Dangerous heatwaves strike globe as wildfires rage  July 17th 2023

Dangerous heatwaves strike globe as wildfires rage

Scorching weather gripped three continents on Sunday, whipping up wildfires and threatening to topple temperature records as the dire consequences of global warming take shape.

Predictions of historic heat hung over swathes of Asia, Europe and the United States.

The US National Weather Service warned a "widespread and oppressive" heatwave in southern and western states was expected to peak, with more than 80 million people affected by excessive heat warnings or heat advisories on Sunday.

California's Death Valley, often among the hottest places on Earth, is also likely to register new peaks on Sunday, with the mercury possibly surpassing 54C.

Southern California is fighting numerous wildfires, including one in Riverside County that has burned more than 7,500 acres (3,000 hectares) and prompted evacuation orders.

Severe Weather Causes First-Half 2023 Losses of at Least $1B in Seven States: Report

Seven states experienced at least $1 billion in total insured severe weather loss for the first half of 2023, according to an update from BMS Group.

Texas led all states with insured severe weather loss of $7.2 billion while Illinois, Kentucky, Colorado, Tennessee, Arkansas and Missouri also broke the $1 billion mark.

While London-based independent specialist insurance and reinsurance broker BMS credited socioeconomic elements as the primary driver of higher insurance losses from severe weather, states in the Central Plains experienced unusually active storms in the first six months of the year.

Texas recorded five severe weather industry insurance loss events in June, the most in that month in at least 13 years. June severe weather in Texas led to an estimated $2 billion in total insured losses, according to the report.

Using data from NOAA National Weather Service Local Storm Reports, BMS found that wind damage reports have been elevated for most of 2023, with a leveling off in June. The U.S. experienced a near-record number of tornadoes through the first three months of the year. A tornado outbreak March 31-April 1 left at least 32 people dead across nine states and caused significant damage throughout the Midwest and South.

P/C Market Won’t See Underwriting Profit Until 2024: S&P

After four years of unparalleled underwriting profitability ending in 2021, the property/casualty market is headed for a second straight year of underwriting losses, according to the newly released S&P Global Market Intelligence report.

S&P’s “2023 U.S. P&C Insurance Market Report” estimates a combined ratio of 100.8 for 2023. Though an improvement from the calendar-year 2022 result of 102.6, it’s still above the 100 profitability threshold, the report said.

“Dismal first-quarter 2023 direct incurred loss ratios in the homeowners and private auto business suggests a repeat of 2022, when highly favorable underwriting results in the commercial lines were more than offset by the personal lines losses,” explained Tim Zawacki, principal research analyst, S&P Global Market Intelligence (S&P GMI).

“We project a narrower, but still significant, gap between personal and commercial lines results will remain in 2023 as we anticipate that benefits from multiple rounds of private auto rate increases will lead to improvement in loss ratios for that embattled business line,” he said.

Fast Fact: Personal vs. Commercial

According to S&P GMI’s U.S. P/C Insurance Market Report, in 2022, there was a 15.5 point gap between a personal lines combined ratio of 109.9 and a commercial lines combined ratio of 94.4. The last time there was a double-digit gap between personal and commercial lines combined ratios was in 2001, when commercial hit 121.8 and personal came in at 110.9, S&P said.

S&P GMI projects “outsized growth” in personal lines direct premiums written of 12.7% and 8.5% in both 2023 and 2024, with personal lines combined ratios improving to 105.3 in 2023 and 101.4 in 2024, both down from 109.9 in 2022. The 2023 personal lines growth figure encompasses what S&P GMI believes will be the highest annual jump in private auto direct premiums in at least 25 years—and potentially back to the late 1970s or early 80s, the report noted.

Higher Reserving Uncertainties Could Sustain Hard Market Conditions: Report

Systemic shocks related to the recent pandemic, the war in Ukraine, natural catastrophe losses and elevated inflation have raised questions about reserve adequacy for property/casualty insurers, according to a Swiss Re report.

