P&C Carrier Layoffs Are Gaining Momentum  October 27th 2023

Liberty Mutual slashes around 850 jobs as part of 'transformation initiative'

Liberty Mutual is set to cut around 850 jobs, or about 2% of its US workforce this month, making it the latest insurer to announce layoffs in recent weeks.

In a statement issued to Insurance Business, a Liberty Mutual spokesperson confirmed that the move was made “as part of a company transformation initiative.”

“We have made the difficult decision to eliminate approximately 850 positions, nearly all in the US, across several functions this month, many of which are effective by the end of the year,” the spokesperson said.

“Impacted employees will be eligible for severance and outplacement assistance and are encouraged to apply for other positions within the organization.”

Employees in Liberty Mutual’s US retail markets and global risk solutions business units, as well as technology and other corporate groups, will be impacted, according to the spokesperson.

Hippo lays off approximately 20% of staff

Roughly a week before the anticipated release of its Q3 2023 results, Hippo initiated layoffs affecting approximately 120 employees

This is equivalent to about 20% of Hippo’s workforce as mentioned earlier. As of December 31, 2022, Hippo had 590 employees.

This development follows Hippo’s decision to suspend all new nationwide business, effective August 2023.

In its most recent earnings report, Hippo disclosed that it held $565 million in cash and other investments at the close of Q2 2023, reflecting a decrease from $620 million at the end of the preceding quarter.

Founded in 2015, Hippo primarily operates as a personal property insurer and has raised over $1.2 billion since its inception. Its current market cap stands at $173.70 million, and the stock is currently trading at $7.34. Hippo is also the parent company of P&C insurer Spinnaker and insurance marketplace First Connect.

Pekin Insurance announce they are cutting some full-time positions

Pekin Insurance restructuring in ‘unprecedented time’ - announced Wednesday that they eliminated a small percentage of its full-time positions on Tuesday.

According to a Pekin Insurance news release, the job cuts are part of its accelerated strategic plan to focus more on profitable commercial lines business.

All the employees who lost their jobs were offered a severance package.

Dan Connell, the Chief Executive Officer of Pekin Insurance, said these decisions are always tough to make.

“Unfortunately, today’s business climate is forcing us to take immediate action to ensure our future financial success and steadfast commitment to our policyholders,” Connell said. “Our remaining team will be focused on serving all our customers with excellence and precision.”

Acapulco Losses Seen at $15 Billion as Hurricane Otis Death Toll Rises

Hurricane Otis left a trail of destruction in Acapulco after tearing into the historic Mexican beach town with wind speeds of 165 miles (266 kilometers) per hour, smashing shops and wrecking apartment buildings and hotels.

State authorities have reported 27 deaths and four missing persons so far, Security Minister Rosa Icela Rodriguez said in a press conference Thursday.

2023’s Severe Weather Events Are Proving Costly to U.S. Insurers

The U.S. is experiencing its costliest year ever in 2023 for severe convective storms, with insured losses from these events exceeding $50 billion through the end of September, according to the Insurance Information Institute (Triple-I.)

Severe convective storms include natural catastrophes such as thunderstorms with lightning, hail, tornadoes, and derechos, which are organized lines of thunderstorms with widespread damaging winds. Tornadoes in Arkansas, Illinois, and Mississippi caused a significant loss of life and property damage in 2023’s first-half. They were followed by this summer’s intense hailstorms in Colorado and Minnesota, among other states.

U.S. auto, home, and business insurers cover insured properties impacted by wind, hail, and lightning-caused fires. Flood-caused damage to private-passenger vehicles is covered under the optional comprehensive portion of a personal auto insurance policy.

“A $50 billion loss for a single peril is a big deal,” said Steve Bowen, chief science officer, Gallagher Re, who collaborated with Triple-I on its just-released Issues Brief, Severe Convective Storms: State of the Risk.

“In fact, the U.S. has had six years since 2010 where all annual catastrophe losses combined did not reach this threshold.”

The higher dollar amount of the insured losses can be attributed in part to these events striking densely populated U.S. communities, the site of homes and commercial buildings which are costly to repair and replace, a Swiss Re study cited by Triple-I found. The 2023 weather and climate disasters causing at least $1 billion in damage, both insured and uninsured, are chronicled by the federal government and featured in a chart which is incorporated into Triple-I’s latest Issues Brief.

Neptune Flood Crosses $200 Million of Premium in Force, Becomes Primary Alternative to NFIP

Neptune Flood, the largest private provider of flood insurance in the United States, has crossed $200 million of premium in force and adds seven members to its newly formed advisory board, it was announced today by Trevor Burgess, CEO of Neptune Flood.

Crossing $200 million of premium in force brings Neptune to over 5% of the National Flood Insurance Program's size, securing its role as the primary alternative to the NFIP.

"Growing in scale highlighted the need for sage advice from a group of leading experts in the insurance industry. My executive team is incredibly thankful that this group of seven leaders has agreed to help us in our journey to be the best possible flood insurance company for consumers, agents, and our risk-taking partners," said Trevor Burgess, Neptune's CEO.

Erie Indemnity Reports Third Quarter 2023 Results

Erie Indemnity Company (NASDAQ: ERIE) today announced financial results for the quarter and nine months ending September 30, 2023. Net income was $131.0 million, or $2.51 per diluted share, in the third quarter of 2023, compared to $84.3 million, or $1.61 per diluted share, in the third quarter of 2022. Net income was $335.1 million, or $6.41 per diluted share, in the first nine months of 2023, compared to $233.1 million, or $4.46 per diluted share, in the first nine months of 2022.

Operating income before taxes increased $42.0 million, or 39.4 percent, in the third quarter of 2023 compared to the third quarter of 2022.

Management fee revenue - policy issuance and renewal services increased $97.4 million, or 17.7 percent, in the third quarter of 2023 compared to the third quarter of 2022.

Management fee revenue - administrative services increased $1.5 million, or 10.2 percent, in the third quarter of 2023 compared to the third quarter of 2022. Cost of operations - policy issuance and renewal services

American Family Insurance Confirms Reports of Cyber Attack, Raising Consumers’ Concerns Over a Possible Data Breach

Last week, American Family Insurance (“American Family”) confirmed that the recent IT issues the company has been dealing with were due to a cyberattack.

Given the recency of the incident, American Family is still in the process of investigating the incident. However, if American Family determines that any consumer information was compromised as a result of the cyberattack, it will be required to send data breach notification letters to all individuals whose information was affected.