News
![Tropical Depression Looms in Caribbean, Florida on Alert](https://dxj7eshgz03ln.cloudfront.net/production/link/image/887838/original_ratio_extra_large_e16a9888-6246-44bb-b899-4539cee6517c.jpeg)
Tropical Depression Looms in Caribbean, Florida on Alert
Meteorologists at the National Hurricane Center have raised the alert for a potential tropical depression formation in the Northwestern Caribbean Sea to 60 percent, with early projections indicating a path toward Florida’s panhandle.
In the 2 P.M. update on Thursday, the National Hurricane Center reported a "broad area of low pressure" positioned over the borders of El Salvador, Honduras, and Guatemala. The forecast predicts a northward trajectory that will take it across the easternmost tip of Mexico and into the Gulf of Mexico, where the system is expected to gain strength.
While the current probability of this low-pressure system becoming a tropical depression within the next 48 hours remains at ten percent, the chances increase significantly over the next seven days to 60 percent.
This impending weather development coincides with Florida’s ongoing disaster preparedness tax holidays, offering tax savings on essential items like batteries, ice, and portable generators.
NOAA now estimates a 60 percent likelihood of an above-average hurricane season, doubling the initial 30 percent forecast in May. Contributing factors include exceptionally warm Atlantic sea surface temperatures, the highest recorded since 1950, along with delayed El Nino-associated effects.
![California wildfires and Atlantic hurricanes: Insurers grapple with rising risk](https://dxj7eshgz03ln.cloudfront.net/production/link/image/887790/twenty_by_nine_extra_large_f545b0cf-aa23-4e25-a0db-1676dba0a1e3.png)
California wildfires and Atlantic hurricanes: Insurers grapple with rising risk
The insurance sector is under intense pressure as the severity and frequency of wildfires escalate, particularly in the state of California. Major industry players Allstate and State Farm recently decided to stop issuing new policies in California, marking a significant change in the insurance sector's approach to wildfire risk.
State Farm attributed its decision to various factors, including inflation, a challenging reinsurance market and rapidly increasing exposure to catastrophes. Allstate explained its withdrawal in a press statement: “The cost to insure new home customers in California is far higher than the price they would pay for policies due to wildfires, higher costs for repairing homes and higher reinsurance premiums.”
This situation mirrors a nationwide trend. As climate change intensifies, insurance companies across the country are increasing rates, reducing coverage or withdrawing entirely from regions prone to wildfires and other natural disasters. This trend is not isolated to California, as states like Florida and Louisiana have been struggling with their insurance markets in the aftermath of severe hurricane damage, and Colorado is seeing a surge in insurance premiums due to the wildfire threat.
A warmer, drier climate in the West over the past three decades, fueled by climate change, has increased the frequency and destruction of wildfires. California, in particular, has experienced some of the largest and most destructive fires in its history, and 1.2 million homes there are at extreme risk of wildfire damage. The steady increase in the number of acres burned in California each year, combined with rising repair or replacement costs for homes damaged or destroyed by fire, results in increased insurance losses.
Marlene Dailey, RSM US financial services senior analyst and David Mamane Financial Services Senior Analyst
![Best’s Special Report: Insurer Innovation Accelerated by COVID-19 Continues Post-Pandemic](https://dxj7eshgz03ln.cloudfront.net/production/link/image/887627/original_ratio_extra_large_04e041d8-0581-4b96-a91a-a5a81e51dd5c.jpg)
Best’s Special Report: Insurer Innovation Accelerated by COVID-19 Continues Post-Pandemic
As the pace of innovation accelerates within the insurance industry, the top performers in more complex lines of business may be those that overcome the innate challenges of their segment to develop new products, processes, services, and business models, according to a new AM Best special report.
“Certain lines lend themselves more readily to innovative strategies than others. Complexity influences innovation adoption. Because the auto/home and health insurance lines deal with large homogeneous risks, initiatives can be scaled and replicated relatively easily.”
While COVID-19 propelled changes in the way live and work since 2020, subsequent technological changes have continued to alter consumer behavior and transformed the insurance landscape. These trends have created challenges and opportunities for insurers, accelerating the need for innovation and rewarding the most innovative insurers. The report notes that certain lines lend themselves more readily to innovative strategies than others.
“In response to the evolving risk environment, insurers accelerated their shift to digital technology and intensified their focus on product innovation,” said Jason Hopper, associate director, industry research and analytics, AM Best. “Certain lines lend themselves more readily to innovative strategies than others. Complexity influences innovation adoption. Because the auto/home and health insurance lines deal with large homogeneous risks, initiatives can be scaled and replicated relatively easily.”
