Research
Howden’s renewal report at 1.1.2024: A New World
The market is adjusting to a period of extraordinary cyclical and structural change
Stable reinsurance renewals observed at 1 January 2024 due to more favourable supply dynamics This yielded stable risk-adjusted rate movements at 1 January 2024: retrocession – flat, global direct and facultative – flat, global property-catastrophe – +3%, London Market casualty – flat%
New Cake & Arrow Report Explores the Impact of Climate Change on Homeownership and What the Insurance Can Do to Cultivate Climate Resilience Among Policyholders
Climate change has been on our collective radar for decades. But only in recent years has it come to be seen as an existential threat— not only to our planet and the people who live on it, but more specifically to the insurance industry, which exists to protect individuals from unexpected emergencies and damage to their property, homes, bodies, and more— all which are at greater risk due to climate change. How can the insurance industry meet the needs of the moment for its policyholders while still protecting its bottom line?
Today, Cake & Arrow, a UX Design and Product Innovation agency for the insurance industry, published a new report based on qualitative research conducted with homeowners from across the country who have been impacted by climate change. The report digs into how homeowners perceive risks related to climate change, what role they expect insurance to play in protecting them, and puts forward opportunities for insurance and principles for the industry at large regarding how to better support homeowners in this new climate reality and cultivate climate resilience.
"For too long the insurance industry has conceived of homeowners insurance as simply a matter of covering claims," explained Josh Levine, Cake & Arrow founder and CEO. "But in the new climate reality, in which climate-related disasters are no longer the exception but the norm, homeownership is changing. Homeowners are looking for a partner, not just to cover them in case something happens to their home, but to help them better mitigate the risks of climate change in the first place–long before a claim is filed. So much of the industry conversation right now is focused on risk mitigation for the insurance industry, not its customers, when in fact, the industry is missing an important opportunity to work with homeowners to make them 'better risks," which, if they can succeed, will be a win-win for the industry and its policyholders."
Revealed – world's largest insurance companies
UnitedHealth Group has retained its number-one slot in AM Best’s ranking of the world’s 25 largest insurance companies for the ninth straight year, according to the credit rating agency. UnitedHealth grew its net premiums written (NPW) by 14% in 2022 to US$257.2 billion.
Meanwhile, Allianz SE retained its top spot for non-banking assets at US$1.1 trillion, despite a 10% decrease from the previous year, AM Best reported.
The rankings of the world’s largest global insurance companies, by both NPW and nonbanking assets, were released in the January 2024 issue of Best’s Review.
According to AM Best, the top 10 insurers by NPW were dominated by health insurers, with US-based health companies accounting for four of the top five. Centene Health retained its number-two position, with NPW rising 13.2%. Elevance Health, at number three, also retained its position with NPW rising 13.5%. Kaiser Foundation Group of Health Plans rose to number four, while Ping An Insurance (Group) Company of China held steady at number five. The only insurer in the top 25 that saw its NPW fall was China Life Insurance (Group) Co., which slid from fourth to sixth place.
Commentary/Opinion
Best's Review - Florida Property: Homeowners Market and New Insurers
Sprouting from Chaos: Opportunity Brings New Insurers to Florida” provides a look at the five new carriers that have come to the Sunshine State in the wake of legislation aimed at driving down litigation and opening up the homeowners market.
Chris Draghi, AM Best's Monthly Insurance Magazine
LexisNexis: AV going mainstream still on ‘distant horizon’
UK Transport Minister Mark Harper has said self-driving cars could be on some British roadways by 2026, but a recent report from LexisNexis lays out why mainstream adoption of autonomous vehicles (AVs) is likely still “on the distant horizon.”
The report, based on patent activity by automakers and tech companies, notes strides have been made toward the potential impacts autonomous driving could have in reshaping urban mobility, reducing accidents, and revolutionizing transportation logistics, LexisNexis wrote.
Artificial intelligence (AI), vehicle connectivity, and smart infrastructure all play roles in autonomous driving, and progress in one field fuels advancements in others, according to the report.
“There has been some development in the field going back several years, however, this only started to take off just after 2015. We do not only see an increase in patents around Autonomous Driving, but we also see that the strength of these patents is developing even stronger…”
The top 25 patent owners in the field of autonomous driving is Baidu, followed by Alphabet. Both are leading tech giants from China and the U.S., respectively. Following are GM, Ford, and Toyota.
