News
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Record investment returns push Chubb earnings up sharply
Chubb Ltd. reported second-quarter net income of $1.79 billion, up 50.7% from the year-earlier period, as record investment returns and strong commercial premium growth offset higher catastrophe losses.
The outlook for growth across its businesses in Asia-Pacific is “significant,” and in North America and other parts of the world Chubb sees opportunities to take on more property exposure amid the favorable rate environment, the insurer’s top executive said Wednesday while discussing the company’s second-quarter results with analysts.
“We had a simply outstanding quarter — in fact, another record quarter performance with double-digit premium revenue and earnings growth as a result of world-class P&C underwriting results,” Evan G. Greenberg, Chubb’s chairman and CEO, said on the call.
“As I look ahead, we again are confident in our ability to continue this pattern of growth in revenue and earnings and in turn drive double-digit EPS growth,” Mr. Greenberg said.
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Westfield Insurance leader expects property hard market going into 2024
Pressure continues to build in the property and auto insurance markets, and ‘hard’ conditions are likely to extend into 2024, according to one commercial lines leader.
“This is a period where carriers are seeing their loss trends increase, the reinsurance market is tightening, which creates the need to increase their rates,” said Troy Crawford (pictured), commercial lines product management leader at Westfield Insurance, which provides business property and liability, personal lines and agribusiness insurance.
“What you’re also seeing is a lot of announcements by insurance companies pulling back on the types of business that they’re willing to write. We see a lot of [these actions] geographically, such as in California, where a lot of carriers are pulling back.
“We don’t have any plans to do those types of actions, but I do expect that we’re going to continue to feel the hard market impacts going into 2024, particularly for property and auto.”
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Car Insurance Rates Spike 17% in the First Half of 2023; Another 4% Rise on the Way
The average annual cost of a car insurance policy surged $240 to $1,668 in the first six months of 2023, up from $1,428 in 2022. Prices will increase another 4% before the end of the year, according to Insurify’s latest auto insurance report. The report attributes these increases to insurers experiencing high losses as a result of soaring auto repair prices and the effects of climate change.
“Vehicle repair and maintenance costs have outpaced inflation and show no signs of slowing, leading insurers to increase auto insurance prices to keep up with the cost of higher claim payouts,” says Allie Feakins, Insurify’s senior vice president of insurance.
The report examines auto insurance price trends using Insurify’s own data of more than 79 million car insurance quotes, sourced directly from partnering insurance companies. It also reveals:
- Drivers are dropping coverage to keep car insurance costs affordable. The percentage of car insurance shoppers considering buying full-coverage car insurance fell more than 50% in 2023, compared to 2022.
- Michigan still has the highest auto insurance costs in the country, with an average policy costing $231 a month. Michigan drivers spend about 4.4% of their household income on car insurance – the highest proportion of any state.
- Car insurance prices have climbed the highest in New Mexico, Nevada, and New Jersey, with an average 34% increase in costs within the last six months
- Major insurers are pulling out of Florida and California, citing devastating hurricanes and wildfires that have led to heightened catastrophe risk and a high number of expensive claims.
A First Look at How U.S. Insurers Are Adopting Global Climate Reporting Guidelines
U.S. insurers are adopting numerous strategies to deal with risks from climate change, according to a review out today that gives the first look at how or if insurance companies are adopting the widely used Task Force for Financial Disclosure guidelines.
The review of Climate Risk Disclosure Survey responses, submitted to state regulators each year by insurers operating in 27 member states and jurisdictions, was conducted by climate leadership group Ceres and the California Department of Insurance.
This is the first year in which responses on the survey were aligned with the recommendations of the Task Force for Financial Disclosure (TCFD) guidelines.
TCFD has become a global standard since being introduced in 2017 by the Financial Stability Board, an international body that issues recommendations about the global financial system. The aim of TCFD is to improve reporting of climate-related financial information from companies.
Disclosure recommendations are structured around four pillars (governance, strategy, risk management, and metrics and targets). Within those recommendations are 11 recommended disclosures.
