News
Prescriptive analytics to drive over $100 billion growth in insurance industry by 2030: Aon
Aon plc, the global professional services firm, has released its Transformative Trends report, identifying prescriptive analytics as the leading megatrend with the potential to exceed $100 billion in gross written premium (GWP) by 2030 by applying machine learning and data influx to generate actionable insights for the re/insurance industry.
However, its interdependence on other trends necessitates strategic planning and careful implementation to maximise opportunities and mitigate associated risks, Aon noted.
The second most significant growth opportunity identified in the report is shared mobility. Encompassing shared autonomous vehicles, hailed vehicles, car sharing, and air taxis, this sector is projected to generate over $40 billion in GWP by 2030.
Intellectual property (IP) and the Metaverse are also highlighted as high-potential growth areas, with estimated GWP exceeding $20 billion each by 2030.
IP growth is driven by the global shift towards intangible assets, which were valued at approximately $60 trillion in 2022.
JD Power says new vehicles are becoming ‘more problematic’
New vehicles are continuing to decline in quality as automakers lean into complicated technologies and continue to integrate “known problematic” features into models, JD Power said in a new report.
According to its newly-released 2023 U.S. Initial Quality StudySM (IQS), problems per 100 vehicles (PP100) have seen a record increase throughout the past two years. This year, the average is 192 PP100 per vehicle, representing a 30-point increase from 2021, it said.
J.D. Power attributed the worsening scores to greater use of technology, “continued integration of known problematic audio systems” in new models, and issues with basic features such as cupholders and door handles.
Of those surveyed, 80% of owners said their new vehicles were equipped with forward collision, blind spot, and lane departure warnings as well as lane keeping assistance.
However, J.D. Power said that the number of people having problems with such advanced driver assistance systems (ADAS) has increased 1.8 PP100 year-over-year.
Should insurers prepare for a transportation revolution
The world has become more connected and data-intensive but only marginally smarter.
Cars are a good example. They've been connected for some time and are only now becoming more autonomous and contextually aware, capable of journey and self-management.
In this latest phase, manufacturers treat cars as ecosystems that manage everything from improving journeys to maximizing vehicle uptime and minimizing disruption. As a result, insurers are now faced with many opportunities and choices. With this comes threats and challenges in equal measure.
Rory Yates, SVP Corporate Strategy, EIS
Forbes Recognizes Mercury Insurance as One of the World's Best Insurance Companies for 2023
Mercury Insurance (NYSE: MCY)* has been recognized as one of the World's Best Insurance Companies for 2023 by Forbes** in the auto category, the first-time this award has been given to carriers.
Forbes partnered with independent market research group Statista to survey policyholders in countries around the world about auto, home and life insurance. The evaluation was based on policyholders' overall recommendations, their general satisfaction, and loyalty to a carrier. Additionally, those surveyed evaluated insurance companies with which they have had a policy within the last three years in five categories: advice, customer service, price, transparency and damage/benefit service. Overall, 20 carriers in the U.S. and another 108 around the world were recognized.
"Receiving a world's best insurance company designation is a tremendous honor, and it showcases the amazing work our team members put into creating fantastic customer experiences," said Gabriel Tirador, Mercury Insurance President and Chief Executive Officer.
"Mercury was founded in 1961 by George Joseph, who has always believed we should provide quality insurance products at an affordable rate, while also delivering outstanding service. This simple vision is at the core of everything Mercury stands for, and it's one of the many reasons Mercury continues to be acknowledged as one of the best insurance companies in not only the United States, but now the world.
The 2023 Forbes World's Best Insurance Companies Study conducted by Statista is based on the evaluation of 30,000 insurance policyholders' experiences in 15 countries with auto, home and life insurance carriers across the globe. The study was fielded from March through April 2023. Award recipients had to achieve a score of at least 70 out of 100 points, except for a few countries not including the U.S.
Few Homeowners Prepare for Weather Risks
Many homeowners lack even the most basic preventative measures, unaware of the risks they face, according to a new survey by Triple-I.
The 2023 Atlantic hurricane season officially started June 1 and is forecast to be a busy one, which is why homeowners need to prepare. Yet many lack even the most basic preventative measures, unaware of the risks they face, according to a new survey by Triple-I, in coordination with Munich Re.
