News
EV growth is surging faster than expected & could hit two-thirds of sales by 2030, studies say
Electric vehicles (EVs) are likely to encompass two-thirds of global car sales by 2030, new studies indicate.
Rocky Mountain Institute (RMI) detailed how three separate reports, including its own, called X-change: Cars, The end of an ICE Age, support the same finding: that the EV market is growing faster than anticipated.
The RMI analysis established ways of modeling the future of EV demand and concluded that EVs will represent between 62% and 86% of vehicle sales by 2030 if the industry continues to solve challenges, such as affordability, that have prohibited growth. By then, it said China’s EV market share will likely reach 90%.
“There is a clear exponential growth pattern for EVs, as rising sales track along an S-curve. Led by Northern Europe and China, and driven by policy, it is taking around six years for EVs to go from 1% to 10% of new car sales. The next stage is quicker still: In leading countries, it is taking another six years to get to 80%,” RMI said in its analysis.
“The new driver of change is economics. Because battery costs enjoy learning curves, total cost of ownership price parity has been reached, and sticker price parity will be reached in every major car market and segment by the end of the decade. That will enable the revolution to widen across the Global South and deepen into other transport sectors.”
Alliance for Automotive Innovation Reports EV Sales 9.1% of New U.S. Light Vehicle Sales in Second Quarter
103 EV models are available for sale in the U.S.
The Alliance for Automotive Innovation released its state-by-state analysis of the U.S. electric vehicle (EV) market for Q2 2023.
The Get Connected Electric Vehicle Report for the second quarter summarizes EV sales and purchasing trends across all 50 states. It includes an analysis of public charging and costs to modernize and upgrade electric utility capacity in the U.S.
According to the report, there are more EV models on market and sales were up both month-over-month and year-over-year.
Key findings include:
103 EV cars, utility vehicles, pickup trucks and van models now available for sale in the U.S. in Q2 2023. Light truck sales represent 74 percent of EV market;
EVs represent 9.1 percent of new light-duty vehicle sales in Q2 2023, up from 8.6 percent in Q1 2023 and 6.6 percent in Q2 2022;
Nearly 355,000 EVs sold in U.S. in Q2 2023, a 58 percent increase over Q2 2022;
Top five states for EV sales in Q2 2023: California (25.9 percent); District of Columbia (18.7 percent); Washington (17.2 percent); New Jersey (13.5 percent) and Oregon (13.4 percent).
Commercial lines premium growth expected to continue: Swiss Re
Swiss Re Ltd. said Friday it has raised its premium growth estimate for commercial lines to 9.0% from 7.5% in 2023 and still expects 5.5% growth in 2024.
“Overall, we expect rate increases through 2023 as inflation and catastrophes put upward pressure on claims and operating costs,” the reinsurer said in a report.
Average rates for commercial lines increased by 8.9% year-on-year in second-quarter 2023, up slightly from 8.3% in 2023, according to the latest figures from CIAB survey reports, Swiss Re said. Property rate increases decelerated slightly to 20% after a 21% increase in first-quarter 2023.
The report also said the forecast combined ratio for the property casualty sector will decline in 2024 to 98.5% from a forecast 102% in 2023 as declining inflation exerts less pressure on loss severity and profitability.
The annual combined ratio for 2022 was 102.7%, but the figure surged to 107.3% in second-quarter 2023.
Best’s Special Report: First-Half 2023 Net Income in U.S. Life/Annuity Insurance Industry Declines by More Than 39%
Net income for U.S. life/annuity (L/A) insurance industry decreased by 39.5% in the first half of 2023, dropping to $13.2 billion from $21.9 billion in the same prior-year period, according to a new AM Best report.
This financial review is detailed in a new Best’s Special Report, titled, “First Look: Six-Month 2023 U.S. Life/Annuity Financial Results,” and the data is derived from companies’ six-month 2023 interim statutory statements that were received as of Sept. 7, 2023, representing an estimated 98% of total industry premiums and annuity considerations.
The drop in net income was driven partly by $9.4 billion in net realized capital losses, according to the report. Total income in the L/A industry rose 11.6% to $528.9 billion from the prior-year period, driven by a 13.8% increase in premiums and annuity considerations and a 3.9% increase in net investment income. A resulting pretax net operating gain of $29.6 billion reflected an 18.8% increase from the prior year period.