By including TCFD in the survey, it takes the U.S. insurance industry from a place in which no U.S. insurer had completed a TCFD report just four years ago to seemingly abundant TCFD reporting from 500 insurers.
“It gives an enormous amount of information,” said Steven M. Rothstein, managing director, Ceres Accelerator for Sustainable Capital Markets, and one of the report’s authors.
Not all participating insurers fully took to reporting – only 13% reported on all 11 TCFD points – but most provided a hearty trove of information, with 78% providing information on six or more of the 11 TCFD recommended disclosures, the Ceres report shows.
Do Property Insurer Priorities Match the Risk or the Customer Expectations?
Pressure is creating a climate for change in the restaurant industry. Coming out of a difficult few years, pundits would have expected restaurants to be in significant trouble. All of the same factors that are affecting insurers are similarly impacting restaurants. Talent is in high demand and not easy to find. Increased inflation is causing a re-ordering of customer priorities. At the same time, inflation is impacting supply costs for restaurants—both in food and food packaging. Ordering technology is shifting. Customers are even shifting the time of day they like to dine out.
But the pressure isn’t causing restaurants to go away; it’s just causing them to change. In fact, according to Yelp’s 2023 State of the Restaurant Industry report, business openings for restaurants rose nationally in April 2022-March 2023, over the previous year.[i] Shopping and beauty care are industries in decline, but consumer spending on dining is continuing to rise.
The real evidence of customer and business change in the industry, however, comes from viewing the types of restaurants that are opening and growing. (See Fig. 1). Pop-ups are by far the greatest growth sector, a sign that people are continually looking for new and original options in dining. Their needs are met by agile, entrepreneurial chefs and investors who have their fingers on the pulse of culture and cuisine.
Pressured by costs, talent, inflation, and changing customer preferences, the industry’s new leaders are those who moved quickly to create new concepts. Restaurants used to be known for their consistency, but the new restaurant culture is one where the only consistency is steady innovation.
Commentary/Opinion
[Ed. note: Highly Recommended] Impact Award Insights: Core Projects Are Diverse, but Prioritize Growth, Underwriting, and Cloud - Datos Insights
Last month, we announced the winners of the 2023 Datos Insights Insurance Technology Impact Awards. This month, I’m writing a blog series examining industry trends as seen through the lens of the 2023 Impact Awards’ 65 case studies, which catalogue technology projects that real insurers delivered to create real business success. Today, I’ll be diving into trends that surfaced this year in core projects across the industry.
Core projects involve systems that perform the key functions that allow insurers to run their business—policy administration, billing, claims, and underwriting systems (with or without external rating engines) are all included. These projects enable strategic capabilities that allow insurers to achieve their long-term goals, and they tend to be both high-cost and high-risk, with timelines that can span years. Core projects can impact almost every process or transaction an insurer needs to sell and service policies.
Core efforts also tend to be diverse, including not only transformations and migrations but also greenfield efforts that enable new products, business lines, or territories. As such, core projects don’t lend themselves to a single overarching trend. But there are a few key takeaways that characterize the 2023 Impact Award core projects:
- Core systems are fueling product growth.
- Underwriting is a priority.
- Cloud is key.
A final shout-out is owed to our life category winner, AAA Life Insurance Company, whose win comes from automating a policy conversion process to migrate large sets of legacy polices as part of a larger transformation effort. This is an area that’s not often discussed but is a persistent issue for life insurers struggling to modernize their environments. (Property/casualty insurers, by contrast, more typically roll business onto their new platforms during renewal.)
To check out all 22 core case studies, read Insurance Technology Impact Awards Case Study Compendium 2023: Core Initiatives.
Interested to see what’s happening in the world of data, digital, and IT practices? Find information about all of this year’s Insurance Impact Awards winners here
Harry Huberty, Head of CIO Research, Datos Insights---[Ed. Note] Aite-Novarica Group and RBR are now Datos Insights
InsurTech/M&A/Finance💰/Collaboration
InsurTech game changer Ennabl secures $8m in Series A funding
The platform succeeded in raising $8m in the round, led by Brewer Lane Ventures. Altai Ventures, along with a host of private investors, also joined the round, contributing to the platform’s ambitious expansion plans.
