Commentary/Opinion
Veterans Day. We Thank For Your Service
**Veterans Day, observed annually on November 11th, honors military veterans who have served in the United States Armed Forces
A Brief History of Veterans Day
Veterans Day, formerly known as Armistice Day, was originally set as a U.S. legal holiday to honor the end of World War I, which officially took place on November 11, 1918. In 1938, through an act of Congress, November 11th was made a legal holiday.
In 1954, at the urging of the veterans service organizations, the 83rd U.S. Congress amended the Act of 1938 by striking out the word "Armistice" and inserting the word "Veterans.” On June 1, 1954, November 11th became a day to honor American veterans of all wars.
In 1968, the Uniforms Holiday Bill was signed, ensuring three-day weekends for federal employees by celebrating four national holidays on Mondays: Washington's Birthday, Memorial Day, Veterans Day, and Columbus Day.
Many states did not agree with this decision and continued to celebrate the holiday on their original dates. With much confusion, the first Veterans Day under the new law was observed on October 25, 1971.
On September 20, 1975, President Gerald R. Ford signed a law which returned the annual observance of Veterans Day to its original date of November 11th, beginning in 1978. Since then, the Veterans Day holiday has been observed on November 11th.
[Ed. note: Recommended] Behind the Wheel: Navigating Hard Market Challenges in the Personal Auto Insurance Industry
Behind the Wheel: Navigating Hard Market Challenges in the Personal Auto Insurance Industry – how can insurers stay ahead of the curve?
It’s no secret that we’re in the midst of a uniquely challenging time for personal auto insurers due to a convergence of factors including risky driving and significant increases in the cost of auto repair/replacement, labor, and medical bills. The industry has reacted to those challenges with unusually steep premium increases. In the last year alone, the average auto premium cost increased by 17%. With the latest projections predicting profitability challenges to persist until at least 2025, it’s reasonable to expect this current hard market to continue through at least the same time period.
Some downstream impacts have already been articulated, including increased policy shopping and lower customer satisfaction scores. Others are starting to creep in under the radar, yet all have the potential to compound current challenges to insurers, as well as create opportunities. It’s the less immediately obvious downstream impacts that are the focus of this feature, both for purposes of raising awareness and preparing insurers to take proactive measures.
Confucius once said, “Plan ahead or find trouble on the doorstep.”
Erik Bahnsen, Industry Analysis, CCC Intelligent Solutions
AI Deep Learning: Revolutionizing Damage Detection
Deep learning, a subset of artificial intelligence (AI), is predicated on the concept of emulating the layered structure and function of the human brain to interpret various forms of data.
This approach allows machines to identify intricate patterns within images, text, sound, and more, facilitating nuanced insights and reliable predictions.
Deep Learning is, more specifically, a specialized subset of machine learning that distinguishes itself primarily through the structure and complexity of its models. Traditional machine learning relies on handcrafted features extracted from data by experts to train algorithms like decision trees or linear regression models. These features are predefined, requiring significant domain expertise and manual intervention to determine the most relevant data points that will lead to accurate predictions or classifications.
Debbie Winterton, Marketing Manager, Loveland Innovations
Research
EV repair claims rise as costs remain higher than ICE vehicles
Mitchell International projects that the gap will eventually narrow, but is unlikely to close completely. Mitchell’s data also refutes claims that EVs are written off as total losses more often than ICE vehicles.
Electric vehicle collision repair costs continue to outpace expenditures to repair vehicles with internal combustion engines (ICE), according to Mitchell International, which reported the cost difference is $950 in the U.S. and $1,301 in Canada.
During the third quarter, EV repairable claims frequency was up 1.86% in the U.S., a 0.37% increase from the prior quarter.
The repair-cost gap between EVs and ICE will eventually narrow as the aftermarket and recycled parts sectors grow for EVs and automakers work to make the collision repair process easier to perform, according to Ryan Mandell, director of claims performance at Mitchell.
“Manufacturers understand the relationship between a positive collision repair experience and their overall brand experience. Right now some of the repair procedures are very prohibitive, but I think that will change over time,” Mandell tells PropertyCasualty360.com.
News
Scientists Say 2023 Set to Be Warmest in 125,000 Years
This year is set to be the world’s warmest in 125,000 years, European Union scientists said on Wednesday, after data showed last month was the hottest October on record by a massive margin.
Last month exceeded the previous highest October average temperature, from 2019, by 0.4 degrees Celsius, the EU’s Copernicus Climate Change Service (C3S) Deputy Director Samantha Burgess said, describing the temperature anomaly as “very extreme.”
That has made 2023 as a whole “virtually certain” to be the warmest year recorded, C3S said in a statement.
Liberty Mutual reveals results for Q3 2023
Group reports net loss for first nine months of the year
Liberty Mutual has reported its results for Q3 2023, revealing net income of US$219 million for the quarter and a net loss of US$441 million for the first nine months of the year.
"Solid underwriting results in our Global Risk Solutions business and the tailwind from rising net investment income helped offset continued pressure from inflation and severe weather impacting US personal lines,” said Liberty Mutual president and CEO Tim Sweeney
“Despite these challenges, the underlying combined ratio in US Retail Markets improved 2.4 points and we continue to take aggressive rate and non-rate actions to return that business to target profitability.
“Global Risk Solutions continues to make progress toward its targets, with an improvement in the underlying combined ratio of 2.2 points compared to the prior year quarter.”
InsurTech/M&A/Finance💰/Collaboration
MassMutual to shut down Haven Life by the end of the year
Haven Life has been known for providing Americans with straightforward and cost-effective insurance options.
Haven Life was a direct-to-consumer agency established in 2014, offering term life insurance products online, often without the need for a medical exam. Mitch Ocampo has led the company as CEO since January 2022. Policies sold through Haven Life have always been MassMutual products and will continue to be administered and serviced by MassMutual.
