Research
14 Percent of U.S. Drivers Were Uninsured in 2022, IRC Estimates
About one in seven U.S. drivers (14.0 percent) operated a private-passenger vehicle without liability insurance in 2022, according to an estimate contained in a new report released today by the Insurance Research Council (IRC).
“The pandemic appears to have caused a jump in the percentage of drivers choosing to forgo required insurance, adding to the insurance costs for everyone else,” said Dale Porfilio, president, #IRC.
The District of Columbia (25.2 percent), New Mexico (24.9 percent), and Mississippi (22.2 percent) were the jurisdictions with the highest percentage of uninsured motorists in 2022, the report stated. Wyoming (5.9 percent), Maine (6.2 percent), and Idaho (6.2 percent) were the three states with the lowest percentage of uninsured motorists last year, the IRC report said.
The percentage of uninsured motorists stood at 11.1 percent in 2019 before increasing to 13.9 percent in 2020 and 14.2 percent in 2021, before slightly declining to 14.0 percent in 2022, the IRC estimated. Personal income declines and high inflation, coupled with Americans driving fewer miles, prompted some motorists to suspend the purchase of mandatory auto insurance liability coverage during the first two years of the pandemic, according to the report.
Liability insurance covers what a policyholder is legally obligated to pay as the at-fault driver in an accident resulting in either bodily injury (BI) or property damage (PD). Uninsured motorist (UM) coverage is the portion of an auto insurance policy that protects financially an insured driver from expenses (e.g., medical bills, lost wages) caused by either an at-fault uninsured or hit and run driver.
The just-published IRC report, Uninsured Motorists: 2017–2022, is based on UM and BI liability exposure and claim count data collected from 10 major insurers representing approximately 56 percent of the U.S. private passenger auto insurance market. The ratio of UM-to-BI claim frequencies yields a reasonable estimate of the proportion of injury-producing accidents caused by uninsured or hit-and-run motorists. That ratio provides the basis of the IRC’s report.
P&C sector facing significant headwinds
The property-casualty insurance sector continued to battle significant headwinds during the first half of the year, according to a new report on the sector’s financial results from the American Property Casualty Insurance Association (APCIA).
“While the aggregate industry balance sheet is strong enough to meet its contractual commitments and obligations to consumers and businesses, the ever-increasing challenges from claims cost and expense increases, extreme weather events, legal system abuse, and ongoing regulatory resistance to rate adequacy in a few jurisdictions continue to have significant negative financial consequences for insurers,” said Robert Gordon, senior vice president for policy, research and international at APCIA.
Among the report’s key findings were:
- Rising underwriting losses caused P&C insurers’ Q2 after-tax net income to sink to just $0.4 billion, the lowest level since 2011. Net income for the first half of 2023 was $8.9 billion, representing a pre-tax return on revenue of 2.3% and after-tax return on statutory surplus of just 1.8% (annualized)
- The industry’s statutory capital and surplus grew 8.1% in H1, driven by a $63.7 billion increase in unrealized capital gains – mainly unsold equity investments. This revered a $101.8 billion net decrease in unrealized gains in H1 2022. Despite the surplus growth, the June 30 aggregate value of $1.04 trillion is still below the $1.05 trillion peak set at the end of 2021
- The H1 combined ratio of 104.3% was 4.4 points higher than last year’s combined ratio of 99.9%. The associated underwriting loss through June 30 was $24.1 billion, up from a $6.5 billion loss a year prior
- APCIA estimated catastrophe losses of $30.7 billion for Q2 and $38.4 billion for the first half. These estimates do not include early Q3 losses from the Maui wildfire and Hurricane Idalia, estimated at a combined $12 billion
- H1 catastrophe losses were driven partly by a series of severe convective storms and a Northeast winter storm. First-half catastrophe losses were 18.2% higher than those in 2022. Catastrophe losses accounted for 10.2 percentage points in the combined ratio for all lines, APCIA reported. However, the impact of catastrophes on homeowners’ insurance and commercial property lines was much greater
InsurTech/M&A/Finance💰/Collaboration
Allstate's Arity partners with CSAA on mobility data
CSAA Insurance Group will use the Arity IQ Network, which uses driving behavior data to quote auto insurance policies.
Arity, a mobility data and analytics company founded by Allstate, announced its partnering with CSAA Insurance Group so the insurer can deploy its Arity IQ Network, which uses driving behavior data to quote personal auto insurance policies.
