Commentary/Opinion
Triple-I Outlook: Insurance Economic Drivers Could Outperform U.S. Economy By 2025 But Major Hurdles Remain
Economic drivers of the U.S. property/casualty insurance industry could cumulatively expand f The economic drivers of the U.S. property/casualty (P/C) insurance industry could cumulatively expand faster than the nation’s gross domestic product (GDP) in 2024 and may outperform the overall U.S. economy by 2025, according to the Insurance Information Institute’s (Triple-I) latest Insurance Economics Outlook.
“Growth drivers specific to P/C performance have been improving faster in 2023 than the rest of the U.S. economy, after underperforming the wider economy three years in a row,” said @iiiorg Chief Economist Michel Léonard, Ph.D., Triple-I, in the organization’s Q4 2023 Outlook.
“We forecast P/C growth of 2.1 percent in 2023, slightly above our earlier expectation of 1.9 percent. This confirms our expectation from January 2023 that the gap between P/C and overall growth would continue to narrow this year. P/C underlying economic growth should continue to improve over the next three years, potentially outperforming the wider economy by 2025.”
Insurers Can Promote Healthier Lifestyles
A behavioral change model has proved successful in promoting healthier behaviors among a broad range of policyholders.
About 30 years ago, Adrian Gore and Barry Swartzberg harbored an intuition that introduced a different perspective on people's well-being. This approach, known as Vitality, has since matured into a methodology primed to serve as a fundamental competency for any insurer in the future.
The insurance sector has wholeheartedly embraced the notion of incorporating preventive measures, as aptly expounded in the Geneva Association's publication titled "From Risk Transfer to Risk Prevention." Cultivating less risky behaviors among policyholders in personal lines and among frontline employees in commercial domains is the indispensable path toward realizing this aspiration.
The conventional medical approach centers on employing medical interventions once a disease has manifested. This approach entails prolonging life by extending the period spent in somewhat suboptimal health, albeit with variations contingent on the nature of the disease. Conversely, Vitality's behavioral paradigm concentrates on promoting healthier lifestyle choices capable of elongating the duration of the policyholder's time spent in a state of optimal well-being, thus further extending their lifespan.
**Matteo Carbone is founder and director of the Connected Insurance Observatory and a global insurtech thought leader."
The Future of Insurance Fraud
Three innovations will shape the future of insurance fraud detection and prevention: holograms, the metaverse and synthetic identities.
KEY TAKEAWAYS:
- Taking depositions remotely via hologram can allow for body language to be inspected as closely as it can be in person, allowing credibility to be assessed more accurately.
- Insuring metaverse property will require new, tailored insurance policies and legal frameworks.
- Synthetic IDs -- which combine real information such as Social Security numbers and addresses with fake information to create identities for nonexistent people -- are a whole new level of threat.
In a rapidly evolving era defined by technological advancements and digital innovation, the landscape of insurance fraud is undergoing unprecedented transformation. Insurers and investigators find themselves at the forefront of a battle against fraudsters armed with new tactics. To maintain a competitive edge, we as industry experts must foresee the trajectory of insurance fraud and comprehend the indicators that can help us distinguish authentic claims from fraudulent ones.
In particular, there are three critical innovations that will shape the future of insurance fraud detection and prevention: holograms, the metaverse and synthetic identities
Joe Stephenson is the director of digital intelligence at Intertel
Using data to better understand risks
Our clients are often risk managers of large corporates and one of their main aims is to understand and monitor the diversity of risks of their different subsidiaries, across all of their assets - from people to products, processes and real estate, to name a few.
Broadly speaking, clients are looking for three things from the claims journey. First, the ‘what’ - expertise about different contracts, laws and jurisdictions, markets and lines of business specificities, information that can be gained from years of experience encompassing multiple loss scenarios. Clients need us not just to use our expertise to help settle a claim, but also to derive an understanding of losses and help identify future trends.
The second thing clients are looking for is the ‘how’. Here they want rapid loss notification acknowledgment, responsiveness and proactivity, and transparency about the status of their claim.
Last but not least, the ‘who’. This requires an understanding of the client’s financial context and strategic priorities and its role in its industry. This understanding is aided by long-lasting relationships.
What are technology and data bringing to the claims journey?
Clients want their insurance partner to have the ability to use technology and data to help them understand their losses and, ideally, to improve loss prevention and reduce the risk of further claims. There is a huge potential for insurers to go beyond their traditional role of paying valid claims and using mainly spreadsheets to communicate with clients.
With technology and data, we can give our clients more meaningful loss data insights, that help us to deliver on these three dimensions of client needs
AXA XL
News
S&P: Struggles in Personal Auto Insurance to Subside Slower Than Expected
S&P Global Market Intelligence projects that personal auto results will improve from 2022’s worst-in-decades combined ratio of 112.2%, though not as rapidly as the organization’s experts previously expected.