![CPPA Takes Aim at Connected Cars in First-Ever Review | Akin Gump Strauss Hauer & Feld LLP - JDSupra](https://dxj7eshgz03ln.cloudfront.net/production/link/image/887688/original_ratio_extra_large_d393f4bc-de58-42fb-856e-2b89eee492af.jpg)
CPPA Takes Aim at Connected Cars in First-Ever Review | Akin Gump Strauss Hauer & Feld LLP - JDSupra
On July 31, 2023, the California Privacy Protection Agency (CPPA) announced an enforcement review of the data privacy practices of connected vehicle (CV) manufacturers and technologies. This marks the first time the state’s new privacy regulator has used its review power under the California Consumer Privacy Act (CCPA) since the implementing CCPA regulations began taking effect in March (see here for more details).
In his press statement announcing the review, CPPA’s Executive Director Ashkan Soltani stated that “[m]odern vehicles are effectively connected computers on wheels…able to collect a wealth of information via built-in apps, sensors, and cameras, which can monitor people both inside and near the vehicle.”
Conditions Are Challenging, Claims Are Elevated, but Reinsurers’ Profits Return: Reports
Despite extremely challenging conditions, with persistent and elevated claims activity, the global reinsurance segment returned an underwriting profit in 2022, according to an AM Best report.
“Reinsurers generally have realigned their risk profiles and are in a strong position to generate the underwriting profits that had been elusive for a number of years,” said the report titled “Global Reinsurers Face Challenges Even as Conditions Improve.”
These positive financial trends are continuing into 2023, with the four main European reinsurers, Hannover Re, Munich Re, SCOR and Swiss Re, all reporting very strong results with returns on capital significantly surpassing their cost of capital, said a separate report published by Fitch Ratings.
“Price increases above claims inflation and better terms and conditions for property & casualty (P/C) have led to better underwriting margins on average.”
AM Best noted that reinsurers’ work to realign their risk profiles “have largely transferred the burden of a heavy cat loss to primary writers.”
Profits improved significantly during the first half of 2023, “thanks to better pricing, lower claims, more favorable terms and conditions and a rise in investment yields,” said Robert Mazzuoli, director, Fitch Ratings, in the report, titled “European Reinsurers: 1H23 Results.”
A Different Kind of Hard Market
The AM Best report indicated the current market is one of the hardest in decades but is very different to previous hard cycles, which were triggered when a major catastrophic event would erode a significant amount of industry capital, leading to a rapid spike in rates.
In the current hard market, the path to adequate prices has taken longer than expected, said the report, explaining that “the last six years have seen a slow, protracted process of reinsurers realigning their risk profiles, reallocating capital, re-underwriting and repricing,” AM Best said.
More Than 20,000 Deaths Recorded on U.S. Roads in First Half of 2023
Traffic deaths in the U.S. have declined slightly through the first six months of 2023, compared to the same period in 2022, according to estimates released by the National Safety Council.
Between January 2023 and June 2023, an estimated 21,150 people died in motor vehicle crashes in the United States, down 3 percent from the first six months of last year, the agency stated.
“While there is a glimmer of hope that progress is being made, these estimates are still a stark reminder of the work that lies ahead,” said Mark Chung, executive vice president of roadway practice at the National Safety Council. “Every life lost on the road is a profound tragedy that leaves a lasting impact on families, friends and communities, and every single one of those deadly crashes was preventable. The estimates further underscore the urgent need for continued efforts to improve road safety across the nation through the implementation of the Safe System approach.”
Somewhat promising was that NSC analysis also showed the decrease in deaths occurred as mileage driven increased 2.3 percent through the first six months of 2023 compared to 2022.
With the decrease in deaths and increase in mileage, the mileage death rate decreased 5.6 percent to 1.34 per 100 million vehicle miles traveled from 1.42 in 2022, the agency noted.
As the nation looks forward to the rest of the year — considered the deadlier half of the year — the agency urged employers, policymakers, community leaders and individuals to come together -in both public and private sectors – to prioritize road safety with the goal of zero traffic fatalities in the United States.