"At CSAA Insurance Group, we aim to make insurance simple, proactive and personal," said Rick Lanter, senior vice president for product strategy and development at CSAA, in a statement. "This collaboration represents another step forward in pursuing driving solutions that empower our members who exhibit safe driving behavior."
Arity also launched a usage-based insurance program, Drive'n Save with Texas Farm Bureau Insurance in March.
Nuvalaw lands $3m funding to revolutionise P&C insurance claims resolution
The funding was prominently led by London’s Semantic Capital, a private investment holding entity that places its bets on innovative, software-driven solutions with unique intellectual properties. The financing consisted of a mix of equity and debt.
Nuvalaw, in conjunction with its UK joint venture partner Trust Arbitration, has managed to secure a commendable clientele, comprising eight significant insurers and seven major law firms. Their joint accolades include winning the Insurance Times Claims Partner Of The Year Award, Claims Achievement Award at the Claims Excellence Awards, and the Legal Claims Partner Of The Year at the Insurance Times Awards.
This newly acquired funding will be channeled to further enhance Nuvalaw’s already flourishing presence in the UK market. The aim is to expand their cloud-based claims resolution platform, integrating AI technology to tackle a broader spectrum of legal issues. The move into the US market by Nuvalaw has been highly anticipated, especially given the country’s notorious litigation and claims resolution expenditures.
At present, the average waiting duration for personal injury claims in the UK can extend up to 546 days, leading to claimant dissatisfaction, increased operational expenses for insurers, and liquidity issues for claimant lawyers. Nuvalaw’s innovative platform efficiently streamlines and organises all documentation and interactions online. This has resulted in compressing the lengthy resolution process of intricate insurance claims from over a year to just a few days, generating savings of almost 80% in parallel costs.
Coterie Insurance Partners with Five Sigma to Create Differentiating Long-Term Value for its Small Business Customers - Five Sigma
Coterie Insurance, the partnership-focused insurtech MGA simplifying small business insurance, announced a new partnership with Five Sigma, a claims management platform designed to revolutionize claims handling. The two companies are committed to delivering innovation to simplify the insurance process across the value chain.
“We’re thrilled to partner with Five Sigma to help supercharge our claims operations and enhance our commitment to a thoroughly digital and user-first claims experience,” said Morgan Smith, COO at Coterie Insurance. “This partnership will give us the ability to streamline processes, stay organized, improve accuracy, increase efficiency, reduce claim cycle time, and increase customer satisfaction.”
Coterie will use Five Sigma as a digital alliance hub, connecting policyholders, compliance, service providers, and an insurance and partner ecosystem. Historical and online data will provide claims intelligence, assisting Coterie with performance, workflows, and smarter decisions for three lines of business, including Professional Liability, General Liability, and Business Owners’ Policies.
“We are excited to partner with Coterie to provide a solution that helps them accelerate their strategic objectives and ambitious growth plans,” said Oded Barak, CEO and co-founder of Five Sigma.
Commentary/Opinion
Travelers CEO Calls for End to 'Cancel Culture'. Ending Polarization and Building Future Leaders
Challenges facing today’s business leaders include keeping pace with rapid change, the leader of Travelers said last week while also going out of his way to cast light on a serious obstacle to forward progress: polarization.
“I think it’s a big problem,” said Alan Schnitzer, chairman and chief executive officer of Travelers, as he spoke during the 100th episode of the carrier’s webinar series, “Wednesdays with Woodward,” hosted by Joan Woodward, president of Travelers Institute, the public policy division and educational arm of Travelers.
“There are lots of challenges we face as a country—education policy, healthcare policy, immigration policy. Wherever you stand on those issues,…whether it’s in Washington or state capitals among our public policy makers, or whether it’s among ordinary citizens, I don’t think gridlock serves us,” Schnitzer said. “As a leader, I try to be very outspoken about rejecting cancel culture. I think cancel culture and the inability to engage and share ideas is problematic.”
Instead, he encourages the opposite. “I try to promote pluralism. This idea that competing ideas can coexist—that we can agree to disagree but respect people’s rights to have different points of view,” he said. “Through that, you get together and hopefully in the spirit of constructive engagement, you try to solve problems.”
Innovation
AAPEX 2023 Keynote: Right to Repair takes center stage
AAPEX KEYNOTE: RIGHT TO REPAIR TAKES CENTER STAGE
AAPEX is in full swing. Bill Hanvey, president and CEO of Auto Care Association, and Paul McCarthy, president and CEO of MEMA Aftermarket Suppliers, took to the stage to announce a sold out show floor, an 86% increase in total exhibiting companies and an attendee crowd that includes more than 40,000 targeted buyers.
