by complicated claims processes, anemic claim-to-settlement ratios and a lack of trust and accessibility. Going into the future, I believe AI will change all of that.
While the importance of AI has been impressed upon the leaders of insurance firms for quite a few years now, tailored AI-applied technologies are yet to permeate into core functional areas such as underwriting, claims handling, fraud detection, customer engagement and actuarial science.
The most covetable features of AI-based insurance solutions are the speed and accuracy with which they can execute time-sensitive, data-rich tasks. Combined with the sensitivity and confidentiality of the information that insurers handle on a daily basis, AI may be better equipped for keeping data breaches at bay than traditional firewalls and antiquated security systems.
Another lucrative aspect of AI adoption is the brand visibility it can fetch: Incorporating descriptive metrics about AI’s success into marketing campaigns can attract discerning customers, and something as seemingly simple as a quick and helpful AI chatbot session can help spread the word of brand’s service through the power of social media and microblogging.
Kannan Amaresh is SVP, Global Head – Insurance and Industry Head – Financial Services at Infosys
People
![Nathan Golia, Editor-in-Chief, Digital Insurance Announces His Departure](https://dxj7eshgz03ln.cloudfront.net/production/link/image/868165/original_ratio_extra_large_7aee0652-ede2-4be7-b8a6-ad8248d83577.png)
Nathan Golia, Editor-in-Chief, Digital Insurance Announces His Departure
[Editors' Note]
We wish Nate all the very best in the next step of his career and congratulate him on his contributions and collaboration over the past 13 years as he successfully navigated the rapid digital transformation of the insurance industry and the media covering it
Nate's Announcement published on DIG IN, June 9, 2023
Some personal news: After eight and a half years at the helm of Digital Insurance, I will be leaving. I'm not going far – I'm staying in the P&C insurance industry with a company many of you know. But this represents my final message in the role I've held for the bulk of my career, which is… quite a bit to think about!
I've written tens of thousands of words on technology and digital strategy in the insurance industry since I joined a now-defunct publication in 2010. I went there as an associate editor, after stops at other trades, trying to find a foothold in the media business. Eventually I was recruited to come here. Yes, as I reach this new phase in my career, I see I've found more than a simple foothold – I've discovered a support structure in the P&C insurance industry.
The story of taking a job in the industry and being surprised to learn to love insurance is one I've heard countless times as I've profiled leaders across the industry, and every year, related to a little bit more. I heard it during the talent and recruitment panel on day one of our latest Dig In conference, which just wrapped. I'm sure I'll hear it more as I continue my path.
And yes, there's a lot to find intriguing about this moment in insurance history. As the world seemingly becomes more risky every day, there's new opportunities to innovate and lead the way in solving those challenges for customers of all kinds.
But as I found myself evaluating my career, thinking about what might be my next step – it was the people in this industry who I thought about the most. It's all of you who create the welcoming environment that I and so many others have experienced.
Dig In's keynote speaker this year was Deepa Soni, CIO of The Hartford. In preparing to introduce her, I read her bio and saw that she oversees a team of a couple thousand, just in tech at The Hartford. Thousands of people – and that doesn't include everyone else at The Hartford, or at the other P&C companies, or the agencies and brokers of all sizes, or at all the other kinds of insurance and insurtech organizations out there.
When you zoom out like that, it sounds like a lot of people, an almost unfathomable amount. Yet, when we're together, we really experience this industry as a tight-knit community, right? A group of thousands, on its best day, all working toward the common goal of protecting each other and anyone else who signs up from the worst outcomes of their worst day.
I don't remember exactly when I first heard the term "noble purpose" to describe insurance's mission. But I do know that in the best examples of this industry's successes, it's felt. I've felt it more times than I haven't over the past 13 years covering it, and especially the past eight and a half in my first leadership role. It's made me feel welcome enough to continue my career there, rather than needing once again to find another foothold.
I've moved three times in the past seven years – New York to Utah to Texas to South Carolina. But insurance has been a home for me the whole time. I owe that all to you readers who have been so supportive of me and the team. Thank you for welcoming me into your inboxes over the past decade. I'm looking forward to the next phase of our relationship.
I'll drop by to say hello from time to time. See you… out there.
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