Continued pressure on claim severity across coverages has prolonged post-pandemic recovery for the personal auto business, and carriers will continue to implement large rate increases in the near term, S&P GMI shared in its latest U.S. Auto Insurance Market Report.
Tim Zawacki, principal insurance analyst at S&P Global Market Intelligence, said that the company’s “revised forecast for 2023 direct premiums written growth of 15.9% would easily surpass the previous 25-year-high rate of increase of 10.2% in 2003.”
“The post-pandemic return to normalcy has played out differently than most market participants envisioned,” he said. “Stubbornly elevated crash severity has defied the longer-term trend, reflecting secular changes in working patterns and other factors that have resulted in more wrecks occurring at higher rates of speed.”
Nearly 50% of EV owners chose ICE vehicle for subsequent purchase, S&P Global Mobility study shows
Nearly half of households with non-Tesla electric vehicles (EVs) made an internal combustion engine (ICE) vehicle their next auto purchase, according to a new analysis.
It doesn’t necessarily mean they sold their EV, as it could also indicate they purchased an additional family vehicle that is gasoline powered.
S&P Global Mobility said its findings indicated that the fuel type loyalty rate for mainstream EV households was 52.1% through July of this year. That figure represents those who remained true to EVs after buying their initial one.
“Between Tesla picking off EV intenders, and the draw of internal combustion strengths such as towing and payload, legacy ICE automakers face a battle to increase EV loyalty as they transition,” S&P Mobility said. “Doubling down on EVs to expand their lineups might be the required path to ensure continued loyalty to brand and fuel type.”
Tom Libby, S&P Global Mobility’s associate director for loyalty solutions and industry analysis, said the results aren’t likely to be welcomed by automakers embracing the EV market.
“The OEMs are spending huge amounts of money to develop EVs,” Libby said. “The last thing they want is for an EV owner to go back to ICE.”
InsurTech/M&A/Finance💰/Collaboration
Urgently Announces Successful Closing of Merger With Otonomo Technologies & Effectiveness of S-1 Registration Statement
Combination creates new generation mobility services company with more than 100 partnership agreements covering up to 70 million vehicles in 26 countries
Urgent.ly, Inc. (“Urgently”), a U.S.-based leading provider of digital roadside and mobility assistance technology and services, today announced the closing of its acquisition of Otonomo Technologies Ltd. (“Otonomo”). In addition, Urgently’s registration statement on Form S-1 (the “Registration Statement”) has been declared effective by the U.S. Securities and Exchange Commission (the “SEC”). Urgently anticipates its common stock will begin trading with Nasdaq under the ticker symbol “ULY” later today.
“I am thrilled to announce the completion of this transaction, which further strengthens Urgently’s unique market position as a leading roadside assistance software provider,” said Matt Booth, CEO of Urgently.
“This acquisition is the result of the outstanding contributions of our employees and the support of our powerful ecosystem of Customer-Partners and Service Provider professionals. We are committed to leading the transformation to connected mobility and we look forward to continuing to improve proactive and preventative customer experiences.”
Operational Highlights, Urgently and Otonomo Together:
- More than 100 partnership agreements with Customer-Partners including automotive OEMs, fleet managers, insurance providers, rideshare and delivery companies.
- 12,000 service providers, experienced service professionals who deliver roadside assistance as of June 30,2023
- Up to 70 million consumer vehicles supported with roadside assistance, proactive maintenance and repair services
- More than 26 countries of operation
- Approximately 4.5 million service requests facilitated as of December 31, 2022
The Floow Crash Detection Service exceeds 80% in Precision and Recall and is foundational to the FloowClaims product suite
Employing cutting-edge signal processing and machine learning, our Crash Detection service detects crashes and accidents based on smartphone sensors, exceeding 80% in Precision and Recall.
The Floow Crash Detection Service forms the cornerstone of our eFNOL suite, designed to enhance road safety and curtail insurance costs. This service empowers the precise identification of crashes or accidents involving mobile phone users while they’re driving a vehicle on the road.
Our app-based Crash Detection feature seamlessly operates on both IOS and Android platforms. The service operates in the background, sampling data at high frequency from phone sensors, without the need for user intervention.
Employing cutting-edge signal processing and machine learning, our Crash Detection service analyses real-time data to discern pivotal road events. By analysing factors such as acceleration, directional shifts, and vehicle dynamics, our service identifies potential crashes and generates notifications for action.
Crash detection serves as the catalyst for our eFNOL functionality, empowering the FloowClaims product suite.
