News
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.
Commentary/Opinion
Insurance price hikes are driven by inflation, says The Hartford CEO Christopher Swift
Christopher Swift, The Hartford CEO, joins 'Closing Bell Overtime' to talk the impact of Hawaii's deadly wildfires on insurers, inflation driven price hikes ...
InsurTech/M&A/Finance💰/Collaboration
Insurance Innovation: Legacy Systems & InsurTech Solutions
Monstarlab’s Engagement Director of Banking, Insurance and FS, David Titterton, argues that low customer engagement with insurance has slowed innovation
InsurTech Digital speaks to Engagement Director of Banking, Insurance and Financial Services at Monstarlab, David Titterton, about slow innovation in insurance, and what legacy players must do to expedite the process of updating systems.
Offering five considerations that insurers must consider when evolving systems, Titterton recommends insurers work with experienced partners, "to help them navigate through the strategy to find an optimal path forward".
Why has the insurance industry struggled to keep pace with innovation in other sectors?
Low levels of innovation in insurance have seen the industry struggle to keep pace when compared with other sectors.
This is partly due to consumers being less engaged with insurance products until an immediate need presents itself and in part the result of providers operating under strict risk and compliance requirements and with inflexible legacy technologies.
12 Insurtech Funding Rounds Defying Market Drop Predictions for the Industry
As the latest industry reports show insurtech funding to be falling, recent investment rounds, including several startups in the Middle East and Africa, are bucking the trend and scaling fast.
According to the latest stats from Gallagher Re, insurtech sector funding experienced a notable decline in the second quarter of 2023. Data shows that new funding for the industry dropped to $916.71 million, marking a 34% decrease from the previous quarter’s total of $1.39 billion.
This is the first time in three years that quarterly funding has fallen below the $1 billion mark. Despite the decline, the average deal size only decreased by 16.1% to $12.39 million. However, early-stage funding in the sector reached its lowest point since Q3 2017, with life and health insurtech companies receiving $58.34 million and property and casualty insurtech seeing $157.71 million in funding.
However, while stats suggest one scenario, individual companies can show another. We’ve rounded up some of the most notable funding rounds of the past fortnight in the insurtech space to show that despite the dampened figures, insurtech investment is still thriving.
Ondo InsurTech Partners with PURE Insurance to Bring LeakBot to Policyholders
The collaboration aims to bolster risk management and curb preventable claims for PURE’s esteemed policyholders.
PURE Insurance, known for its commitment to serving successful and responsible families, boasts over 15 years of experience in the property and casualty insurance sector. With a membership base exceeding 100,000 nationwide, the company has earned a reputation for transparency and a strong alignment of interests.
The new partnership will see PURE Insurance embark on a pilot program, distributing Ondo’s innovative LeakBot system to selected members in specific states. LeakBot is specifically designed to identify small leaks before they evolve into significant claims, a proactive approach to loss prevention that aligns with PURE Insurance’s vision.
Uber and Cover Genius Partner to Provide Protection for Drivers in Brazil | Insurtech Insights
Embedded insurance specialist, Cover Genius, has announced an exciting new partnership with Uber to offer enhanced protection for drivers in Brazil.
Through integration with Cover Genius’ renowned distribution platform, XCover, Uber will seamlessly provide drivers with embedded protection, featuring innovative platform-driven features like automated payouts and charging based on driving data.
Angus McDonald, CEO, and Co-founder of Cover Genius expressed pride in the partnership with Uber, stating, “As the number of rideshare drivers around the world continues to surge, it is crucial for rideshare, delivery, and other app-based services to collaborate with insurtechs to ensure protection for both sides of their marketplace with technology-forward solutions. This pivotal partnership ensures Uber’s drivers can recover from unforeseen challenges, advancing our mission to safeguard the customers of the world’s largest digital companies.”
Benekiva Launches Portal360 Hub for Claimant/Carrier Collaboration
Benekiva Launches Portal360 Hub for Claimant/Carrier Collaboration
The new solution allows claimants to manage their claim and engage in real-time discussion with a carrier associate without ever leaving the intuitive Portal360 interface.
Benekiva (Des Moines, Iowa), a provider of claims-related solutions, has announces the launch of Portal360, a collaboration hub designed to redefine the way insurers can interact with their stakeholders, collaborate, and streamline their operations.
Benekiva describes Portal360 as a cloud-based, configurable hub that provides claimants and stakeholders with a localized area to access notifications, statements, correspondence, and complete transactions, all within a dashboard view. Tailored to user activities and actions defined by the insurer, the platform allows stakeholders as an example to securely upload required documentation, set up electronic funds transfers (EFT), update contact information, and engage in real-time discussion with an associate and conduct other activities without leaving the intuitive Portal360 interface, according to the vendor.
AI in Insurance
How AAA’s second-largest club is gearing up for its generative AI push
The Auto Club Group has spent the past five years transforming its architecture; its next step focuses on generative AI.
AAA- The Auto Club Group serves more than 13 million members across 14 U.S. states, the province of Quebec, Puerto Rico and the U.S. Virgin Islands. Permission granted by AAA - The Auto Club Group
Generative AI captured the hearts and minds of executives around the world as users praised the technology for its efficiency and vendors quickly released products to meet interest.
AAA - The Auto Club Group is among an ever-growing group of organizations that have partnered with vendors to support generative AI implementation. AAA’s second-largest club, which includes insurance, membership experience, travel, and roadside assistance, plans to adopt Salesforce’s AI cloud, a CRM-based AI solution, the companies said in June.
“The hype when ChatGPT was announced and exposed to the public was mushrooming everywhere,” Shohreh Abedi, EVP and chief operations and technology officer and membership experience at ACG, told CIO Dive. “But me and my team looked at it as a part of our digital transformation.”
Events
Reuters Events: Connected Claims USA 2023 | September 26-27 | Austin Convention Center
Full Event Program Released: Attendee Profile & Networking Event Plans
The World’s Largest Claims Event
As the most important touchpoint in the customer lifecycle, claims organizations need to be on the front foot to deliver the reputation and retention rates that underpin insurance claims success.
With inflation and supply chain impacts, nuclear verdicts, changing customer expectations and an evolving ecosystem to navigate, there is unprecedented urgency to be agile and recalibrate focus to achieve claims excellence.
Act now and join 700+ claims leaders at Reuters Events: Connected Claims USA 2023 (September 26-27, Austin Convention Center) to enhance customer service, streamline claims processes, perfect carrier-vendor alliances, and foster adaptive, future-thinking claims strategies, centered on people, data and innovation.