Auto Insurance in an Existential Crisis  July 28th 2023

July 2023 is set to be the hottest month on record | World Meteorological Organization

According to ERA5 data from the EU-funded Copernicus Climate Change Service (C3S), the first three weeks of July have been the warmest three-week period on record and the month is on track to be the hottest July and the hottest month on record. These temperatures have been related to heatwaves in large parts of North America, Asia and Europe, which along with wildfires in countries including Canada and Greece, have had major impacts on people’s health, the environment and economies.

« We don’t have to wait for the end of the month to know this. Short of a mini-Ice Age over the next days, July 2023 will shatter records across the board, » said United Nations Secretary-General António Guterres.

« According to the data released today, July has already seen the hottest three-week period ever recorded; the three hottest days on record; and the highest-ever ocean temperatures for this time of year, » Mr Guterres told journalists at UN headquarters in New York.

[Ed: Note: Highly Recommended] The Ultimate Guide to Vehicle Data - J.D. Power

How Vehicle Data is Shaping the Future of Auto Insurance

Smarter, safer, better vehicles should be less risky to operate and, when built with repair and resilience in mind, may also be cheaper and easier to fix when accidents do happen. The technologies car makers introduce to make vehicles “smarter, safer, better” may be optional equipment and can cause variations in initial value of the new vehicle and retained value as that vehicle hits used car years which in turn has lingering effects on insurance.

Auto insurance companies are increasingly using vehicle data to improve their risk assessment and pricing models for vehicles, drivers, driving conditions, operator behavior, and surrounding traffic. The vehicle data we will discuss in this guide includes connected car data, driver data, and data as it relates to features on a vehicle.

This data can be collected from a variety of sources, including in-car sensors, GPS data, and even social media. By analyzing this data, insurers can better understand how drivers behave and how likely they are to get into accidents. This information can then be used to offer more personalized insurance rates and to provide drivers with more accurate information about their risk.

There are several ways that vehicle data can be used to make auto insurance companies more competitive.

If you take one thing away from our Ultimate Guide to Vehicle Data for Auto Insurers, it should be this: Vehicle data is a critical tool for scoring more wins in the competitive auto insurance landscape. While a few years ago vehicle data might have been a “nice-to-have,” in the immediate and future automotive insurance industry, it has become a “must-have.” It’s time to get started.

Contributors:

Marty Ellingsworth, Executive Managing Director, Insurance Intelligence; Cathy Noble Product Portfolio Director, Autodata Solutions; Ron Lawson, Vice President, Business Strategy, Valuation Services, J.D. Power

Liberty Mutual to halt business owners policies in California

Current policies will not be renewed after December

Liberty Mutual Insurance will discontinue its business owner policies in California starting this fall and will not be renewing current policies after December.

“We regularly assess our position in every market to ensure we are delivering competitive, innovative products that meet our customer needs while achieving our business goals,” a Liberty Mutual spokesperson told Insurance Business.

“Sometimes that results in a determination that a product is no longer effectively delivering on those aspirations, and we must retire that line.”

Effective October 1, 2023, the insurance company will no longer offer a business owners policy (BOP) in California and it will not be renewing its current book beginning in December, the spokesperson confirmed.

Florida homeowners insurance market shows signs of rebound amid market reforms: ALIRT

In the midst of years of tumultuous market conditions, Florida’s homeowners insurance sector seems to be experiencing an encouraging upturn, signaling a possible rebound for the beleaguered industry, according to a recent report by ALIRT Insurance Research.

Over the past few years, Florida’s property insurance market has been grappling with significant challenges, including weather-related losses, a surge in plaintiff’s bar activity, assignment of benefits abuses, and a spate of insurer insolvencies. However, recent data indicates that the situation may be changing for the better.

Citizens Property Insurance Corporation (CPIC), Florida’s largest residual market, has experienced a surge in policy counts over the past two years. According to Citizen reports, policy counts at CPIC reached over one million this month and are expected to climb to 1.7 million by the end of 2023, surpassing the peak numbers from 2011.

Corinthian says could take months to resolve Vesttoo collateral investigation - Reinsurance News

Corinthian Group, the specialty non-catastrophe focused collateralized P&C reinsurance firm, has said that it could take quite some time to resolve any criminal investigation into the Vesttoo collateral issue, and that while the exact details surrounding allegedly fraudulent letters of credit (LOC) remains unclear, the firm is operating under the assumption that all Vesttoo-sourced LOCs are fraudulent.

How underwriting automation can unlock perpetual momentum

Growing an insurance company can feel like an uphill battle. You’re constantly fighting against the friction caused by internal and external forces. Even when you start to gain altitude, any slight misstep can send you stumbling right back to where you started.

There is a better way. By investing in underwriting automation, you can unlock perpetual momentum.

What is perpetual momentum?

Insurance growth is often depicted as an upward trajectory. Your team attempts to simultaneously push business volume and underwriting profits higher, but the efforts of one endeavor can be counter-productive to the other. It’s like climbing a mountain and working against gravity. The higher you go, the more energy you have to expend to make progress.

The idea of perpetual momentum presents a more efficient way to unlock growth. Essentially, you want your growth process to power itself. This way, business growth keeps building without additional resources, ultimately creating a cycle of continuous growth.

Building your business doesn’t have to be an upward slog. With a perpetual momentum model, business growth builds on itself.

Start with underwriting automation

For the insurance industry, the natural starting point is underwriting because it is the gatekeeper of new business and profitability. Even if marketing and sales are successful, an inefficient underwriting process can asphyxiate growth. Once your underwriting machine is humming, you can tap into a continuous cycle of progression.

Amrish Singh is the CEO of Liberate Innovations Inc.

20 states with the highest car insurance rates for teens

The most expensive five states in the ranking have an average annual insurance premium for 16- to 19-year-old teenagers of $4,496.

For 16-year-olds, the average annual premium in these states is $5,879, while for 19-year-olds the premium drops down to $3,157.

Scroll through to see the most expensive 20 states and their annual insurance premiums for teen drivers.

New Report Shows Full-Size Trucks Have Highest Theft Rate

According to analysis by the National Insurance Crime Bureau (NICB), the insurance industry's association dedicated to predicting, preventing, and prosecuting insurance crime, vehicles with the highest theft rate last year were full-size pickups. These vehicles made up more than 25 percent of the thefts reported in 2022, which was a decrease from a high of 33 percent in 2021. While vehicle theft rates have been soaring since the start of the pandemic, recovery rates have also risen. More than 85 percent of passenger vehicles reported stolen in 2022 were subsequently recovered by law enforcement or other means, with 34 percent recovered within a day of the vehicle being reported stolen.

New Report Shows Full-Size Trucks Have Highest Theft Rate

"Vehicle theft is a multi-billion-dollar industry in the United States," said David J. Glawe, President and CEO of the National Insurance Crime Bureau. "Approximately one motor vehicle is stolen every 32 seconds, which adds up to more than one million vehicles stolen last year. Vehicle theft disrupts lives, causes financial hardship, and undermines community safety. Addressing this problem is not just the responsibility of law enforcement agencies; it requires a partnership between vehicle owners, community members, as well as federal, state, and local governments."

Vehicle theft rates for sedans, including Honda, Hyundai and Kia, followed those of full-size pickups, with recovery rates for Hyundais and Kias between 87 and 95 percent. Social media trends were a likely factor in their high theft rankings in 2022.