News
Berkshire’s Geico swings to Q2 underwriting profit despite personal lines challenges
Berkshire Hathaway’s subsidiary Geico posted improved Q2 underwriting results in spite of the continued pressures affecting personal lines insurers over the last months.
Geico’s combined ratio decreased 10.3 points to 94.7%, fueled by higher average premiums per auto policy, a reduction in advertising costs and favorable reserve development.
The insurer’s underwriting gain comes despite a challenged personal lines space, with the domestic auto industry facing inflationary pressures and some homeowners’ markets seeing a pullback from several carriers.
As this publication has discussed, personal lines issues over the last few months have been driven by loss trends related to property damage and bodily injury, litigation and regulatory challenges. (See: July average personal auto rate change hits decade high of 10.7% as filing submissions slow.)
But in Q2, Geico’s improved results boosted Berkshire Hathaway’s overall performance, as the conglomerate reported $1.25bn underwriting earnings, nearly double the $715mn in Q2 last year.
![Aon faces legal action over Vesttoo](https://dxj7eshgz03ln.cloudfront.net/production/link/image/881223/original_ratio_extra_large_868b5120-ea56-424d-a595-72d3078adab2.jpg)
Aon faces legal action over Vesttoo
Aon PLC disclosed in a stock market filing Friday that clients are taking legal action against the brokerage over transactions involving allegedly fraudulent letters of credit related to online reinsurance brokerage Vesttoo Ltd.
In its 10Q filing with the Securities and Exchange Commission detailing its second-quarter results, Aon said clients and counterparties have initiated or indicated they may initiate legal proceedings against Aon.
“The pending or threatened legal proceedings against the company allege, among other theories of liability, that in certain circumstances the company failed to comply with its alleged duty to procure appropriate letters of credit,” Aon said in the filing.
![Swiss Re's P&C combined ratio strengthens as net income rises to $1.4bn](https://dxj7eshgz03ln.cloudfront.net/production/link/image/882616/original_ratio_extra_large_741280a0-9c7f-42d1-9781-b392b223e333.jpg)
Swiss Re's P&C combined ratio strengthens as net income rises to $1.4bn
Global reinsurance giant Swiss Re has reported a significant rise in net income to $1.4 billion for the first half of 2023, driven by contained natural catastrophe losses, and a solid performance in all business segments during the period.
Group-wide, net income rose substantially from the $157 million recorded in H1 2022, supported by a profit of $804 million in the second quarter of 2023.
Return on equity (RoE) jumped from 1.6% in H1 2022 to 22.8% in H1 2023, as Swiss Re reports manageable natural catastrophe losses, and a robust performance in both its life and health (L&H) business and Corporate Solutions arm.
Across the group, net premiums earned and fee income increased by more than 4% to $22.1 billion in H1 2023.
Swiss Re’s return on investments totalled 2.8% at the half year compared with 1.2% a year earlier, as the return on investment continues to benefit from higher income.
![Auto insurers drops of Kia, Hyundai coverage adding to churn](https://dxj7eshgz03ln.cloudfront.net/production/link/image/882815/original_ratio_extra_large_502e197c-19b1-4346-b4c7-3570d0bd045e.jpeg)
Auto insurers drops of Kia, Hyundai coverage adding to churn
Recent moves by auto insurance carriers to drop coverage for Kia and Hyundai cars as theft risks, or more readily write off damaged Teslas as total losses, are adding to volatility in the auto insurance market, as seen in insurance shopping trends, according to a managing director at J.D. Power.
"With all the rate taking and pressure on the economy and pressure in the industry and loss ratios that's going on, you've seen a lot of shopping rates at all time high," said Martin Ellingsworth, executive managing director of P&C insurance intelligence at J.D. Power. The automotive data and intelligence company publishes quarterly and annual reports on shopping trends in auto insurance, which track when policyholders look to change carriers based on price.
In early 2023, State Farm and Progressive announced they would no longer cover certain models of Kia and Hyundai cars that lacked electronic immobilizers, a standard anti-theft device in ignitions.
Separately, these two carriers, along with Geico and Farmers, were the subject of disputes by Tesla over their more readily "totaling" low-mileage Tesla cars that had been in accidents, because of high repair costs, according to Reuters.
Progressive, Geico and Farmers did not respond to requests for comment.
State Farm replied, stating that it "has stopped accepting new customer applications in some states for certain model years and trim levels of Hyundai and Kia vehicles because theft losses for these vehicles have increased dramatically. This is a serious problem impacting our customers and the entire auto insurance industry. We take seriously our responsibility to manage risk and the impact of excess claim costs on all our customers. In this case, it became necessary to take action to protect our policyholders and our business."
The carrier added that it is monitoring this issue and would "adjust our approach as appropriate."