The central pillar of Ennabl’s operation is a Software-as-a-Service (SaaS) platform, using machine learning to drive growth in the insurance brokerage sector. The platform cleans, enriches, and extracts data from a variety of broker systems and processes, providing actionable intelligence for brokers. This intelligence enables brokers to increase their commissions, identify new customers, manage carrier strategy, and grow their book of business.
Ennabl will channel the newly secured funds towards product development, expanding the sales and marketing team, and overall company growth. This investment serves to accelerate the company’s growth trajectory and expand its market reach.
Ennabl has had a remarkable journey since its launch in 2021. It boasts a significant customer base that includes many of the world’s largest insurance brokers. The company has also formed partnerships with key technology and service providers like Reagan Consulting, NeuralMetrics, HazardHub, and Fenris Digital. These collaborations enable it to provide brokers with external data that can be used to stimulate top-line growth.
Ennabl CEO Kabir Syed expressed his enthusiasm for the platform’s growth prospects, saying, “Ennabl’s mission is to provide cutting-edge solutions for insurance brokers and agencies to help them grow their book of business and simplify their existing processes. We’re thrilled to have Brewer Lane Ventures and our other investors on board as we continue to grow our platform and help brokers achieve their goals.”
Industry Veterans Launch InsurTech Modives, Close $3M Seed Round
Life Event Platform Automates Insurance Verification for Property Management, Auto Dealerships
Combining decades of accumulated experience in the insurance space, five industry vets today announced the formation of Modives—a new venture delivering automation to alleviate a painful and time-consuming process for property managers and auto dealers: insurance verification.
"One of the pain points for both selling cars and renting properties is that verifying insurance takes too long and is cumbersome, which negatively impacts the customer experience," CEO and Co-Founder Frederick Waite said. "It’s an important—and legally required—step before a car leaves the lot and a tenant moves into a property, but verification hasn’t evolved in decades. Simply presenting a declaration page or policy ID card is not proof that insurance is in force. That’s a problem we’re solving."
Waite, a veteran entrepreneur, has assembled a team with varied insurance industry experience to launch his latest venture. Prior to forming Modives, Waite created BCF, a software platform acquired by Vertafore in 2006, and analytics platform Yodil, Inc., which was purchased by Duck Creek in 2016, both in the insurance space. Most recently, Waite’s patented IntelliBACE platform and global manufacturing organization BACE and was acquired by ONCAP in 2021.
Joining Waite on the Modives leadership team are four insurance executives with years of experience across several key areas of the industry.
Insurance Technology: Embroker Partners with Dashlane and Cowbell
Embroker announced a partnership with password-management provider Dashlane and cyber insurer Cowbell to increase customer security and expand cyber liability coverage.
“Through Cowbell and Dashlane, we are not only able to support our customers in the event of a cyber breach, but also help them avoid one altogether,” said David Derigiotis, chief insurance officer at Embroker, a digital platform for business insurance. “It is services like these that are shaping the next generation of insurance, making getting coverage easier and actively beneficial to those who hold policies with us.”
With Dashlane, Embroker customers have access to proactive cyber protection services with Dashlane’s password management featuring patented, zero-knowledge encryption – meaning all passwords and other items stored in users’ “vaults” remain private to users, even from Dashlane itself. Dashlane also monitors the dark web for information, alerting Embroker customers when their information is at risk.
The addition of Cowbell’s admitted cyber liability product to Embroker’s offerings underscores the continued evolution of ONE by Embroker. Enabled through an API, Cowbell’s cyber product can be paired with Embroker’s admitted LPL product, further strengthening its exclusive bundle offerings. Cowbell focuses on cyber insurance for SMEs.
AI in Insurance
AI provides a second set of eyes on personal injury claims - Insurance News - insuranceNEWS.com.au
Claims officers make decisions every day – million-dollar decisions that have the potential to change a claimant’s life. If anyone needs a second set of eyes – that helpful colleague with tons of experience and sharp attention to detail – it’s claims officers.