The new report, Homeowners Perception of Weather Risks, provides insights into trends, behavior and how experiencing a weather event affects consumer perceptions of future events.
In the first half of 2023, Triple-I, in coordination with Munich Re, asked homeowners across the U.S. about their experiences with weather-related risks. Among the key findings:
- Twenty-five percent of respondents don’t expect to be affected by weather risks.
- Thirty-two percent report that they have been affected by weather in the last five years.
- Two primary ways to prepare for weather risk are: creating a home inventory and preparing an evacuation plan in case of emergency. Yet only 47% of respondents have a home inventory and just 52% have an evacuation plan.
- Thunderstorms are reported as the chief weather concern, with 54% citing it nationally. This concern includes flooding and tornados and varies by geographic region. The Midwest leads the area of highest reported thunderstorm risk, with 75% citing it, and the West reports the lowest proportion of concern, at 33%.
The Insurance Information Institute (III)
Events
Join Us at Connected Claims USA 2023 in Austin, TX (September 26-27, 2023), as Reuters Events Invites the Insurance Claims Community to the World's Largest Claims Event
Connected Claims USA 2023, Austin TX, September 26-27, 2023
The claims community is facing immense market pressures, grappling with the impacts of inflation, and navigating changes in the ecosystem.
Performance, efficiency, and reputation ratings are directly linked to how successful Carriers can be in handling claims and providing a seamless journey. This has a profound impact on an organization's profitability. To meet objectives for client retention, claims leaders must urgently prioritize providing exceptional service and improving CSAT scores.
To inform the strategy to tackle these challenges, claims leaders look to Reuters Events: Connected Claims USA 2023, the Insurance flagship conference hosted by Reuters Events, world-leading events organizer. Event website is here.
For the first time this September 26-27, the event is headed to the Austin Convention Center, TX, bringing over 700 attendees and 75+ senior speakers from the claims leadership teams of major US carriers.
This in-person event will bring together the decision-makers of the insurance claims community to gain valuable peer-to-peer insight, and provide attendees with the tools and knowledge to take back to their organizations.
Here is a look a a partial lineup of claims leaders joining us this September in Austin:
- Jim DiVirgilio, Chief Regional Claim Officer Americas & Head of U.S. Claims, AXA XL
- Paul Measley, Chief Claims Officer, Plymouth Rock Assurance Corporation
- Laila Brabander, Head of North American Personal Lines Claims, Chubb
- Lance Ondrej, SEVP & Chief Operating Officer, Germania Insurance
- Mike Fiato, EVP & Chief Claims Officer, Liberty Mutual
- Dan Moore, SVP Claims Shared Services, CNA
- Sean Burgess, Chief Claims Officer, Lemonade
- Carey Bond, Head of Claims, Americas, Lloyd's -Angela Delude, Head of Claims Strategy, MassMutual
- Adam Hoover, VP, Business Architecture and Innovation, The Hanover
- Niketa Patel, VP Claim Customer Strategy, Travelers
- Andrea Bessling, Insurance Claims Executive, Allstate
- Jon Thornton, VP Claims Strategy & Transformation, Westfield
- Charlie Wendland, VP & Head of Claims, Branch Insurance
- Cheri McCourt, VP Claims, Northwestern Mutual
And many more exceptional speakers
InsurTech/M&A/Finance💰/Collaboration
Insurtech: Hi Marley Adds Collaboration Hub To Insurance Cloud Platform
Hi Marley, creators of the only digital collaboration platform built for the P&C insurance industry, introduced Collaboration Hub, a suite of tools designed “to make communication and collaboration between policyholders, carriers and the rest of the insurance ecosystem frictionless.”
The Collaboration Hub, “part of Hi Marley’s claims platform, includes Multi-Party Texting and internal collaboration features such as notes, user tagging and mentions.”
In addition, Hi Marley’s mobile application improvements “ensure seamless claims interactions for field adjusters who must collaborate with customers or colleagues on the go.”
With Hi Marley’s Collaboration Hub, carriers “reduce inefficiencies in claims and service, while keeping policyholders informed and delighted.”
Hi Marley’s Insurance Cloud already “provides hassle-free texting for more than 70 P&C carriers and their policyholders.”
