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Top 6 insurance claims transformations in 2023: Dig-In Interview with Alan Demers and Stephen Applebaum
Insurance claims organizations are facing unprecedented combined pressures of supply chain and talent shortages, inflation, catastrophe cycles and more. That's changing the nature of the position, says Alan Demers, president of Insurtech Consulting LLC.
"When you're in that head seat, you're [generally] focused on three main things in some balance: customer satisfaction, loss cost, and loss adjustment expense," Demers says. But now, he adds, "all chief claims officers are being asked, 'How do you create more efficiency? Where are you on the claim automation track? How much technology have you adopted?' The convergence of all that together is what, in my mind, makes this situation very different from previous cycles."
Alan Demers
It's not all bad news though.
The digital transformation happening across insurance is also aiding claims leaders. While fully automated claims are rare in most common lines of insurance business, the practice has made significant advancements in the past two years, says Stephen Applebaum, managing partner of Insurance Solutions Group.
He and Demers shared what they believe to be the six most impactful recent transformations in a joint interview with Digital Insurance.
Is blockchain finally coming for the insurance industry?
Blockchain has frequently been touted as having the potential to revolutionize the financial services industry. The technology has a wide range of potential applications, but will 2023 be the year it finally changes the game for insurance?
Perhaps most frequently associated with cryptocurrency, blockchain is a decentralized digital ledger that records transactions and tracks access across a network of computers.
Blockchain has the potential to create an environment of trust for insurers by providing a network with controlled access and a way to share valuable information securely, according to Marlene Dailey (pictured), financial services senior analyst at RSM US, a tax, audit, and consulting firm.
“The great thing about blockchain is that it can have a transformative impact for the insurance industry,” said Dailey. So many insurers today are still slow to adopt this technology, but we are starting to see more and more companies create different proofs of concept and start to leverage blockchain in different ways.”
Marlene Dailey, financial services senior analyst at RSM US
Imagine 23: Sedgwick looks ahead to this year's industry trends
Sedgwick, a leading global provider of technology-enabled risk, benefits and integrated business solutions, has released its "Imagine 23" report of major industry trends and issues that employers, brokers, carriers, risk managers, human resources professionals and product safety experts should be aware of throughout the coming year.
"We're living in a world of constant change and evolving challenges," said Kathy Tazic, managing director, client services at Sedgwick.
"We believe there is opportunity to imagine the possibilities for growth and embrace change so we can best serve our global client base. Our trends analysis this year is just the starting point as we forecast and follow issues that matter to our industry, share ideas, and offer support and solutions around the world."
For Imagine 23, Sedgwick's experts and thought leaders focused on 23 essential trends to watch in the year ahead; the company will continue to monitor their impact on the industry throughout 2023. These trends align with Sedgwick's focus on the pillars of people, property, brands and performance
20 Issues to Watch in 2023
While there are certainly more than 20 issues to discuss, here are high-impact matters relating to workers’ comp, healthcare and risk management that need more attention.
Out Front Ideas with Kimberly and Mark kicks off the year with our popular 20 Issues to Watch webinar. While there are certainly more than 20 issues to discuss, we focused on the high-impact matters relating to workers’ compensation, healthcare and risk management that need more attention. These are essential issues for every risk manager and insurance professional to monitor in 2023.
Kimberly George, SVP Healthcare Adviser, Sedgwick and Mark Walls, VP Client Engagement, Safety National
Price Worries Drive Telematics Demand
Hard-pressed consumers are switching because they can save upwards of $200 to $300 per policy term every six to 12 months by switching to a telematics-based policy.
Allstate, GEICO, State Farm… where are customers going amid increased auto insurance shopping?
J.D. Power has published the latest edition of its auto insurance quarterly shopping trends report, and found that in the fourth quarter of 2022, there was actually a noticeable increase in auto insurance shopping activity in America.
The report – produced by J.D. Power in partnership with TransUnion – suggested that consumers have taken note of the historic rate increases their insurers have been making, forcing their hands to shop for better deals. For Q4 2022, the shopping rate was observed to be at 12.1%, characterized by a busy shopping month in November, which eventually cooled down by December.
According to J.D. Power, US auto insurance shopping activity during Q4 2022 was so high, that the numbers are some of the highest it has seen in the 2+ years it has been doing these reports.
Shopping for auto insurance was not the only thing that increased in the last quarter; switching rates also jumped during the period. The report found that just over 4% of auto insurance customers indicated that they switched their carriers.
Major car insurance companies getting out of California - CBS Los Angeles
Major auto insurers are pulling back in the California marketplace because they are saying our drivers are just too expensive to insure.
Californians are driving about as much as they were before the pandemic, but apparently not as well.
Auto accidents are up and some insurance companies say they are paying out more than they are taking in. But, the insurance commissioner says the facts don't support their claims.
From 2020 to 2021, auto insurance losses spiked 25% while premiums increased by only 4.5%, according to the American Property Casualty Insurance Association. The rate and severity of auto accidents are up as well as the costs to cover them.
"The cost to rent a car is up 33% and the cost for a new vehicle is up 11%," said Denni Ritter, American Property Casualty Insurance Association.