“Make no mistake, we are now a technology industry and together we envision a new era where the power of change drives us forward,” McCarthy said. “Where we elevate our value to the motoring public and where we create a bright future.”
On the forefront of that future is Right to Repair. It is one of the most critical challenges facing the automotive aftermarket, and it is vital to ensuring a prosperous future for the aftermarket. Hanvey and McCarthy called out the three pillars of repairability–data access, repair information access and parts access. They are essential to guaranteeing choice and affordability for consumers and the 4.7 million employees within the aftermarket. McCarthy warns that without the Repair Act, the independent aftermarket share could drop significantly by 2035, which would be detrimental to the industry and consumers.
“That would redirect $92 billion out of this room by 2035,” Hanvey said.
LexisNexis Risk Solutions and IMS Collaborate to Offer IMS customers Consistent Driving Scoring at Point of Quote and for Ongoing Driver Monitoring
This strategic agreement enables IMS’ insurer customers to use a single score regardless of the data coming from their own app program or exchange solutions
LexisNexis® Risk Solutions, a leading provider of data and analytics for the insurance and automotive industries and IMS (Insurance & Mobility Solutions), a leading global vehicle and driving data business, today announced they have entered into an agreement for IMS to leverage the LexisNexis® Drive Metrics scoring model. Whether data is from the IMS DriveSync® platform or from LexisNexis® Telematics OnDemand, insurers using both solutions can leverage the benefit of a single, consistent driving score to benefit consumers.
Insurers can now leverage the Drive Metrics scoring model from the IMS One App product suite in addition to the existing LexisNexis Risk Solutions point-of-quote channel, LexisNexis® Telematics OnDemand. This approach offers a consistent scoring process for a broad range of insurers looking to continue to improve their usage-based insurance offerings through advancement of their own app-based programs, as well as integration of external exchange-based solutions to meet the needs and desires of consumers.
The Drive Metrics scoring model is compatible with carrier-specific rating plans and delivers a 79% additional lift above standard rating factors, with the potential to increase future performance of the model even further as additional driving behavior attributes are included. The separation power of this scoring model is also very high with an 8.7x lift between top and bottom deciles in terms of claim frequency and it performs strongly across coverage types to offer differentiated claim relativities and discounts, as appropriate.
“This agreement makes it possible for our current and future customers to minimize the headaches of managing the scoring of their app-based telematics data separate from their use of LexisNexis Telematics OnDemand,” said David Lukens, SVP North America at IMS. “IMS enables more than 350 insurance and mobility customers globally with usage-based programs. The company’s award-winning One App mobile telematics and IMS DriveSync platform provide ongoing driver behavior modification, distracted driver monitoring, tailored rewards and retention programs, along with crash detection and automated claims processes.”
Attendees of ITC Vegas taking place from October 31 to November 2, 2023, can learn more by attending an informative joint panel featuring IMS, LexisNexis Risk Solutions and electric vehicle manufacturer Rivian on November 1, 2023, at 10:30am, “Using emerging driving data analytics to price policyholders for maximum profitability.” Interested auto insurers can also contact IMS directly for more information at https://ims.tech/contact.
Shift Technology Strengthens Insurance Decisioning Solutions via Generative AI Capabilities
Shift Technology, a provider of AI-powered decision optimization solutions for the global insurance industry, today announced the integration of generative artificial intelligence (AI) functionality across its suite of products. These new capabilities deliver targeted, accurate insights and context to the risk detection and investigation processes, resulting in significant improvements in decision-making speed and accuracy across underwriting and claims. Users of Shift Claims Fraud Detection, Shift Subrogation Detection, Shift Improper Payment Detection, and Shift Underwriting Risk Detection can take immediate advantage of the added benefits provided by generative AI in identifying suspicious behavior across the policy and claims lifecycle as well as uncovering subrogation/recovery opportunities.
Generative AI models analyze patterns in large data sets to generate new content, including text, images and other types of media. Large language models (LLMs) are a type of generative AI used to understand and produce text-based content. Shift's LLMs are further trained by Shift's proprietary "insurance knowledge layer," derived from data and context specific to the insurance industry as well as information unique to individual insurers. Incorporating generative AI into existing solutions allows insurers to harness its benefits without requiring significant investments in new projects.
Shift has been using LLMs in its products since 2020, and has been advancing its generative AI work with leading insurers since early 2023. These capabilities are delivered via the company's Generative AI Service Architecture that serves as a robust, service-based document processing pipe which increases document processing accuracy, speed and consistency. Shift's generative AI capabilities are developed in partnership with and supported by Microsoft Azure OpenAI Service for Insurance, which helps to ensure enterprise-grade scalability, security, and reliability required by insurers.