These recent shocks have pushed up claims and added to reserving uncertainties, which may lead insurers to reduce their risk appetite, new business capacity and require more premium to cover— factors that could extend or exacerbate the current hard market, said the Economic Insights report titled “Reserving: higher uncertainty puts adequacy in the spotlight.”

As a result of these uncertainties, direct insurance reserve releases in advanced markets are slowing after a decade of favorable progress, the report said, noting that insurers in response have increased the share of incurred-but-not-reported (IBNR) claims.

Is working for property casualty insurers a good career path?

Whether or not working with property-casualty insurers is a good career path depends on a range of factors. Find out if you got what it takes

Property-casualty insurers play a crucial part in helping individuals and businesses protect their hard-earned investments such as their homes, vehicles, and certain commercial assets. If you find this role intriguing, then you may be wondering, “Is property-casualty insurers a good career path for me?”

To help you in your decision, Insurance Business will walk you through the advantages and disadvantages of working under the property and casualty insurance line. This guide will also give you a rundown of the different career options you can pursue and what it takes to be successful. Read on and find out if working for property-casualty insurers is a good career path for you.

But first, what is property and casualty insurance?

Property and casualty insurance provides coverage for the things that individuals and businesses own. It consists of two parts that are often bundled into a single policy.

These are:

• Property insurance: Covers personal belongings including cars, homes, and commercial equipment Casualty insurance: Pays out for expenses incurred if a person or business is found liable for damages to another person or their possessions
• Property and casualty insurance, also called P&C insurance, comes in a range of specialties

OCTO Crash & Claims: Video Damage Evaluation opens up a new era of claim management

OCTO Crash & Claims solution marks a shift in the traditional way of managing crash and claim processes, moving towards a digital and innovative approach that integrates cutting-edge technologies and tools.

The solution has been developed with the goal of reducing claim processing times, mitigating insurance fraud, and optimizing the entire settlement process, while reducing overall costs. This represents a significant turning point in claims management and builds upon OCTO's expertise - gained over 20 years of innovation in telematics - in data analysis to identify, reconstruct and validate claims.

Artificial Intelligence plays a crucial role in accurately reconstructing a crash scene.

OCTO's technology is capable of automatically detecting crashes through onboard sensors and validating all related data using AI algorithms that are programmed to self-learn. These algorithms are continuously fed with new data from OCTO's real-time crash database, enhancing the accuracy of the crash analysis.

The interaction between the device installed in a vehicle and the OCTO platform enables the accurate detection and validation of car accidents, providing insurance companies with deep insights to understand crash dynamics. This transparent and efficient claims management process can lead to an overall improvement of 26% in claims management.

Aon Completes "Historic" Parametric Insurance Programme for Puerto Rico

The objective of this initiative is to help the island reduce its insurance obligation to the U.S. Federal Emergency Management Agency (FEMA) by providing diversified insurance protection against hurricane and earthquake perils.

The programme, which represents the largest government-sponsored parametric transaction for Puerto Rico, not only strengthens the island’s response to catastrophic events but also marks the first use of a parametric insurance protection mechanism to reduce FEMA’s Obtain & Maintain (O&M) requirement.

By implementing an onshore and offshore parametric program, Puerto Rico gains access to quick liquidity to support its recovery and reconstruction efforts.

The collaboration between Aon and the Government of Puerto Rico demonstrates a proactive approach to address the protection gap and find capital solutions.

Led by Paul Schultz, Chairman and CEO of Aon Securities, a cross-functional team consisting of subject matter experts, professionals from diverse geographical locations, product teams, and analytics specialists worked together to design and deliver an optimized parametric solution tailored to the government’s needs.

Unlike traditional insurance coverage, the parametric program does not require proof of loss to initiate a payout. Instead, payouts are automatically triggered when a major hurricane or earthquake exceeds a predefined threshold, allowing for faster access to critical funds.