Travelers sees ‘very strong’ insurance pricing environment
Travelers Insurance Cos. Inc. Chairman and CEO Alan Schnitzer said Tuesday that the insurer secured significant price gains over the past two years and it expects similar conditions this year.
Speaking on a conference call with analysts Tuesday to discuss the company’s fourth quarter 2022 results, which as it previously announced showed a sharp fall in profit due to catastrophe losses, Mr. Schnitzer said Travelers saw double-digit renewal premium increases over the past eight quarters.
“I think it's hard to characterize this pricing environment as anything other than very strong,” Mr. Schnitzer said.
Travelers reported a 10.1% increase in renewal premium in the quarter, which includes changes in rate and insured value, he said.
InsurTech/M&A/Finance💰/Collaboration
Zendrive announces the addition of Progressive Insurance to its Insurance Qualification Lens (IQL) program
Zendrive’s IQL program enables millions of drivers to potentially earn discounts on their auto insurance for safe driving while unlocking new revenue streams for top consumer apps.
Zendrive, a mission-driven company making roads safer with data and analytics, announced today that it is partnering with Progressive, one of the largest insurance carriers in the US and a leader in usage-based insurance (UBI), to expand its Insurance Qualification Lens (IQL) program. This addition to the program comes after Zendrive announced that it has expanded IQL’s reach to an additional 50M users in the US by joining forces with leading consumer apps.
Today, Zendrive’s network of top apps includes MoneyLion, Coin, Pogo, and dozens of others.
What to Expect: 7 InsurTech Predictions for 2023
The year 2022 was not kind to the publicly traded InsurTechs. But beyond that smokescreen, new and growing InsurTechs continue to drive innovation. Here are seven trends to watch in 2023.
Martha Notaras, General Partner, Brewer Lane Ventures,
InsurTech Spotlight: bolt CEO Values Thoughtfulness, Timeliness, Intent
Jim Dwane compared his experiences in insurance to learning how to play the piano.
When he first sat down at the figurative keys at Travelers and later at AIG, he watched his fingers as they learned to play the notes. As days turned into months, and years turned into more than two decades, his experience deepened, and his work became like second nature to him.
His eyes had long left the keys. He knew the ins and outs of his craft like a seasoned pianist. So, in 2020, when Dwane started his career at bolt, a property/casualty insurance exchange, he again set his sights on studying his work. He patiently let knowledge come to him. He absorbed the understanding of how bolt’s technology enables the insurance industry to succeed. He grasped how his company fit into the bigger scene of insurance distribution.
At-Bay Acquires Licensed P&C Insurance Carrier
At-Bay, the insurance company for the digital age, today completed the acquisition of At-Bay Specialty Insurance Company, a Delaware-domiciled excess and surplus (E&S) lines property and casualty (P&C) insurer licensed in 44 states, from XL Insurance America, Inc. Industry veterans Gregg Davis and Rob Glanville will join the newly acquired At-Bay Specialty Insurance Company as Independent Directors, bringing their combined decades of insurance expertise to the insurer.
“Becoming an insurance carrier further cements our commitment to build the next generation of insurance, and tackle the critical challenge of cyber and digital risk.” The move to a full-stack carrier will allow the company to better serve its policyholders and accelerate planned product expansion into additional specialty lines, as well as give At-Bay more control over the entire insurance value chain, while strengthening its commitment to the wholesale channel.
"This milestone will allow us to accelerate the pace of our innovation and better serve our broker partners and customers,” said Rotem Iram, co-founder and CEO of At-Bay. “Becoming an insurance carrier further cements our commitment to build the next generation of insurance, and tackle the critical challenge of cyber and digital risk.”
At-Bay currently offers Cyber, Technology Errors & Omissions (Tech E&O) and Miscellaneous Professional Liability (MPL) insurance through wholesale brokers and digital channels, and the company intends to start issuing policies via its carrier later this year.
Mile Auto Partners with Insurtech Trellis to Expand Distribution
Today, Mile Auto, an Atlanta-based, pay-per-mile auto insurance company, and Trellis, an insurtech enabling financial institutions, fintechs, and other partners to offer embedded insurance through its Savvy platform, announced a new partnership.
Mile Auto joins other leading insurance carriers leveraging Savvy to accelerate digital distribution. Savvy’s model creates value for the consumer by allowing them to integrate auto insurance – and other personal insurance (e.g., home) – with their other financial services. Savvy is an end-to-end API solution enabling consumers to instantly compare and purchase insurance within a service provider’s app or website. Using just their insurance login, consumers can compare their existing policy to prospective alternatives in a transparent, side-by-side manner.
The partnership provides Savvy access to Mile Auto’s pay-per-mile auto insurance, using patented computer vision technologies to help low mileage drivers save money. Mile Auto customers use their smartphone's camera to report mileage once a month, and then pay based on exact miles driven. >
“Customer experience and technology are at the center of what Mile Auto and Trellis do,” said Jim Cook, President and Cofounder of Mile Auto. “Our team is excited to partner with Trellis to offer consumers simple, transparent insurance, so they can only pay for the miles they drive.”