With the innovative new Multi-Party Texting feature, “coming this July, adjusters can add a spouse, child, local body shop, contractor or another service provider to a single SMS thread instead of dealing with frustrating, disjointed conversations.”
By bringing all relevant participants together with Multi-Party Texting, carriers can improve the claims experience “for the policyholder while drastically reducing cycle time resulting from communication lags across multiple channels.”
Mike Breslin, VP of Product at Hi Marley, said:
“Insurance conversations are highly complex, riddled with compliance requirements and the involvement of many parties; carriers are constrained and policyholders are frustrated. Unlike traditional SMS providers, Hi Marley is solving problems with communication AND collaboration – you need to solve both to transform customer and employee experiences and improve the bottom line. This is another example of our insurance focus helping improve customer outcomes.”
Omni:us is a global winner in Zurich Innovation Championship for its AI-Powered Digital Claims Adjuster Platform
omni:us, a leading provider of AI-powered end-2-end insurance claims automation solutions, has announced it is one of the global winners in the 2023 Zurich Innovation Championship for its ((Digital Claims Adjuster** platform.
Zurich Insurance Group (Zurich)’s global startup programme seeks to find the most innovative startups and to collaborate with them on solutions tailored to the needs of customers and the insurance industry. This year, a record 3,500 entered the competition. Zurich has selected omni:us as one of 13 global winners.
It will join the other winners in a four-month accelerator programme with Zurich, where they will test the viability of their initiatives and benefit from financial and non-financial support, including coaching from Zurich executives, in addition to advice from internal and external topic expert.
“We are honoured that Zurich has recognised the great benefits which our AI-powered end-to-end claim automation solution, the Digital Claims Adjuster, can deliver to insurance companies and their customers,” said omni:us Chief Executive Officer Thomas Hauschild.
“Zurich also recognised that our technology is scalable, and we know look forward to working with the Zurich team this year to demonstrate what value we can bring to their customers.”
IRL becomes first ever InsurTech-focused broker to enter the Lloyd's market
Innovative Risk Labs (IRL), a leading InsurTech specialist dedicated to launching, incubating and supporting start-ups in the insurance technology space, has secured a license to operate within the Lloyd’s market.
This “ground-breaking achievement” makes IRL the only exclusive InsurTech-focused broker permitted to conduct trade within the Lloyd’s market.
Under the leadership of CEO Ed Gaze, a very well-known figure within the industry, and former head of the Lloyd’s Lab incubation program, IRL specialises in the development and launch of InsurTechs in the UK and globally.
The company supports emerging companies to navigate the London market, while facilitating connections with underwriters in its network.
In addition, the broker has already secured Lloyd’s capacity for three InsurTech clients, slated for launch in the coming summer. These clients are based in diverse locations, including London and California.
“This milestone represents a true game-changer for IRL, enabling us to secure Lloyd’s capacity for InsurTech brokers and MGAs worldwide. With direct access to world-class innovative underwriters, we can now collaborate on new opportunities without the need for third-party brokers,” said Gaze.
Zurich and Aon-Backed Big Ticket Launches following Four Years R&D
The launch took place at the annual Airmic conference in the UK, where the platform’s potential to revolutionize the global commercial insurance industry was unveiled.
Big Ticket aims to address the challenges faced by risk managers, brokers, and carriers in the renewal process by providing a shared corporate data platform. The platform facilitates the secure exchange, innovation, and collaboration of exposure data among participants in the insurance value system worldwide. With instant data sharing and a comprehensive audit trail, the platform promises to transform the outdated and fragmented renewal experience.
Robert Bartlett, Co-Founder and CEO of Big Ticket, highlighted the digital innovation gap in the commercial insurance sector compared to other financial services. He emphasized that the insurance industry has lacked neutral digital infrastructure and an “open banking” model, which has been instrumental in driving digital innovation in banking and payments platforms.
By offering a faster, more efficient, and client-focused renewal experience, Big Ticket aims to empower customers and enhance stakeholder management. The platform boasts bank-grade data quality and security, placing clients in control of their own data.
Significantly, the platform is provided free-of-charge to risk managers and insurance buyers. Big Ticket expects to deliver annual operational savings of up to $25 billion during renewals across the industry.
