Despite Wariness, Half of Consumers Poised To Buy EVs  August 17th 2023

Insured losses from Maui wildfire to fall between $2.5bn and $4.5bn: Bloomberg Intelligence - Reinsurance News

The property and casualty insurance equity analyst team at Bloomberg Intelligence has estimated that the insurance industry loss from the Maui wildfires will fall between $2.5 billion and $4.5 billion.

This estimate gives an insured loss mid-point of $3.5 billion, which is higher than the $3.2 billion insured property loss estimate provided by catastrophe risk modeller KCC.

Data released over the weekend from the Pacific Disaster Center and the Federal Emergency Management Agency shows that as of August 11th, 2,719 structures were exposed to the Lahaina fire.

Allstate, Travelers Q2 catastrophe losses about double YOY

Property and casualty insurers across the US faced high catastrophe losses in the second quarter, with Allstate's bill for the period hitting $2.70 billion.

The Allstate Corp., The Travelers Cos. Inc. and The Progressive Corp. had the highest second-quarter catastrophe loss increases among US property and casualty insurers, according to an analysis by S&P Global Market Intelligence.

Severe weather, including hailstorms that scientists believe may be driven by climate change, coupled with rising populations in areas prone to violent weather, pummeled insurers during the first half of 2023.

Allstate had the worst of it in the second quarter, posting catastrophe losses totaling $2.70 billion, more than double the $1.11 billion it posted during the prior-year quarter.

Despite Wariness, Half of Consumers Poised To Buy EVs

Consumers are not deterred by negative publicity about charging battery-electric vehicles as interest in buying one rises.

Despite a steady stream of bad publicity about insufficient electric charging infrastructure, consumer interest in buying battery-electric vehicles is rising steadily.

According to recent surveys by J.D. Power and Associates and global consulting firm EY (Ernst & Young), as many as half those surveyed say they are interested in buying a BEV for their next set of wheels. The EY study puts interest at 48% among people considering a purchase in the next two years, up from just 29% a year earlier when the same survey was conducted.

Public Charging Issues May Short-Circuit EV Growth, J.D. Power Finds

J.D. Power: Public Charging Issues May Short-Circuit EV Growth

While automakers continue to introduce new electric vehicles (EVs) and experience growth in market share, the beleaguered public vehicle charging infrastructure has not kept pace.

If anything, it is falling further behind. The recent move to open Tesla Superchargers to non-Tesla owners could improve the situation, but such effort might not be the answer that some suggest, as overall satisfaction continues to decline, according to the J.D. Power 2023 U.S. Electric Vehicle Experience (EVX) Public Charging Study released today.

“With greater adoption of the North American Charging Standard (NACS) pioneered by Tesla, it may provide a boost in fast-charging satisfaction among owners of EVs from other brands as they begin to use Tesla’s Supercharger stations”

LexisNexis Insurance Demand Meter Registers as "Sizzling" for New Policies and "Hot" for U.S. Auto Insurance Shopping

The latest edition of the LexisNexis® Risk Solutions Insurance Demand Meter reports the quarterly year-over-year U.S. auto insurance shopping growth was +5.2% in Q2 2023, as consumers continue to react to widespread rate increases by auto insurers in the face of an ever-hardening market. Although year-over-year shopping growth remains high, new business volumes began to outpace shopping last quarter, signaling that the consumers that are shopping are finding policies that suit their individual needs. Quarterly year-over-year new policy growth –– or the rate at which consumers either switched or purchased new coverage –– was strong at +10.2%.

"Profitability is still a challenge for many insurers, driven in large part by a continued rise in claims severity across the market associated with rising costs to repair damaged vehicles," said Adam Pichon, senior vice president of auto insurance and claims at LexisNexis Risk Solutions. "As a result, most carriers are being much more discerning in their underwriting processes and cutting back on marketing spend, but motivated shoppers still sought better cost savings, and switched their policies in record numbers in May and June."

Claims Severities Create a Bumpy Road to Profitability

Increased claims severities have continued to challenge the U.S. auto insurance market, registering six consecutive quarters of at least 5% growthi. Fueled by labor and part shortages, the cost to repair – or replace – vehicles is increasing, and more than a quarter of collision events from 2022 (27%) were total lossesii, which has added more expense pressure. Insurers are reacting accordingly, not only by taking rate and reducing marketing spend, but some large carriers have even pulled out of higher-risk markets altogether.

"It's a tough situation. Inflationary pressure on repair costs is creating more total losses on top of the added costs to those vehicles that can be repaired – and our data continues to suggest that consumers are shopping near claims events," said Chris Rice, associate vice president of insurance strategic business intelligence, LexisNexis Risk Solutions. "When you combine these macroeconomic factors with claims and injury severities soaring, a lot of insurers have taken a step back to reassess how they will manage risk across their books of business for the foreseeable future."

Connected claims for insurance now has a viable path with Sfara's 3-in-1 solution

Sfara announces with it latest pre-integration, a 3-in-1 solution for insurance carriers to greatly expedite the reality of connected claims.

As recent insurance-industry announcements have made clear, offering free crash detection and professional emergency response to customers is a recognized path to the widespread adoption of technologies necessary for connected claims processing. Yet skepticism remains high within the industry about the feasibility of executing such a program without significant investment in time and resources.

"This is game changing for the insurance industry, which has been struggling for years to find a workable path towards digital FNOL and claims automation," said Nino Tarantino, GM of Insurance for Sfara.

Sfara's 3-in-1 insurance solution puts an end to that skepticism. It introduces crash detection and life-saving emergency response as an offering to the customer. Plus, the solution can improve claims processing from intake to settlement using detailed crash data fully integrated into existing workflows used by industry-leading carriers.

To initiate service, a carrier need only integrate Sfara's SDK into their flagship app and then choose from pre-integrated partnerships to best fit their needs for emergency calls and claims processing.

As a result, it's no longer necessary for carriers to undergo the expensive and arduous process of developing their own crash detection and emergency response service that integrates with their claims processing, which could take years to complete, and even then, not work to expectations.

Tipping the Scales: How Social Inflation Weighs on Insurance : Risk & Insurance

Warren Buffet first used the term social inflation in 1977 to describe how society was expanding its view of what is covered by insurance.

When Buffet coined the term, he was referencing the asbestos litigation making headlines and changing society at the time. Four decades later, the continued impacts of growing social inflation are felt across the industry.

This expansion of what is considered insurable along with increasingly high jury verdicts around the country has resulted in a unique challenge for the industry.

Consumers across the U.S. pay an annual tort tax through the increased costs of litigation in their state and insurers face increased loss adjustment expenses and defense costs.

A workshop session at the CPCU Society’s annual event, In2Risk, will examine this issue.

The session will be facilitated by Laura Gregory, Esq., CPCU, partner at Sloane and Walsh LLP, and Tim Fletcher, JD, CPCU, vice president, senior emerging issues specialist at GenRe.

The Social Inflation Contagion Adds to Rising Claims Costs

Along with ongoing pressures from labor costs, building supply shortages and global supply chain issues, social inflation and nuclear verdicts have added to the rise in claims costs.

This In2Risk session is designed for those with introductory knowledge, as well as attendees with more advanced experience to benefit from the information shared.

Starting with the basics, the speakers plan to define social inflation and examine how the issue affects claims and jury verdicts. Attendees will have the opportunity to discuss the increases in costs and time involved in handling claims impacted by social inflation as well as the widespread prevalence of these verdicts.