News
US private auto insurance rates see double-digit jump in 2023 | S&P Global Market Intelligence
US private auto insurers are racing to increase premium rates as they seek to offset historically poor underwriting results.
The year-to-date nationwide average increase for private auto insurance is 11.0% through Aug. 18, 2023, according to S&P Global Market Intelligence's RateWatch application. However, there is a wide variance in the effective rate change between individual states.
Nevada has had the highest overall calculated effective rate increase so far in 2023 at 27.9%, compared to a low of 2.5% in Idaho.
In total, 32 states reflect a double-digit increase based on about 8.5 months of approved rate filings.
![USAA limiting new HO business in CA starting next March](https://dxj7eshgz03ln.cloudfront.net/production/link/image/889400/original_ratio_extra_large_306aaa3b-a5f3-4285-8f45-785102dc2e07.png)
USAA limiting new HO business in CA starting next March
Beginning in March 2024, auto and home insurer USAA will sharply limit new homeowners' business in wildfire-prone areas of California, citing “rate inadequacy due to wildfire risk” in filings with the state’s insurance department.
![Why are there huge drop-off rates among telematics app users?](https://dxj7eshgz03ln.cloudfront.net/production/link/image/889050/original_ratio_extra_large_695283dd-1761-4848-87dc-4caff9a3a47d.jpg)
Why are there huge drop-off rates among telematics app users?
Expert breaks down why scoring is boring, and what insurers can do better
Telematics applications have emerged as game-changing technology for the auto insurance industry. But while the uptake of the technology has steadily increased worldwide, carriers are also seeing rapid drop-off rates from app users, according to one telematics expert.
Also known as fleet tracking, telematics allows users to plot the movement of cars, trucks, and other vehicles using satellite technology and on-board diagnostics, a computer system inside a vehicle that tracks and regulates its performance. Carriers leverage this technology to make informed decisions about a driver’s risk.
Drivers are initially lured to telematics-based insurance policies on the promise of cheaper premiums. But poor engagement on carriers’ apps is leading users to quickly lose interest, said Andrew Brown-Allan (pictured below), executive vice president, growth (EMEA) at Insurance & Mobility Solutions (IMS).
“Several major insurers are seeing some quite alarming drop-off rates or a lack of consistency, where a very high percentage of users drop out of app interaction after the first 30 days,” he told Insurance Business.
“Insurers are investing big in creating these programs to have a tool that becomes impotent after the first 30 days, and it's a lost opportunity.”
The race for personalized insurance experiences
Smartphone apps have become the primary method of capturing telematics data as global insurers race to go to market with more personalized approaches to auto insurance policies.
The global market for usage-based insurance (UBI) is expected to reach $67.8 billion by 2032, growing at an astounding rate (CAGR of 29.2%), according to research firm Specialty Insights.
“The app is the center of around 90% of enacted insurance propositions that we've helped take to market over the past couple of years, and certainly 90% of the inbound demand that we experience on a daily basis internationally,” Brown-Allan said.
Commentary/Opinion
Will Generative AI Turn Insurers in Favor of Automation?
Insurance company culture may change, but it is more likely to adopt generative AI by arguing for augmentation of existing capabilities rather than automation of jobs
I’ve worked with hundreds of insurance companies over the last two decades, and the industry culture tends to take a “people over process” approach, by which I mean many companies avoid technology investments that are purely about automating people out of jobs. There are obviously many reasons that more issuance, underwriting, actuarial, and claims adjudication tasks haven’t been automated (legacy technologies, agent relationships, complexity) but a culture of maintaining humans in the process is a major explanation given by insurers themselves.
While this is not universal—even insurers who put their people above any technology strategy still take opportunities to automate lower-value areas—this current runs strong throughout the industry, even within large multinational insurers heavily invested in innovation. It has significantly influenced the evolution of insurance IT
Jeff Goldberg is a technology strategist and entrepreneur in the insurance industry who focuses on utilizing technology innovation to drive business growth
When insurance companies use aerial imagery to make underwriting decisions, there are a slew of data privacy rules they need to take into account.
"Where there is great power there is great responsibility." –Winston Churchill
To paraphrase Winston Churchill and Spider Man, with more data and more sophisticated artificial intelligence, comes more responsibility.
Case in point: When insurance companies use aerial imagery to make underwriting decisions, there are a slew of data privacy rules they need to take into account.
For instance, under the California Consumer Privacy Act, any company that collects personally identifiable information must obtain the consumer's consent and notify the person each time it gathers new data. It must also be careful about how it uses and protects that data, and prevent errors such as associating a swimming pool in an image with the wrong homeowner.