Commentary/Opinion
![Insurance fraud and why insurers no longer have an excuse not to act](https://dxj7eshgz03ln.cloudfront.net/production/link/image/887582/original_ratio_extra_large_41ac3f95-2c29-4453-bcfd-47bcc9e7aef5.jpg)
Insurance fraud and why insurers no longer have an excuse not to act
As high inflation and continued cost-of-living pressures continue to bite the balance sheets and budgets of insurance businesses and insurance customers alike, attention is turning towards the link between recessionary times and increased fraud. And while it shouldn’t take recessionary rumblings for insurance fraud to take its rightful place high on risk registers, all too often it does.
Offering his insights into where the insurance fraud landscape sits today, Rory Yates (pictured), global strategic lead at EIS, emphasized the variety and interconnectivity of the factors at play. Inflation, the fuel crisis, geopolitical tensions, global food shortages and ongoing economic uncertainty are all pain points for the market, he said, and they’re playing out against a backdrop of rapid technological changes enabling complex fraud capabilities.
Take the UK, for example, he said - it’s projected that only £1 billion of the £3 billion lost to fraud each year is even detected. A glance at some of the numbers revealing the scale of the fraud issue globally offers insight not just into the size of the challenge, but also the size of the opportunity it presents to the market. However, he highlighted the importance of recognizing that this opportunity is not just about potential cost savings or increasing efficiencies but also has significant implications for making customers’ and claims handlers’ lives easier and better.
Convergence and the Insurance Ecosystem | Insurance Innovation Reporter
The violently disruptive and confusing shifts we are all experiencing are in large part a result of accelerating convergence of social, mobile, cloud, big data, community and other powerful forces.
Stephen Applebaum and Alan Demers
InsurTech/M&A/Finance💰/Collaboration
![Insurtech innovations set to reshape insurance industry: Waterstreet Study](https://dxj7eshgz03ln.cloudfront.net/production/link/image/887786/original_ratio_extra_large_a39bbdfb-0efa-4126-aa99-5c2f8a0c0fd9.jpg)
Insurtech innovations set to reshape insurance industry: Waterstreet Study
In a study involving hundreds of prominent insurance leaders, Waterstreet has revealed a compelling vision of the future of insurance, shedding light on the transformative impact of insurtech innovations, artificial intelligence (AI), machine learning, and blockchain on the industry landscape.
Survey participants overwhelmingly foresee insurtech startups as the driving force behind industry growth, with a significant 59% backing this belief. This underscores the escalating influence of technology-driven initiatives in reshaping the insurance sector.
The study highlights the consensus among 47% of respondents who consider AI, machine learning, and blockchain as pivotal game-changers in the Property and Casualty (P&C) insurance domain. These technologies are anticipated to revolutionise various aspects of the industry, from underwriting to claims processing.
Effective risk mitigation emerges as a key strategy for profitability, with 41% of industry leaders identifying it as a primary growth driver. Insurers are focusing on predictive data analysis tools, such as safe driving apps and flood detection sensors, to encourage proactive risk management.
In the rapidly evolving tech landscape, robust customer support gains prominence as a critical factor in easing transitions to new systems and products. The study reveals that 45% of respondents prioritise comprehensive customer support during phases of technological transition.
![Unqork’s Codeless Platform Available on Google Cloud Marketplace](https://dxj7eshgz03ln.cloudfront.net/production/link/image/887583/original_ratio_extra_large_6b61d84d-ed25-4f9e-987d-87dc6ef3d7ff.png)
Unqork’s Codeless Platform Available on Google Cloud Marketplace
Unqork, the leading Codeless as a Service platform, has announced the availability of the Unqork platform on Google Cloud Marketplace.
The move allows customers to explore, launch and manage software without having to manually configure the software, virtual machine instances, storage or network settings.
Through the listing on Google Cloud Marketplace, customers can easily access Unqork’s codeless platform to build and run mission-critical applications faster and at a lower cost.
“Unqork’s codeless approach to application development has given our enterprise customers a better way to build and run software at scale, without the intense legacy maintenance that is required of traditional coding and low-code/no-code platforms,” said Sean Dougherty, Head of Alliances & Ecosystem, Unqork. “We’re excited to continue to deepen our relationship with Google Cloud and accelerate our joint customers’ digital transformation journeys.”
Events
![InsurTech Events Calendar 2023-2024 | InsurTech Magazine](https://dxj7eshgz03ln.cloudfront.net/production/link/image/887687/original_ratio_extra_large_6184b82b-df7d-4cea-b68f-e6125e6a87a8.jpg)
InsurTech Events Calendar 2023-2024 | InsurTech Magazine
We round up the top live events, conferences and shows that allow you to gather new perspectives and network with likeminded insurance executives
Like many industries, the insurance sector is keen on a live event or conference – somewhere that industry insiders and decision-makers can gather, network, and hear from those with interesting perspectives on the way the space is going. And thankfully, there is no shortage of top events to plot on your calendar.