Capital and surplus declined slightly from the end of 2022 to $480.7 billion, as $22.7 billion of net income, change in unrealized gains, contributed capital, and other changes in surplus were reduced by $25.0 billion, consisting of a change in asset valuation reserve and stockholder dividends.
To access the full copy of this special report, please visit .
Calif. Commish Calls for Biggest Reform Since Prop 103; Planned Fixes Detailed
California Insurance Commissioner Ricardo Lara announced a package of sweeping executive actions that include changes to the FAIR Plan, new rules for the review of climate catastrophe models, and public meetings exploring incorporating California-only reinsurance costs into rate filings—changes he says will improve insurance choices and protect Californians from increasing climate threats.
The California Department of Insurance is calling it the largest insurance reform since voters passed Proposition 103 nearly 35 years ago. The latest reforms also call for changes to Prop 103, which include changes to the controversial intervenor process.
California’s Sustainable Insurance Strategy is described as comprehensive approach building a multi-year effort to modernize California’s insurance market.
California Gov. Gavin Newsom also issued an executive order urging prompt regulatory action that supports Lara’s actions for communities affected by climate change.
The actions announced are aimed at addressing problems fueled by climate change, including global inflation and increased costs for rebuilding that have led to several insurance companies pausing coverage for writing new homeowners and commercial insurance policies, according to the CDI.
GEICO plummets down TV ad rankings
Ad impressions for insurance giant GEICO have plummeted in 2023 while Progressive jumped up the rankings in a year of cutbacks for insurers, according to a recently released report.
GEICO, which took the top spot as the most-seen insurance brand in 2021 and was third in 2022, fell to fourth place in iSpot.tv’s 2023 Insurance Brands TV Ad Transparency Report rankings by TV ad impressions.
GEICO’s household TV ad impressions fell 70% year-on-year.
The insurer concentrated more heavily on dayparts, which include primetime, weekend afternoons and daytime slots, according to the report.
GEICO, which was approached for comment, reportedly slashed jobs in its marketing team in late 2022. From cavemen to geckos, the insurance company is well known for its mascots and catchy adverts.
Rival Progressive moved into the top spot in the ad rankings, claiming a 22.36% share of insurance TV ad impressions, up from 15.12% for the same period the previous year.
Last year’s most-seen insurance brand, Liberty Mutual, was in second with a 14.48% share, while Allstate was third with 7.1%.
State Farm held onto the fifth spot, with a shrinking 4.63% share.
Commentary/Opinion
Tech Secret to a Combined Ratio Below 100%
While large personal auto insurers have adopted telematics-based programs, they’re only scratching the surface of the potential benefits.
KEY TAKEAWAY:
The 2023 aggregated combined ratio for personal auto insurance is expected to be 106%, but, done right, a telematics program can lower that combined ratio as much as seven percentage points on the entire auto insurance portfolio. Research shows:
three-point improvement at a portfolio level, achievable within months, via a structured behavioral change program;
three-point improvement based on improved claims management and increased self-service;
- 0.5 to one-point improvement based on retention — telematics for auto insurance programs can help increase retention by about 20% compared with traditional portfolios.
Matteo Carbone, founder and director of the Connected Insurance Observatory and a global insurtech thought leader and Deepak Karthikeyan, associate vice president at ValueMomentum
Do You Have FOMO on Gen AI?
Tech leaders are feeling pressure to integrate generative artificial intelligence into their programs, but some caution is in order.
KEY TAKEAWAY:
Whether you're implementing AI algorithms or large language model (LLM) tools like ChatGPT, rushing to implement tools without expertise can hurt claim accuracy, data security and confidentiality. As with any new product or service, solutions need to be developed with those who have vast industry knowledge, specific to users’ needs, and must meet the high standards our industry requires for data integrity, confidentiality and the trust our customers expect.
Growing mainstream use of GenAI tools like ChatGPT have supercharged the desire to adopt this technology in every industry, including P&C. GenAI enables interfaces that allow users to engage with AI through natural language, dramatically improving usability.
GenAI has prompted the technology community to invest significantly in more powerful computing solutions, creating a powerful, virtuous cycle that is very exciting. Tech leaders are now being pressed to deliver programs that integrate generative artificial intelligence into their claims workflows.
Alex Sun, CEO of Enlyte (formed through the merger of three companies in the workers' compensation and Auto Physical Damage sector: Coventry Workers Comp Services, Genex Services and Mitchell International
What’s ahead for independent insurance brokers?