Of course, data privacy is just one of many concerns insurers face when they use alternative data and AI to deny or revoke homeowners coverage or refuse to reimburse a patient for a test or medication. There are broader ethical concerns and reputational damage as such cases become public.
Telematics is another technology that is bound to trigger privacy and ethics questions for insurers. A J.D. Power study found that consumer adoption of telematics and usage-based insurance is on the rise, because consumers are seeking to save money on auto insurance. Some consumer advocates worry that insurers could use telematics data to unfairly discriminate against consumers. For example, a customer could be tagged as low-income, and therefore a perceived higher risk, based on location data that show the neighborhoods in which they live and drive.
Actuaries worry about unintended unfair discrimination as they increasingly use AI-based models in their work.
"Historically, eliminating biases has been a challenge for the life insurance industry, and the availability of data and advanced algorithms are changing the landscape of self-selection," Hezhong (Mark) Ma, vice president and managing actuary at Reinsurance Group of America told Digital Insurance this week. "Many companies realize that changes are due and are working to gain clarity around how to test and mitigate unintended biases."
Convergence and the Insurance Ecosystem
Companies must anticipate the future, innovate beyond their core and transform their capabilities as rapidly as technology allows.
KEY TAKEAWAYS:
--Convergence means many parts of the industry are consolidating, and strategic partnerships are proliferating. Platforms and marketplaces are springing up and bringing many product offerings together. Home life and the workplace are converging, as are technologies such as those that enabled the smartphone.
--Today's insurance services will become increasingly obsolete. Drawing on technology, insurers are already shifting their value proposition from “repair and replace” to “predict and prevent.” This shift will change almost every aspect of insurance, including skills requirements, product design, distribution and pricing models.
Stephen Applebaum and Alan Demers
InsurTech/M&A/Finance💰/Collaboration
The state of InsurTech worldwide
I crunched that 60-pages report for you and took away five key learnings on he state of InsurTech worldwide:
- The slowdown seems to be over
- Valuations at later stages are still challenged
- The activity across maturities is more balanced again
- The US tended to be more active than other geographies
- Corporate VC took advantage of the market.
Read the full report here >>>>
Florian Graillot, Founding Partner, AstoryaVC, InsurTech Weekly
![Top 10 Innovative Insurtech Services: InsurTech Digital's Expert Picks](https://dxj7eshgz03ln.cloudfront.net/production/link/image/889504/original_ratio_extra_large_9ad2bbc0-9154-467e-b10b-1ecf594bc796.jpg)
Top 10 Innovative Insurtech Services: InsurTech Digital's Expert Picks
As insurtechs proliferate the market to streamline insurance processes, we look who is offering the most innovative insurance-types on the market today
With insurtechs springing up left, right, and centre, it can get overwhelming when trying to pick out the most innovative suppliers and products on the markets from the rest of the field.
Worry not, InsurTech Digital has done the hard work for you. Below are our Top 10 insurtech products and services providers.
![Top insurtech funding rounds, August 2023 | Digital Insurance](https://dxj7eshgz03ln.cloudfront.net/production/link/image/889834/original_ratio_extra_large_60c63a6d-144a-4dca-8cea-c66d92d9f61a.jpeg)
Top insurtech funding rounds, August 2023 | Digital Insurance
There were more than 30 funding events in the insurtech sector between August 1 and August 31, 2023, according to a review by Digital Insurance. What follows is a selection of these, focusing on those in the P&C and life insurance sectors that are part of the venture-capital financing model. (Other funding events, such as private-equity infusions, are included in the overall count)
A portion of the data was sourced from Crunchbase. Other information, including quotes from investing VCs, comes from company announcements. For our previous edition, which covered the month of July, click here
These updates will continue monthly.
![Ohio Launches Two VC Funds Worth US$110 Million for Tech-Based Companies | Insurtech Insights](https://dxj7eshgz03ln.cloudfront.net/production/link/image/889225/original_ratio_extra_large_78f9c54d-0465-4fb8-858e-5f3c3b48f525.jpeg)
Ohio Launches Two VC Funds Worth US$110 Million for Tech-Based Companies | Insurtech Insights
According to reports, the funds, called the Ohio Early Stage Focus Fund and the Ohio Venture Fund, have been designed to boost early-stage capital investment in Ohio tech companies.
The Ohio Department of Development said the Early Stage Focus Fund will provide capital to investment funds to support early-stage businesses that are woman or minority-owned or based in an area that has been underserved by venture capital.