Here’s the thing: even two of the best claims officers with 60+ years of combined experience probably haven’t seen everything (although they may be pretty close). Every day there are new personal injury cases and unseen factors that offer data about the best course for a particular claim.
That’s where AI, or what I like to refer to as “augmented intelligence” comes in. Augmented intelligence is the result of using technology to make data-informed decisions with the help of artificial intelligence. It is a tool that helps claims officers make data-informed decisions to best manage the claim.
Below are a few of the ways AI can serve as that second set of eyes for claims officers.
Keep track of claims with alerts and insights
We rely on AI to keep us informed in numerous ways throughout everyday life. Whether it’s an alert about unusual activity on your credit card or your video doorbell letting you know someone picked up a package, AI works in the background to keep us informed. And it can help with insurance claims too, for example:
- Focus attention on potentially complex claims that are likely to adversely impact the bottom line
- Predict the likelihood of lawyer involvement
- Alert reserve mismatches
- Flag poor-performing medical providers
- When officers don’t have to worry about constantly monitoring all the claims on their plate, claims officers can apply their expertise to the most urgent tasks. That’s augmented intelligence.
Brought to you by CLARA Analytics
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Chubb CEO on AI advances and 'breathless rhetoric'
In a recent earnings call, Chubb chairman and CEO Evan Greenberg shared how the insurance company is looking to artificial intelligence (AI) and set out that, despite “breathless rhetoric”, the emerging technology will take time to have an impact.
Chubb has been using algorithmic AI for “five or six years”, Greenberg said, and is now investigating potential benefits of large language models. However, he told analysts and investors on the July 26 Q2 2023 earnings call that he expected the technology to take time to reap any rewards.
“The generalized and large language is going to be iterative, it will be over time,” Greenberg said. “If you think about insurance and the parameterization risk, or factor, around what we do, how many lines of business, the exposures, the geographies you cross, and so by its nature it’s going to be iterative and take longer than some of the breathless rhetoric that I hear, but we’re focused on that as part of what a modern insurance company is going to look like and is looking like.”
The insurance company will look to scale its use of the technology over the next two to three years, with potential use cases expected to be seen across underwriting and claims in terms of the technology’s “ability to either replace work that is done, or make it more accurate, or work alongside underwriters”, according to the CEO.
“It’s not a silver bullet, and we’re doing this on a global basis, some regions more in marketing, some more focused on portfolio underwriting,” Greenberg said. “But yet, whatever any one is doing spreads to the other, and it’s just where we start on one and end with another.”
How Technology and AI Are Changing the Insurance Industry - S&G Response
The insurance industry has been around since the 1700s and until recently, has been fairly traditional in its practices and procedures but as tech and particularly AI have advanced in recent years, things have changed quite drastically. The integration of innovative technologies is revolutionising the way insurers operate, from underwriting and risk assessment to customer engagement and claims processing, and as a result the insurance landscape looks very different than it did even a few years ago.
Let’s take a closer look at how AI is changing how insurance companies operate.
S&G Response
People
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Embroker Names Ben Jennings CEO: Transforming Insurance with Tech Innovations | InsurTech Magazine
Digital insurance platform Embroker has promoted interim boss Ben Jennings to the role of CEO, six months after his predecessor left on health grounds
Embroker – a digital insurance platform that tailors complex insurance lines like D&O insurance, cyber insurance and professional liability insurance to specific industries – has named Ben Jennings as its new CEO.
It’s a step up for Jennings, who has spent the past four years as the San Francisco-based company Chief Revenue Officer. His appointment is the culmination of an “extensive search”, the business says, which has been ongoing since founding CEO Matt Miller stepped down on health grounds at the end of January.
Jennings brings almost three decades of experience into the top job at Embroker, including a deep technology background and expertise in scaling, streamlining and expanding businesses. He has occupied the CEO’s chair on an interim basis while the search for a replacement to Miller was underway, and now Embroker has decided that he is the right man for the job on a permanent basis.