But what are the ones worth attending, and how can you sort the major events from the pretenders? We've picked out 10 of our favourite insurance and insurtech-related live events and conferences to help you out.
AI in Insurance
![AI predicts a range for car damage that consumers can use to get an idea of the extent of damage - Carwise.com](https://dxj7eshgz03ln.cloudfront.net/production/link/image/887625/original_ratio_extra_large_973af6f4-9e89-473e-8f35-71609db44f89.png)
AI predicts a range for car damage that consumers can use to get an idea of the extent of damage - Carwise.com
Sometimes it's hard to read all the AI news and figure out how it applies in the day to day. One of the things CCC Intelligent Solutions just released on carwise.com is the ability to upload your car damage photos and our AI predicts a range for car damage that consumers can use to get an idea of the extent of damage and then proceed to book an appointment directly with the repair facility. Several more AI models getting released soon! #AI #CCCIS #cool
Check it our here
John Goodson, Chief Product and Technology Officer, CCC Intelligent Solutions
![Insurtechs launch Ethical AI in Insurance Consortium](https://dxj7eshgz03ln.cloudfront.net/production/link/image/887490/original_ratio_extra_large_62b751a9-ade7-472b-8e71-9de61c64c1a4.jpeg)
Insurtechs launch Ethical AI in Insurance Consortium
Insurtechs have launched an Ethical AI in Insurance Consortium to collaborate on industry-wide standards related to fairness and transparency in the use of artificial intelligence within the insurance industry.
The founding members include Cloverleaf Analytics, Exavalu and Socotra. The consortium hopes to increase knowledge sharing amongst insurance companies, AI developers and regulators, as well as consumer advocacy groups. The organization is working to develop ethical guidelines for the industry related to AI use in underwriting, claims processing and pricing.
What can insurance companies gain from process automation? Learn more about how insurance companies can leverage process automation to drive business growth.
Abby Hosseini, chief digital officer of Exavalu, said in an emailed response that each of the initial founding members are focused on specific areas within the industry.
"We each believe that our unique focus, background and perspectives can add value to carriers and brokers that are racing to leverage the advancements in AI," Hosseini said. "The first objective is to raise awareness of the impact of algorithmic bias on the insurance industry.
Hosseini added that it is important to acknowledge that algorithmic bias is a real problem.
"Perhaps the most important initial impact is to raise awareness of the issue of ethics in algorithmic decision making. Our hope is that by making the issue front and center for the industry, we can help accelerate the use of AI with proper guard rails and best practices rather than try to control AI's increased adoption," Hosseini said. "The second impact we hope for is that the ethical standard brings a higher level of transparency to the industry and hopes to undo decades of mistrust between the insured and the carrier. The success of the consortium can only be measured by its ability to scale the use of AI with sound ethical standards that are followed by the members."
Robert Clark, CEO and founder of Cloverleaf Analytics, said in an email that the consortium is looking to establish a code of ethics.
"This is to help consumers have confidence that their insurance company is applying a code of ethics to implementations of AI that could impact them and to help insurance companies avoid bias towards gender, race, age, etc. that could lead to regulatory action, penalties, or even worse class action suits," Clark said.
The code of ethics will include guidelines on how to avoid bias and guarantee fairness, including addressing transparency in the use of algorithmic models and analytical decision making
People
![Betterview Names Neil Pearson Chief Strategy Officer | Insurance Innovation Reporter](https://dxj7eshgz03ln.cloudfront.net/production/link/image/887584/original_ratio_extra_large_535ad5ad-3f9d-40a1-964a-2d518d4ea59c.png)
Betterview Names Neil Pearson Chief Strategy Officer | Insurance Innovation Reporter
Pearson, a former senior executive at CoreLogic and Arturo, brings over 25 years of experience in InsurTech, Proptech, telecoms, geospatial and image analytics.
Betterview (San Francisco), an InsurTech provider of actionable property intelligence to property/casualty insurers, has announced the hiring of Neil Pearson as the company’s chief strategy officer. Pearson brings extensive insurance and technology experience to Betterview at a time when the company is poised to enter the next phase of its evolution as a property risk intelligence platform featuring a partner ecosystem of data and service providers.