In June, Haven Technologies, a SaaS provider for insurance also owned by MassMutual, executed layoffs affecting roughly 70% of its staff, which totaled about 280 employees. This change does not involve or impact Haven Technologies .
We reached out to MassMutual and received the following statement:
“MassMutual will continue to focus our strategy on meeting people where they are with the financial solutions they need, including providing access to our products both directly and through our network of affiliated financial professionals and strategic partners. As part of our continuous effort to most efficiently and effectively meet the needs of our customers, over time we will shift direct access to MassMutual life insurance products from Haven Life to our own website, MassMutual.com.
Consequently, MassMutual will wind down Haven Life over the coming months. This will allow us to prioritize and focus our efforts and resources on initiatives that deliver on our strategy and provide the most value to our policyowners.”
Farmers Group, Inc. to acquire three brokerage entities and the flood program servicing arm from the Farmers Exchanges
Farmers Group, Inc. (FGI), a wholly-owned subsidiary of Zurich, has agreed to acquire three brokerage entities, as well as the flood program servicing arm of the Farmers Exchanges, for USD 760 million.
Ownership of the brokerages will ensure FGI maintains and broadens its position in supporting the Exchanges in meeting customers’ needs while generating an additional capital-light stream of earnings for FGI.
The brokerages (Kraft Lake Insurance Agency, Western Star Insurance Services and Farmers General Insurance Agency) will enable the Farmers Exchanges to create a more attractive customer proposition with a broader and more compelling range of products and services which are expected to improve customer retention and new customer acquisition. The brokerages offer alternative insurance options for the more than 7 million Farmers Exchanges quotes that are currently not taken up by customers.
Waller Helms Advisors acted as the exclusive financial advisor to the Farmers Exchanges in connection with this transaction.
Seamlessly Integrating Insurance into Vehicle Purchase Process
Rivian, Nationwide partnership reimagining the insurance/customer relationship
Traditionally electric vehicles (EVs) were seen as more of a novelty than a reliable means of transportation in the US.
But as the technology has improved, so to have attitudes. According to the International Energy Agency, in 2022 14% of global new car sales were EVs, a figure expected to reach 60% by 2030. In the U.S. alone, 750,000 EVs were sold in 2022 a figure expected to jump to 1 million in 2023.
This seismic shift in where people are choosing to spend their money is leading to new opportunities for both car manufacturers and insurance carriers.
“All major automakers are thinking about insurance in one way or another,” said Angie Klett, senior vice president of Nationwide Corporate Development. “It’s a very active space as people try to find the right fit for their customers. To make it work, you need to meet customers where they are, give them the best experience possible, and continue to meet their changing needs.”
The partnership between Nationwide and Rivian is proving to showcase a road map to success.
'It's a bit our personality' – Hippo Insurance CEO on nationwide pause and next steps
Further corrective action and layoffs on horizon for wider industry, CEO predicts
In August, Hippo Insurance took what has been seen by some as a radical step and pushed pause on writing new business nationwide across its homeowners’ portfolio, in a move that has been described as “bold” by its CEO as the insurtech looks to gradually get back to business.
“It’s a bit our personality – when we see something that we need to do, we take bold, decisive steps to do it,” Rick McCathron, Hippo Insurance CEO, told Insurance Business. “There are some people that think ‘wow, that was aggressive but prudent’, there are other people that had concerns around ‘are you overreacting, are you taking a knee jerk reaction to something?’
“Our view is, we knew we had to improve the portfolio, so instead of taking a year to do it, let’s do it now.”
The CEO looked to hail losses in the second quarter as a “hiccup” that pushed the insurtech to reduce volatility in its book.
ClaimDeck and Snapsheet Unite to Transform Insurance Claims and Litigation Management
ClaimDeck, a leading insurance technology provider, is thrilled to announce a strategic partnership with Snapsheet, an industry-leader in claims management technology and virtual appraisals, empowering claims organizations to offer seamless customer experiences.
This collaboration marks a significant milestone in transforming the insurance industry by combining ClaimDeck's advanced litigation management platform with Snapsheet's unparalleled claims management expertise, technology, and solutions.
People
Genpact Announces CEO Succession Plan
Tiger Tyagarajan to retire, BK Kalra to assume CEO role
Genpact (NYSE: G), a global professional services firm focused on delivering outcomes that transform businesses, today announced a leadership succession plan. "Tiger" Tyagarajan, President and Chief Executive Officer, has informed the Board of Directors of his intention to retire from the company, effective February 9, 2024.
The company's Board has appointed Balkrishan "BK" Kalra, Genpact's Global Business Leader, Financial Services and Consumer & Healthcare, as Genpact's next CEO. Kalra will join the company's Board on February 9, 2024, and Tyagarajan will continue as a member of the Board of Directors.
Kalra is a transformative business leader, with more than 30 years of experience helping companies grow from early stage to large, globally competitive enterprises. He joined Genpact in 1999 and has served in a variety of increasing leadership roles across the company. He leads Genpact's global transformation efforts across the banking, capital markets, consumer goods, retail, life sciences and healthcare industries, helping companies better leverage technology and AI-enabled solutions.
"We are delighted to announce BK as Genpact's next CEO, a leader with a proven track record of delivering business results and fostering deep client relationships," said James Madden, Chairman of Genpact's Board of Directors. "In planning for Tiger's retirement, the Board undertook a robust process, assessing a number of internal and external candidates. In the end, BK stood out as the natural successor. He understands the importance of investing in emerging trends and technologies with a particular focus on Genpact's efforts around advanced analytics and AI-enabled solutions. BK's strategic vision and deep understanding of our clients and business is exactly what Genpact needs as we enter this new chapter."