Reports from Day One of Connected Claims USA 2023, Austin, TX  September 27th 2023

Day One Report from Connected Claims USA 2023, Austin, TX

Thomson Reuters Connected Claims is bringing together the industry’s top claims leaders and innovators in Austin, Texas right now.

I make sure to attend sessions at these conferences because I know how essential it is to keeping a pulse on the industry and infusing my life with inspiration. If you’ve seen the agenda, you’ll quickly recognize how valuable it is to be here.

And It’s already proved its value. The fireside chat with Alan Demers, CPCU, AIC and John Goodson, Chief Product and Technology Officer, CCC Intelligent Solutions just happened and had me leaning in the entire time.

They shared insight on the challenge of balancing loss adjustment expense with achieving excellence and the gravity of choosing technology that can adapt because the technology available today will be different tomorrow. It was an invaluable discussion around the key metrics used to evaluate claims performance and the investments made to overcome tech gaps and even retrenchment from what’s been implemented. I’m already re-energized. 🙏 Alan, John, and Thomson Reuters.

Marissa Buckley, CMO, InsurTech Hartford as posted on LinkedIn

Day One Report from Connected Claims USA 2023, Austin, TX

What is the potential for AI and automation powering the future of claims management?

Well, Andrew Cohen, President, Snapsheet Inc; Sean Burgess, Chief Claims Officer, Lemonade; Bob Valliere, EVP Chief Operations Officer, CSAA Insurance Group, a AAA Insurer; Gloria J DiCandia, Head of Claims Experience & Process Optimization, USAA and Lisa Wardlaw, President, 360 Digital Immersion are on stage now to answer this question in the keynote. #CCUSA

Reuters Events Insurance, as posted on LinkedIn

As Auto Insurance Premiums Spike, Some American Drivers Choose the Risk Being Uninsured Over Financial Hardship

Auto insurance is meant to protect drivers from many of the financial risks associated with driving. But as premiums have soared seemingly overnight, American insurance customers have had to make the difficult choice between their monthly budget and peace of mind on the road.

As inflation has affected all sectors of the economy, the costs of repairing and replacing damaged vehicles, medical costs and all other costs associated with an auto insurance claim have increased substantially. Consequently, auto insurance premiums have increased at an unprecedented rate during the past two years (7.9% in 2022, and another 5.9% in the first six months of 2023). As a result, an increasing number of insurance customers in the United States are finding they are no longer able or willing to pay for auto insurance.

According to data collected by J.D. Power, the number of American households with at least one vehicle who say they do not have auto insurance has risen in the first half of 2023, up to 5.7% from 5.3% in the second half of 2022. What’s more, the percentage of customers who say they are shopping for auto insurance is 12.5% through the second quarter of 2023, an all-time high.

Best’s Special Report: U.S. Homeowners’ Segment Challenges Stress Carrier Operating Results

Elevated frequency of natural catastrophes and secondary perils in the first half of 2023 continue to drive deterioration within the U.S. homeowners insurance segment’s financial results, according to a new AM Bestspecial report.

These issues affecting the segment’s underwriting results are being exacerbated by rising loss costs, inflation, and supply chain disruptions that continue to pressure earnings, making it challenging for homeowners’ insurers to maintain rate adequacy.

The Best’s Market Segment Report, “Homeowners Carrier Challenges Stress Operating Results,” notes that AM Best recently revised its outlook on the U.S. homeowners’ market segment to negative from stable.

Key factors supporting that change include pressure on regional earnings from elevated catastrophe activity, increased frequency of losses from secondary perils, inflationary pressures on prevailing claim costs, challenging reinsurance market conditions, and higher retentions and co-participation levels given reinsurance pricing trends.

2023 U.S. Home Insurance Study | J.D. Power

Erie Insurance Ranks Highest in Both Homeowners and Renters Insurance Segments

Homeowners and renters across the country have been receiving letters from their insurance providers letting them know they are being dropped as a combination of catastrophic events, rising costs and regulatory pressures have strained property and casualty (P&C) insurance business models. According to the J.D. Power 2023 U.S. Home Insurance Study, released today, the phenomenon represents opportunity for the carriers that remain, but comes with a need to understand the potential effect these actions have on customer perceptions.

“We’ve all seen the headlines about insurers leaving states like California and Florida where catastrophic weather claims have been at an all-time high, but this pattern is playing out nationwide, affecting thousands of homeowners in every state,” said Breanne Armstrong, director of insurance intelligence at J.D. Power. “Insurers are reworking their actuarial maps, confronting state regulations that cap rate increases and struggling with profitability. For customers, this combination of steadily rising rates and sudden abandonment can create irreparable damage to brand loyalty and perceptions of trust. However, it also creates an opportunity for carriers that can come in and absorb these customers.

This could be a real make-or-break moment for many carriers.”

Natural disasters cost Allstate $864M in two-month span, triggering rate hikes

Allstate reported $551 million in catastrophe losses in August alone, prompting the insurer to implement 7% rate increases throughout five locations.

When announcing its catastrophe losses, which totaled $864 million pre-tax for July and August combined, Allstate said the Maui wildfires accounted for about half of last month’s losses.

Favorable reserve reestimates for prior estimates helped offset the payouts, said Allstate, which has reported catastrophe losses and subsequent rate increases during every month of the year.

“Allstate continued to implement significant auto and homeowners insurance rate actions as part of our comprehensive plan to improve profitability,” said Jess Merten, Allstate’s chief financial officer. “Since the beginning of the year, rate increases for Allstate brand auto insurance have resulted in a premium impact of 8.6%, which are expected to raise annualized written premiums by approximately $2.23 billion.

Travelers Risk Index: Amid Fluctuating and Emerging Business Risks, Cyber Threats Remain a Leading Concern

The Travelers Companies, Inc. (NYSE: TRV) today released its 2023 Travelers Risk Index results, and for the ninth straight year, cyber threats were one of the top three business concerns among the 1,200 survey participants from small-, medium- and large-sized companies.

“A well-designed, multi-layered cybersecurity program can help mitigate the threat of a cyber event, and we encourage organizations to work closely with their independent insurance agent as we all navigate an evolving cyber landscape.”

Of those taking the national survey, 58% said they worry some or a great deal about cyber, ranking it just behind medical cost inflation (60%) and broad economic uncertainty (59%).

Tim Francis, Enterprise Cyber Lead at Travelers, said, “Cyber risks have extremely serious consequences – one attack can weaken an organization or potentially put it out of business. Fortunately, there are effective measures that companies can take to address vulnerabilities and successfully manage through a cyber event.”

Respondents expressed confidence that their company had implemented best cyber practices. However, according to their responses, at least 25% of businesses have not taken essential steps, such as installing firewall or virus protection and implementing data backup and password updates. A much larger percentage say they don’t use endpoint detection and response (64%), conduct cyber assessments for vendors (57%) or customers’ assets (56%), have an incident response plan (50%), or utilize multifactor authentication for remote access (44%).