Availability
Generative AI capabilities are available now as an opt-in capability for customers of Shift's fraud, risk and subrogation detection solutions. Generative AI integration into additional Shift products is planned for early 2024. Arnaud Grapinet, chief data scientist, Shift Technology, will be conducting a live demonstration of the company's generative AI capabilities at ITC Vegas 2023 on November 1, 2023 at 10:50 a.m. local time on the expo floor demo stage.
Arturo Launches Claims Module, Cutting Hours of Manual Work Per Claim
The new module gives deep insight into near-real time damage assessments and potential financial impact from a single view.
Arturo, the property intelligence company that delivers portfolio-wide underwriting, risk and claims insights, today announced the launch of its new claims module. The AI-powered module helps carriers strategize on claims prioritization, proactively reach out to customers, evaluate damage from natural disasters and understand the potential financial impact across their entire book — all of which eliminates traditionally time-intensive, manual work.
“These technological silos inhibit even the most seasoned claims professionals from understanding the risk and potential financial impact of active claims across their book. These inefficiencies underscore the need for integration, as they ultimately affect the policyholders who simply want transparency and a speedy resolution.”
“The claims process is notoriously tedious and time-consuming, often requiring hours of manual cross-referencing across multiple spreadsheets,” said Marty Smuin, CEO at Arturo. “These technological silos inhibit even the most seasoned claims professionals from understanding the risk and potential financial impact of active claims across their book. These inefficiencies underscore the need for integration, as they ultimately affect the policyholders who simply want transparency and a speedy resolution.”
Arturo’s claims module provides a comprehensive understanding of the material impact of claims events on a portfolio. By synthesizing property intelligence in an intuitive user interface, Arturo enables carriers to analyze claims data at a glance, so they can make more informed decisions about their claims response and provide support where it’s needed most. The customizable display options allow users to view claims data by date range, claim type and financial impact. In addition, color-coded map markers help customers quickly identify high-impact claims, so they can prioritize their attention accordingly. The tool also facilitates real-time third-party data integration, enabling near-real time damage assessments from floods and wildfires.
Come see the platform in action, visit the team at booth #2530 at InsureTech Connect in Las Vegas from October 31 to November 2, 2023.
CLARA Analytics Launches Industry’s First Holistic Casualty Claims Intelligence Platform, CLARAty.ai, to Reshape Claims Management
CLARA's leading claim platform raises new venture capital in a series-c round to expand generative AI capabilities.
Intelligence Layer Augments the Core Tech Stack to Transform Claims Management From Diary-Based to Real-Time Proactive Management Across Key Risk Dimensions
Company to Demo Select Platform Capabilities at ITC Vegas
CLARA Analytics (“CLARA”), a leading provider of artificial intelligence (AI) technology for insurance claims optimization, today unveiled its CLARAty.ai platform, which advances the insurance claims process and assists claims professionals with their day-to-day work. Applying a holistic approach to claims, CLARA’s new platform empowers users with insights from across their traditional core systems to provide the information they need, when they need it, to resolve claims with unprecedented operational efficiency and for lower costs. The first-of-its-kind CLARAty.ai platform debuts on the heels of CLARA’s recent Series C funding announcement, as the company continues to innovate and expand to meet customers’ needs.
CLARA will showcase select CLARAty.ai elements at ITC Vegas 2023 through Nov. 2.
Loveland Innovations Introduces Comprehensive Property Inspection Suite with Launch of IMGING Inspect™
Loveland Innovations Introduces Comprehensive Property Inspection Suite with Launch of IMGING Inspect™
Today, Loveland Innovations – the leader in property inspections and analytics – announced IMGING Inspect™, a new property inspection tool built specifically to the needs of claims adjusters and contractors to more quickly inspect and scope property damage. Inspect is an iOS application that powers swifter inspections and scoping while fitting seamlessly into current insurance and contracting workflows.
“IMGING Flight, our AI-powered drone inspection solution, has already transformed roof inspections for insurance carriers and contractors,” says Jim Loveland, Founder/CEO of Loveland Innovations. “IMGING Inspect brings the same AI-powered brilliance to ground-level property inspections via an easy-to-use mobile app. This is just the beginning of our full inspection platform that will culminate in an unparalleled suite of property inspection solutions.”
For an in-person product demo or to learn more, visit us at Booth #3362 at Insuretech Connect 2023 in Las Vegas October 31 – November 2, 2023.