Big Ticket’s founding partner, MasterCard, and Global Advisory Board members including Aon, Aviva, Oasis, Zurich, Pool Re, and Motive Partners have lent their support to the platform. Financial backing has also been provided by leading technology venture capital investors such as Fin Capital.
Ken Fraser, Co-Founder and President of Big Ticket, explained that the platform’s “API first” approach, enabling seamless connectivity across the entire commercial insurance environment. In addition to streamlining the renewal experience and creating a secure space for data sharing, the platform aims to provide clients with comprehensive insights into their risk landscape. It also has the potential to drive innovation and improve risk preparedness for emerging systemic issues like climate change.
Hagerty Raises $105 Million in Capital from Strategic Investors
Hagerty, Inc. (NYSE: HGTY), an automotive lifestyle brand and a leading specialty insurance provider focused on the global automotive enthusiast market, today announced that the company is raising $105 million in capital from existing strategic investors including State Farm, Markel Group and the Hagerty family.
This capital raise is comprised of $80 million of convertible preferred equity, which closed on June 23rd, 2023, as well as a $25 million commitment of long-term debt financing for Hagerty Reinsurance Limited. The funds will help support the company's profitable growth initiatives focused on serving the car enthusiast community. This includes evolving the company's risk appetite and core product to augment its offerings to current members and reach new members who represent 33 million enthusiast vehicles in the United States which is expected to drive meaningful written premium and operating profit growth over the coming years. The capital will also allow Hagerty to make ongoing technology investments that should drive operating efficiencies while improving customer facing interactions.
State Farm's Chairman, President and Chief Executive Officer Michael Tipsord said, "We are pleased to continue to grow our investment in Hagerty and help support their strategic business objectives as we prepare for the upcoming launch of our commercial relationship."
Markel Group's Chief Executive Officer Tom Gayner added, "Hagerty is an important partner for our insurance business, and we are excited to see them further expand their insurance offerings by finding new and innovative ways to serve automotive enthusiasts."
Hagerty's Chief Executive Officer McKeel Hagerty concluded, "We have been working diligently over the last six months to deliver improved profitability and margin expansion, while making the investments necessary to sustain our growth trajectory for many years to come. We believe that the additional capital positions us well during uncertain economic times to execute against our significant growth opportunities."
AI in Insurance
[Ed. Note: Highly Recommended] Sharing Our Field Notes: The State of Generative AI in Financial Services
The BCV fintech partnership shares our comprehensive perspective on how generative artificial intelligence is reshaping the financial services industry.
In this comprehensive piece, we’ll share what we’ve learned about generative artificial intelligence in financial services these last several months. You can use the following hyperlinked directory to jump around. Note that an * on a company’s name indicates it is a BCV portfolio company.
Setting the Stage
In January of this year, our partner Sarah wrote a piece considering the potential impact of the generative AI revolution on the financial services industry: “How Fintech Can Jump on the Generative AI Bandwagon.” At the time, the financial services ecosystem was eerily silent, even though ChatGPT had been released to the public a couple months earlier, and Twitter and articles all over the startup ecosystem were abuzz with grand prophecies of the profound impact generative artificial intelligence would have across the tech world
*Bain Capital Ventures**
AI’s Revolutionary Moment—PegaWorld iNspire Keynote 2023
Pega CEO Alan Trefler talks about the significance of generative AI, the emergence of the ‘autonomous enterprise’ and how the vendor sees itself as positioned to lead a revolution.
Sometimes chance is evolutionary and steady, but at other times it is revolutionary, disruptive and threatening to both vendors and the enterprises they serve, noted Alan Trefler, CEO of Pegasystems (Pega; Cambridge, Mass.) in his keynote at the company’s user group meeting PegaWorld iNspire in Las Vegas on June idea of creating a structure to organize the processes, the rules all the elements, the interfaces, the technology in a way that brought order to it, that allowed things to be shared but also compartmentalize certain parts so that you could have common rules and processes across the organization but specialization where that made sense.
Trefler emphasized the sudden prominence of generative AI (GenAI) in the technology discussion. He spoke of GenAI’s relevance within the broader topic of AI, spoke about how AI was giving way to what the vendor calls the “autonomous enterprise,” and how Pega sees itself as uniquely positioned to lead a kind of AI revolution.