![Beazley introduces parametric tornado disaster benefit insurance - Reinsurance News](https://dxj7eshgz03ln.cloudfront.net/production/link/image/889055/original_ratio_extra_large_b26df485-e072-4142-b134-38bbce26bb8d.png)
Beazley introduces parametric tornado disaster benefit insurance - Reinsurance News
Specialty insurer Beazley has introduced the first admitted parametric tornado disaster benefit insurance for homeowners, in partnership with Sola Technologies and Spinnaker Insurance Company.
The innovative Tornado Crisis product leverages National Weather Service (NWS) data to automatically initiate a fast and straightforward claims process.
Neil Kempston, Head of Incubation Underwriting at Beazley, commented: “Beazley is well known for its focus on ensuring clients have a seamless and stress free claims process. By applying data and technology, we believe the new Tornado Crisis Insurance product will further improve the situation for policyholders who need a fast claims payment in the aftermath of a tornado.
“We are pleased to be supporting this innovative new solution which can help policyholders with the immediate challenges following a tornado.”
The new product offers early payments to help policyholders deal with the immediate impact following a tornado. The NWS will confirm the path and severity along the path, based on the EF (Enhanced Fujita) scale of a tornado, which then acts as a trigger for payments to be generated.
Sola aims to pay the disaster benefit shortly after the event, compared to the extended time it often takes for traditional policies to pay out, the company explains.
The policy limits of up to $15,000 are intended to cover the deductible and immediate expenses. The coverage can supplement a comprehensive homeowners or renters policy and is currently available in 15 US states in the Midwest and Southeast. More is expected to come online soon.
AI in Insurance
Revving up auto repair innovation to navigate the winding road ahead
It is essential for leaders in the industry to understand AI, machine learning, and other changes in technology in order to navigate them successfully.
There is a transformation happening in the auto claims and repair industries, marked by rising insurance and manufacturing costs, changing consumer behaviors, and automation revolutionizing legacy processes. We’re in a period of rapid change in the industry, and with no signs of slowing down, artificial intelligence (AI), machine learning, and other technology are fundamentally altering how we do business. For this reason, it is essential for leaders in the industry to understand these changes in order to navigate them successfully.
Bill Brower, vice president of industry relations, Solera
![6 insurance use cases for large language models](https://dxj7eshgz03ln.cloudfront.net/production/link/image/889061/original_ratio_extra_large_7808a4e4-4657-49fe-808a-f2eef420ae91.jpeg)
6 insurance use cases for large language models
Advancements in technology are revolutionizing the operations of organizations, including insurance companies. Reinsurers, agents, brokers and MGAs have adopted advanced cognitive solutions to enhance efficiency and meet the evolving expectations from policyholders. Now, with the proliferation of generative artificial intelligence, insurtechs and insurance organizations are looking for ways to further harness the potential of powerful AI tools and language models.
Insurance companies continuously seek ways to manage risks more effectively, improve accuracy, automate policy reviews, and enhance underwriting efforts. And generative AI tools offer a clear solution to these challenges. However, understanding prompt engineering is crucial to fully capitalize on the possibility of solutions like ChatGPT, Bard, Alpaca, and LLaMA AI.
Prompt engineering involves constructing effective inputs for a generative AI tool to achieve desired outputs. In the case of platforms like ChatGPT, prompt engineering focuses on improving the queries posed to the language model to obtain precise and desired responses.
Let us explore several use cases where prompt engineering can benefit insurers.
1. Streamlining claims processing
According to McKinsey, a digital claims function can result in a 20% increase in customer satisfaction scores and a 25-30% reduction in claims expenses.
2. Enhancing fraud detection
3. Driving efficiency gains
Manish Khetan, President Of Strategic Accounts, Xceedance
People
Symington Officially Takes Over as New CEO of Big I
Charles Symington is the new president and chief executive of the Independent Insurance Agents & Brokers of America (the Big I), effective Sept. 1.
Last September, Symington was promoted to executive vice president and selected to succeed Bob Rusbuldt, who has retired as president and CEO. Symington joined the organization nearly 20 years and was previously senior vice president for external, industry and government affairs.
Charles Symington
He has been regularly recognized by The Hill newspaper as a top lobbyist in Washington, D.C., and has been a key leader in many industry coalitions on Capitol Hill, advocating on issues important to Big I members. Big I said it has had numerous legislative wins under Symington’s leadership, including securing substantial small business tax relief, defending a modernized state regulatory system for insurance, preserving the Federal Crop Insurance Program and National Flood Insurance Program, and extending the Terrorism Risk Insurance Act (TRIA).