Maui Fires Come at a Moment of Turmoil for the Insurance Industry  August 14th 2023

Maui Fires Come at a Moment of Turmoil for the Insurance Industry

Hawaii has the nation’s lowest rates for homeowner coverage because it has not suffered many natural disasters. That may change. The wildfires may make insurers in the state reconsider rates and availability of homeowner policies.

The devastating wildfires in Hawaii have come at a time of upheaval for the insurance industry, in a place that had not been considered very risky by underwriters.

The state’s residents have generally paid low home insurance rates — the cheapest in the country, according to Bankrate, a consumer financial services company — because there are relatively few natural disasters in Hawaii, with the private sector on stronger footing than in states like Florida and California. In recent years, both states have been more prone to extreme weather events than Hawaii.

But the deadly fires in Maui this week, which destroyed thousands of homes and will take what the state’s governor said would be billions of dollars to rebuild from, may make insurance companies reconsider policy rates and coverage, as they have in more disaster-prone areas.

Insurance rates are set on a state level, with varying degrees of government regulation and intervention. Typically, states like Hawaii that have strong private insurance markets have not needed forceful state involvement on rates.

After Hurricane Iniki hit Hawaii in 1992, the Legislature created a fund to provide hurricane insurance to homeowners. But that fund ceased operations in 2002 because the private market had returned to full strength.

More broadly across the United States, some private insurers have begun retreating as natural disasters have mounted, leaving the overall market in peril.

State Farm, the largest homeowner insurance provider in California, announced in May that it would no longer sell coverage there. In Florida, homeowners have struggled to find storm coverage as insurers have pulled out because of the risks arising from climate change.

For Hawaii’s relatively robust private insurance market, there’s reason to think things could become more precarious moving forward, although companies will need time to consider new data in estimating their future losses.

“I think insurers are going to start factoring in the increased frequency and severity of wildfires,” said David Marlett, a professor of risk management at Appalachian State University. “You’ve already seen that in California.

Santul Nerkar, New York Times

Hannover Re Reports Strong H1 Performance with 3.9% Increase in Reinsurance Revenue

Global reinsurer 88Hannover Re n has showcased impressive growth in its H1 2023 financial results, recording a remarkable 3.9% surge in reinsurance revenue, which now stands at €12.3 billion.

The company attributes this growth to effective management of large losses within the property and casualty (P&C) reinsurance sector, aligning with the budgeted expectations.

One of the standout achievements in the H1 2023 report is the reinsurance service result, a key indicator of profitability in underwriting activity after accounting for business ceded. This metric has soared by an impressive 56%, reaching €1.1 billion.

However, the reinsurance finance result, after adjustments for exchange rate effects, including technical reserve interest accruals from previous years, reported a figure of €-342 million for the period. This is a change from the €-205 million reported in H1 of the previous year.

Hiscox Unveils Strong Financial Performance with Underwriting Profits Surging Over 57%

In a strategic move that has paid off handsomely, the insurer has reported a notable 19.9% return on equity (ROE), attributing this success to a substantial surge in revenue, insurance service results, and profits across all its business units.

Hiscox has achieved a substantial milestone with net insurance contract written premiums (net ICWP) totaling $1.945 billion, reflecting an impressive 11.4% increase. This boost is a testament to the successful execution of the company’s strategic vision. The ICWP figure itself saw a 6.3% rise to $2.617 billion, which, considering the current stage of the business cycle, aligns with expectations.

Top 10 Insurance Core Innovations

InsurTech Digital takes a look at what makes our Top 10 insurance core system softwares the best, tracking their popularity across leading insurers

Insurance is on a forward leap in today’s age of digitisation, streamlining processes to make customer experiences less friction-heavy. Business models are shifting to place the customer at their core, but this wouldn’t be possible without the innovative solutions on offer from insurtech providers. 

InsurTech Digital runs through our Top 10 insurance core system softwares and platforms available on the market today. 

Data Shows an Increase in Drunk Driving Deaths and More Alcohol Consumed

Americans are drinking more than they did before the pandemic, and more of them are dying in alcohol-related motor vehicle crashes, according to a new report by the drivers education platform Zuboti.

The report says 13,386 deaths were attributed to drunk driving in 2021, accounting for 31% of all road fatalities, according to the most recent data available from the National Highway Traffic Safety Administration. The United States hasn’t seen that many alcohol-related traffic deaths since 2005 and that large of a percentage of fatalities attributed to alcohol since 2013.

“Shockingly, the number of drunk driving deaths has surged by 1,732 (14.8%) compared to 2020, dealing a severe blow to safety advocates and regulators who strive to make our roads safer,” the report says.

Zuboti said data from the National Institute of Alcohol Abuse and Alcoholism shows that US alcohol beverage sales increased in the past years, to 2.51 gallons of alcohol consumed in 2021 from 2.44 gallons in 2020, a 2.9% increase. That was a 5.5% increase from 2019, when an average of 2.38 gallons of alcohol were consumed.