Small Business Insurance Customer Satisfaction Reach All-Time High in J.D. Power Study  August 24th 2023

Small Business Insurance Customer Satisfaction Defies Steadily Rising Rates to Reach All-Time High in J.D. Power Study

Despite steadily rising interest rates and strained business conditions, U.S. small businesses are increasingly satisfied with the products and services they are receiving from their commercial insurance providers.

According to the J.D. Power 2023 U.S. Small Commercial Insurance Study, released today, overall customer satisfaction has reached an all-time high of 847 (on a 1,000-point scale) as customers note significant year-over-year improvement in three of five factors evaluated in the study.

“Contrary to what we’ve seen in personal lines insurance, small business customer satisfaction keeps rising even as premiums have continued to climb,” said Stephen Crewdson, senior director of global insurance intelligence at J.D. Power. “While the overall satisfaction numbers are high, there are some important variations based on the size of the small business. The trend is really being driven by businesses in the ranges of five to 10 employees and 11-50 employees, as opposed to the micro businesses with fewer than five employees. That variation should inform more targeted small business strategies on the part of insurers.”

Third consecutive year of weather-event insurance claims exceeding $100bn:

In a recently released insurance sector report, Bloomberg Intelligence has forecasted that 2023 is poised to mark the third consecutive year in which insured losses stemming from natural catastrophes will surpass $100 billion, primarily due to a surge in weather-related claims.

The report highlights the increasing prevalence of secondary perils such as floods, hail, and wildfires, which have gained momentum in tandem with rising global temperatures.

Notable findings from the report include Munich Re’s assessment of global insured costs for natural-catastrophe events in the first half of the year at $43 billion, while SwissRe places the figure at $50 billion.

This discrepancy in figures notwithstanding, experts from Bloomberg Intelligence assert with confidence that the threshold of $100 billion in claims for weather-related incidents will be crossed for the third consecutive year.

The devastating earthquake that struck Turkey and Syria, resulting in a tragic loss of approximately 58,000 lives, stands as one of the most impactful events of the year.

Are auto insurers pulling back from California? | Insurance Business America

California is in the midst of more insurance woes as reports indicate that auto insurers are restricting new policies.

Companies have had to raise auto insurance rates across the US to offset the impact of inflation and increased claims. In California, these challenges are made even more complicated due to insurers’ inability to quickly adjust rates.

The state requires regulators to approve rate increases and the review process has slowed since the California Department of Insurance implemented a rate freeze during the pandemic.

The delays have caused insurers to “terminate agency appointments and restrict the submission of business,” according to American Agents Alliance, which represents independent insurance agents and brokers.

AAA finds driving assistance technology could prevent 37M crashes

New AAA research recently found that advanced driver assistance systems could prevent approximately 37 million crashes.

Advanced driver assistance systems (ADAS) are the eyes and ears of your car. They use sensors and cameras to detect potential hazards, warn drivers, and can take corrective action automatically. These safety systems are common on new vehicles, and they have the potential to save lives by preventing crashes – but how many?

New research by the AAA Foundation for Traffic Safety estimates that available ADAS technologies could prevent approximately 37 million crashes, 14 million injuries, and nearly 250,000 deaths over the next 30 years. This would represent 16% of crashes and injuries and 22% of deaths that would otherwise occur on U.S. roads without these technologies.

“The findings from this latest study on the AAA Foundation’s work in emerging technologies suggest that ADAS have the potential to transform road safety,” said Dr. David Yang, president and executive director of the AAA Foundation. “However, the full safety benefits of ADAS will not be realized unless they are fully understood by the consumer, used properly, and widely adopted.”

GEICO employees report 'mass' layoffs

Insurance company GEICO has undergone another tranche of layoffs, employees have reported on social media.

Several members of staff at insurer GEICO have taken to LinkedIn to confirm they were part of “mass” layoffs last week.

Affected individuals appear to have come from a range of departments, including marketing, customer support, the special investigations unit, and IT.

P&C Market to Remain Unprofitable Until 2025

The overall property & casualty industry is forecast to finish 2023 with a net combined ratio at 102.2, nearly identical to the final 2022 result of 102.4, according to the latest underwriting projections by actuaries at the Insurance Information Institute (Triple-I) and Milliman, which also said that the P&C will not post a ratio below 100 and return to profitability until 2025.

The projection provides little solace after underwriting results deteriorated across the board for big personal lines carriers in the first half of 2023, prompting more carrier pullbacks.

Poor personal lines underwriting performance is the key driver in both years, with a personal auto forecast of 109.5 for 2023. Additionally, large catastrophe losses dashed hopes of a market recovery after a difficult 2022.

The net combined ratio is the sum of two ratios, one calculated by dividing incurred losses plus loss adjustment expense (LAE) by earned premiums in a year, and the other by dividing all other expenses by either written or earned premiums, according to the Insurance Risk Management Institute.

A ratio below 100% indicates that the company is making an underwriting profit, while a ratio above 100% means that it is paying out more money in claims than it is receiving from premiums.

“Catastrophe losses in the first half of 2023 were the highest in over two decades, slightly higher than the record set in first half of 2021," said Dale Porfilio, chief insurance officer at Triple-I. “The good news is that the personal auto net combined ratio is beginning to show incremental improvement. Moreover, commercial lines continues its strong overall performance."

“We forecast net combined ratios to incrementally improve each year from 2023 to 2025, with the industry returning to a small underwriting profit in 2025," he added.