The insurance sector grapples with soaring claims costs across diverse domains, particularly in the motor industry, where claims continue to surge at an alarming rate. In the United States, the average claim cost has escalated to $7,5791, while in the United Kingdom, it stands at £5,349 ($6,487)2.
Against this background, FloowClaims deliver substantial value to our insurance partners, as well as the insured drivers themselves. For end-users, a crash is a source of extreme stress, addressable with prompt, data-driven support around recovery and claims reporting assistance. For insurers, real-time crash notifications deliver immediacy of service to customers in need and significantly reduce operational costs.
iink Raises $12.0MM Series A to Become Leading FinTech Platform in Property Insurance Restoration
iink, a digital payments network that expedites the disbursement of funds associated with multi-party property insurance claims, announced it has raised $12.0MM in a Series A financing round led by the global venture capital firm Headline.
The round included participation from Motley Fool Ventures, Chartline Capital Partners, Silver Circle Ventures, and several of iinks’ existing investors. The financing will allow iink to invest in strategic integrations with mortgage servicing banks and insurance carriers to create an entirely digital and automated workflow. This will allow restoration work to occur with greater ease and expediency.
There are hundreds of billions of dollars in insurance claim payouts that are delayed weeks, sometimes months due to a fragmented paper driven process called loss draft. It’s an area that is ripe for digital transformation and iink has perfectly positioned itself as a conduit for carriers, banks, contractors, and property owners to communicate and keep the restoration process moving. iink, however, has even grander aspirations.
White Mountains to Acquire a Majority Stake in Bamboo
White Mountains Insurance Group, Ltd. (NYSE: WTM) ("White Mountains") announced today that it has entered into an agreement to acquire a majority stake in Bamboo Ide8 Insurance Services, LLC ("Bamboo"), an MGA focused on the California homeowners insurance market.
White Mountains expects to invest approximately $285 million, including primary capital to support Bamboo's growth, and to acquire approximately 70% of Bamboo basic shares outstanding.
Bamboo was launched in 2018 by John Chu, a seasoned insurance executive. Bamboo provides homeowners' insurance for over 100,000 California policyholders, using its technology-enabled underwriting platform to select and manage risk. Bamboo has grown profitably and rapidly in the challenging California market, and is now poised to expand into other states. John and the current Bamboo management team will continue to lead the business through its next phase and will retain a significant equity stake.
"We are pleased to make this investment alongside John and the Bamboo management team. Bamboo is delivering a much-needed insurance alternative to homeowners in California. Bamboo has strong momentum, and we look forward to supporting its continued growth," said Chris Delehanty, Head of M&A of White Mountains.
"This transaction marks a new and exciting chapter for Bamboo. We are fortunate to have found a like-minded capital partner who shares our vision and has a strong track record of successful insurance partnerships," said John Chu, Founder and CEO of Bamboo.
People
Tech Veteran Marty Smuin Named CEO of Arturo
Arturo, the property intelligence company that delivers portfolio-wide underwriting, risk, and claims insights, along with its board of directors, today announced the appointment of Marty Smuin as chief executive officer. Greg Oslan, who had been interim chief executive officer for the past year, will continue on as an advisor to the company.
Smuin will be responsible for scaling Arturo and carving a new path both deeper into the insurance space and wider into adjacent markets.
“When I joined Arturo’s board, I did so with a passion for technology and a clear understanding of what Arturo has the capacity to offer: true clarity around the past, present and future of property,” said Smuin. “It is clear to me Arturo has the right technology, team and true market opportunity to do more than just grow; we can both truly transform the way we think about impactful property intelligence and revolutionize the future of insurance as a whole.”
Smuin was previously the COO and Co-CEO of Weave Communications, a publicly traded company focusing on small and medium businesses. His industry experience ranges from wireless telecommunications, storage management and application software, high performance computing, aerospace, digital media and ecommerce.
EMEA
bolttech acquires Digital Care
The acquisition serves bolttech’s objectives of accelerating growth in EMEA and becoming a global leader in embedded protection.
Global InsurTech firm bolttech (Singapore) announced that it has acquired embedded protection company Digital Care (Warsaw).
bolttech characterizes the acquisition as a major step towards achieving the Group’s strategic goals in the EMEA region and globally, while accelerating growth, particularly within the telecommunications industry. The companies declined to disclose the terms of the deal.
“Digital Care has a strong reputation for innovation and customer service, and their products and partner ecosystem are a perfect complement to bolttech’s,” a statement from bolttech says. “The deal will provide bolttech with an increased global footprint, expanded product offerings, and enhanced operational scale and distribution partner network in the embedded protection space. By bringing on board Digital Care, bolttech will enter four new markets in EMEA—Poland, Croatia, Lithuania and South Africa.”
Insurance Innovation Reporter