Deciphering the designation: CPCU
Why are designations important to insurance professionals?
In addition to each state mandating specific requirements to maintain your license, pursuing additional knowledge can unlock new opportunities and long-term success. Selecting the appropriate insurance training programs will enhance your expertise, elevating the value you provide to your agency and clients.
The chartered property casualty underwriter (CPCU) is one of the most well-known, and equally well regarded, designations granted by the American Institute for Chartered Property Casualty Underwriters, or The Institutes as it is more colloquially known. The designation was established in 1942 by academic leadership from the Wharton School of the University of Pennsylvania.
According to The Institutes, 98% of those that earn a CPCU designation gain a skill they can apply right away to their job, while 95% said the designation positioned them for new opportunities.
Commentary/Opinion
![[Ed. Note: Recommended] Top trends in property and casualty insurance 2023 | Research & insight | Capgemini](https://dxj7eshgz03ln.cloudfront.net/production/link/image/882411/original_ratio_extra_large_300ee3a7-df3f-4935-84fc-416aa81ee515.jpg)
[Ed. Note: Recommended] Top trends in property and casualty insurance 2023 | Research & insight | Capgemini
Drivers, opportunities, and risks shaping the property and casualty insurance industry in 2023.
Read Capgemini’s Property and Casualty Insurance Top Trends 2023 to get a glimpse of how P&C insurers will strategically prioritize digital transformation initiatives to strengthen their capabilities and navigate challenging macroeconomic volatility.
Key actions will include focusing on customer centricity, prioritizing agile product innovation, embedding sustainability into corporate strategy, and building advanced digital capabilities to build a resilient, future-ready enterprise.
Shane Cassidy, Executive Vice President, Financial Services; Insurance Business Unit Leader, Capgemini Financial Services
InsurTech/M&A/Finance💰/Collaboration
Bees360 - The Future of Property Inspections
Bees360, the top provider of drone-enabled property inspection services powered by artificial intelligence (AI), and Fixle, a technology solution that simplifies home management and major appliance inspection, are pleased to announce a new partnership which will enhance data capture, tracking, and management for interior property inspections.
Bees360 not only automates the physical requirements of external home inspections through the use of drones, but is also focused on improvements to the interior property inspection process as well. Since home appliances play a major role in the safety and functionality of a home, every home inspection requires a visual and operational assessment of built-in and major appliances to ensure accuracy.
“The partnership with Fixle brings a new element to improving the efficiency and accuracy of interior home inspections,” said Courtney Cooke, executive vice president of sales at Bees360. “By leveraging Fixle’s technology, our inspectors will be able to accurately capture appliance data more quickly and provide more of what our clients need while creating a path to grow into new markets.”
Converge Insurance Announces $15 Million Series A Funding from Forgepoint Capital
The funding will be used to accelerate expansion of platform’s functionality, expand go-to-market and insurance capacity for the MGA.
Converge Insurance (New York), an MGA that fuses cyber insurance, security and technology to provide small to medium-sized businesses with what it calls clear and confident cyber protection, has announced $15 million in Series A funding from Forgepoint Capital (San Mateo, Calif.).
Forgepoint Managing Directors Don Dixon and Andrew McClure have joined Converge’s Board of Directors as part of the financing. Tom Kang has been appointed as CEO of Converge Insurance as part of the financing round, which closed last week.
Converge addresses the problem of underinsurance for cyber risk among SMBs—61 percent of which were the target of a cyber attack in 2021. By deploying a proprietary data ecosystem underpinned by expert underwriting, Converge says it provides precise cyber risk solutions that deliver improved outcomes for its customers, starting with SMBs.
![Goosehead Insurance sees net income swell to $7.2m in Q2 - Reinsurance News](https://dxj7eshgz03ln.cloudfront.net/production/link/image/880632/original_ratio_extra_large_83c13563-399e-4f9e-9fc0-c062131f9097.jpg)
Goosehead Insurance sees net income swell to $7.2m in Q2 - Reinsurance News
Goosehead Insurance has disclosed that net income in Q2 was $7.2 million, a vast improvement from $2.4 million in the same quarter last year, which the firm said is due to strong revenue growth and expense discipline.
Goosehead’s Total Revenues in Q2 grew 31% from the same period last year to $69.3 million.
Meanwhile, Core Revenues, a non-GAAP measure which excludes contingent commissions, initial franchise fees, interest income, and other income, were $61.0 million, a 27% increase from $48.1 million in the same quarter last year.
Events
How to Expedite Auto Total Loss Claims, sponsored by LexisNexis Risk Solutions
LIVE : August 8 at 11 EST
Increased accident severity directly correlates to a rise in total losses, and LexisNexis Risk Solutions internal data indicates that 27 percent of collision claims for 2022 were total losses.