Modern customers feel empowered to make choices about their insurance coverage thanks to the wealth of knowledge at their fingertips, but with shifts in the market and economy, many find themselves facing insurance gaps when it comes time to actually file a claim.
According to a 2022 Harris Poll on behalf of VIU by HUB, of those who said they had filed a claim on their insurance policy in the last five years, 40% said they had an event where their policy didn’t cover their claim in the way they had expected, and just over 80% of policyholders said there were things about their homeowners or auto policies they would like to better understand.
So, what can customers do to ensure they get the proper coverage? Turn to the experts. For this episode of Insurance Speak, we were joined by one such expert – Bryan Davis, EVP and head of VIU by HUB – to talk about the value independent brokers offer to customers, and where the future of brokerages is headed.
One of the most important traits brokers can have, Davis said, is neutrality.
“The nature of the definition of a broker is that the broker is totally focused on the customer versus the other entities that the broker may be serving as well,” he explained. “So, the neutrality of being totally customer-centric is the number one value in addition to that, that comes with a neutrality element.”
InsurTech/M&A/Finance/Collaboration
Vesttoo saga continues with court-ordered foreclosure on founders’ assets
Decision comes following injunctions filed by embattled insurtech
Legal Insights Vesttoo saga continues with court-ordered foreclosure on founders’ assets Vesttoo saga continues with court-ordered foreclosure on founders’ assets Decision comes following injunctions filed by embattled insurtech Vesttoo saga continues with court-ordered foreclosure on founders’ assets Legal Insights By Terry Gangcuangco
Sep 25, 2023 Share facebook sharing buttontwitter sharing buttonlinkedin sharing button The saga surrounding embattled insurtech Vesttoo continues with a court-approved foreclosure on the founders’ assets.
In a release sent to Insurance Business, Vesttoo noted that it had filed an injunction with the district court in Tel Aviv, requesting to seize huge sums from co-founders Yaniv Bertele and Alon Lifshitz, former employees Udi Ginati and Joshua Rurka, and Tal Ezer who served as a finder for the company.
In another injunction, Vesttoo had also requested a temporary freeze on the abovementioned individuals’ bank accounts, real estate assets, and any stock, as well as a freeze on wire transfers from a Swiss bank account.
AI in Insurance
(2) How Generative AI is Shaping the Future of the Insurance Industry
Last week, I had the opportunity to attend Celent’s Generative AI Symposium in Chicago. I was fortunate to learn a lot and meet many knowledgeable professionals. It was the first time I had attended an event on this particular technology topic, but giving where we are headed at DigitalOwl and the explosive buzz of Generative AI, it was a great opportunity to hear what some of the other experts in the industry are saying.
The whole event centered around Generative AI. In this blog, I’ll talk about some of the things I learned at the Celent event, including the different types of AI, how AI can revolutionize the insurance industry, how AI is creating new jobs, things to consider from a regulatory perspective and much more.
Sean Allen, SVP Sales and Marketing, DigitalOwl
Canada
Home insurance prices to increase as much as 15% after wildfires
Home insurance prices are expected to rise after a historic wildfire season, with one analyst placing the rise between five to 15%.
“With increased risks from climate change, the insurance landscape is bound to change, affecting home affordability,” Walter Melanson, lead market analyst for PropertyGuys.com, told the Toronto Sun.
“The recent wave of wildfires has brought environmental concerns to the forefront and unveiled intricate challenges that extend to housing, prices, government involvement, insurance costs, and investor interests. These wildfires could influence property values, buyer behaviour, and the overall housing market dynamics,” he added.
The wildfires in Nova Scotia alone had destroyed more than 200 homes. Experts warn that its impact could be more widespread.
As the cost of claims increases following the frequency of disasters, higher inflation, increased interest rates, and higher labour costs, insurers need to adjust their premiums to continue their business, Melanson explained.
“The figures came out when people were panicking. And so, when you are quick to come out with a number like five-to-15 percent, often it ends up being higher than that,” he said.
Events
ITC Vegas - The Future of Insurance is Here | October 31 – November 2, 2023 | Las Vegas
ITC Vegas, presented by McKinsey & Company, is the world’s largest gathering of insurance innovation – offering unparalleled access to the most comprehensive and global gathering of tech entrepreneurs, investors, and insurance industry leaders