As carriers remain laser focused on creating the best customer experience, total loss could be an area ripe for improvement.
Join LexisNexis Risk Solutions for a webinar with P&C Specialist on August 8 at 11 EST. In this panel discussion, a group of industry experts will tackle this challenging topic as they brainstorm ways carriers can help shorten and simplify this process.
It’s a discussion you won’t want to miss. Register here for this complimentary event today!
AI in Insurance
![[Ed. Note: Requires Registration, Highly Recommended] How insurers can leverage the power of generative AI](https://dxj7eshgz03ln.cloudfront.net/production/link/image/882505/original_ratio_extra_large_6b8c1078-0a71-40f0-a625-785e525a9ce0.jpg)
[Ed. Note: Requires Registration, Highly Recommended] How insurers can leverage the power of generative AI
In this webcast, EY and Microsoft leaders will discuss how generative AI can fundamentally reshape the insurance industry, from underwriting and risk assessment, to claims processing and customer service.
Watch on-demand
Join us for a webcast exploring the future of insurance powered by generative AI. Discover the groundbreaking ways that AI is transforming the insurance landscape and learn how you can leverage these technologies to gain a competitive edge in the market while effectively managing the associated risks.
You will hear from EY and Microsoft insurance industry leaders who will discuss how AI can fundamentally reshape the insurance industry, from underwriting and risk assessment, to claims processing and customer service. Gain insights into Azure OpenAI capabilities and the controls needed to effectively manage privacy, bias and legal risks when leveraging this technology.
Key questions that will be addressed are:
- Why generative AI, and what’s changed?
- How can my organization use the recent AI advancements to enhance customer experience and engagement, offer personalized products and services, and apply better pricing strategies?
- What risks should I be aware of, and how do I protect my organization from them?
- What are my peers doing in this space? Am I ahead or behind?
- How can I verify that generative AI is used ethically and responsibly within my organization?
- What are the advantages of Azure OpenAI compared with other generative AI models in the market?
- How can I integrate generative AI into my organization’s existing technology infrastructure and processes to drive better business outcomes?
Speakers:
- Rob Fannon – Microsoft Financial Services Data & AI Leader
- Chris Raimondo – EY Americas Insurance Technology Leader
- Vidhya Sekhar – EY Americas Financial Services Data and Analytics Leader
- Sankar Virdhagriswaran– EY Americas Financial Services AI Lead
![AI adoption will help identify the winners in re/insurance: Xceedance CEO](https://dxj7eshgz03ln.cloudfront.net/production/link/image/882498/original_ratio_extra_large_f6ceb217-c312-4137-89b7-4666c9ad91a8.png)
AI adoption will help identify the winners in re/insurance: Xceedance CEO
Artificial intelligence (AI) will disrupt how re/insurance organizations do business.
The industry must embrace it as the technology will help deliver better, faster, more accurate, and cost-efficient outcomes, Xceedance CEO Arun Balakrishnan noted in a recent interview with Reinsurance News.
“If people believe this is a choice, they are wrong because it is not a choice. There is some skepticism in the commercial insurance industry that AI can’t do much, but I don’t think that’s true at all,” Balakrishnan stated.
“I believe the way people will embrace and use AI will be to become more efficient at their job, to do it faster and more accurately. When that happens, it will help you become better than your peers. And eventually, everybody will want to adopt cognitive technologies.
“However, the widespread use of AI will also significantly affect the insurance products that we must develop to manage risks associated with data confidentiality, transparency, security, and abuse, among other things,” Balakrishnan explains.
Balakrishnan believes digitisation of the re/insurance industry is an ongoing process with many variables.
EMEA
Insurance Industry Honours Faster Claims Payments (FCP) Solutions
FCP wins 'Claims Initiative of the Year' and 'Claims Achievement Award'
Solution transforms claims experience for customers and market participants
As more market participants are signing up to use Faster Claims Payment (FCP), the insurance industry is recognising and rewarding the scale of the market-wide issue that FCP is solving, the work that has gone into the development and adoption of the solution, and the benefits for the entire market. At the Insurance Post British Insurance Awards at the Royal Albert Hall on 5 July 2023, the Faster Claims Payment (FCP) solution was named ‘Claims Initiative of the Year’. This accolade follows an earlier win for ‘Claims Achievement Award’ at the Insurance Times Claims Excellence Awards in May 2023.
Almost £1 billion of claims funds have traditionally been scattered around the world in individual bank accounts, or loss funds, managed by Delegated Claims Administrators and coverholders on behalf of Lloyd’s managing agents. FCP is revolutionising the market by centralising and significantly reducing these funds, enabling claims to be swiftly paid to our customers when they require them, and freeing up capital for our market participants to invest in other important initiatives.