“While autonomous driving is currently led by the tech industry, the automotive players still have a significant hand in the technology development,” the report states. “[A] consistent pattern emerges: traditional automotive players exhibit a lower competitive impact, whereas tech giants like Alphabet demonstrate a higher competitive impact.
“This pattern isn’t unexpected; conventional auto companies focus on technology applicable in their vehicles today, whereas tech firms channel profits from their core markets into future investments.”
The research was split into three subcategories —
- Smart: Intelligence and Algorithms
- Security: Safety and Security
- Systems Experience: Interactive Experience
News
Worldwide insurance industry losses for 2023 should be below $133bn: BMS
Reflecting on the overall insurance industry losses for the year, BMS Group has revealed that worldwide insurance industry losses for 2023 should end up below the modeled average annual loss suggested by Verisk Annual Global Modeled Catastrophe Losses of $133 billion.
While there is still some loss development from recent severe weather events from around the world, such as the recent severe weather and flooding in Australia and Argentina and winter storms in the US, overall, BMS Group highlighted how it appears that the US insurance industry losses will end up below $65 billion across all perils.
The specialist insurance and reinsurance broker stated that this amount is just above normal at 108% above the 10-year average US loss, but only 94% above the five-year average annual US loss.
Importantly, US insurance losses usually tend to drive around 64% of the worldwide overall insurance industry losses experienced in any given year.
The company explained that it remains clear that across 2023, US severe weather was the “driver of losses,” which are just over double the 10-year average annual loss of $26 billion.
Global property cat reinsurance rates increase 3% at renewals
Global property catastrophe reinsurance rates rose 3% on a risk-adjusted basis at Jan. 1, 2024, reinsurance renewals while retrocessional markets registered flat, according to a report Tuesday from U.K.-based Howden Broking Group Ltd.
Renewals were described as “stable and orderly” as “Reinsurers’ plans were better telegraphed in the lead up to 1 January 2024, meaning the tensions and dislocations that characterized last year’s renewal were far less acute,” Howden said.
Concerns over the impact of so-called social inflation, or higher court awards and settlements, and its effects on reserve adequacy as well as rising loss costs in casualty markets were offset by “sufficient capacity to meet high demand,” leading to “stable renewals overall,” according to Howden.
In primary markets, global commercial insurance pricing across all lines rose by a weighted average of 9.6% during the first three quarters of 2023, compared with 12% for full-year 2022, with substantial divergence among lines.
Healthy property market drives a "more stable and predictable" renewal: Gallagher Re - Reinsurance News
According to Gallagher Re’s 1st View renewal report, the global reinsurance market returned to a “more stable and predictable” renewal at 1/1, driven by a healthier property reinsurance market.
This is in sharp contrast to 12 months ago when the market reportedly endured a “stressful and late” renewal due to a volatile property reinsurance market.
Gallagher Re CEO, Tom Wakefield, added, “Property supply and demand has snapped back into balance, with returns for the first three quarters of 2023 exceeding reinsurers’ increased cost of capital, underpinned by the exceptional structural changes achieved last year.
InsurTech/M&A/Finance💰/Collaboration
Dyad Launches to the Property & Casualty Insurance Market
Dyad, Inc. (formerly XDimensional Technologies and I-Engineering), a leading provider of insurance software and services backed by Serent Capital, has launched today. With the two companies coming together following XDimensional Technologies' acquisition of I-Engineering in June 2023, a new company brand, Dyad, is being launched today. These two experienced companies with proven track records are now one, brought together to better serve the evolving needs of retail agencies, wholesalers, agency networks, program administrators, MGAs, and carriers.
As Dyad, we are a global team of innovators focused on providing positive outcomes for our customers and the markets they serve. With a customer base of more than 400 organizations contributing to the evolution of our products, Dyad is poised for continued growth across all segments of the insurance industry. All software and services offered by both companies will remain under the Dyad brand.
"We are excited to be launching our new brand," said Lani Cathey, CEO of Dyad. "We brought two great companies together, which was just one of the reasons that Dyad was the perfect name. From agency management and policy administration systems to our distribution exchange and insurance outsourcing services, We are excited to be delivering a more robust portfolio of insurance solutions to the market."
Claims
Offset Rising Total Losses by Shortening and Simplifying the Process - Auto Total Loss eBook
VINsights provides critical data for the total loss process, including Titled Owner Name; Registered Owner Name; Lienholder; Mileage; Branded Title Status; State Taxes and Fees; and Lienholder Payoff Information.**
Settling total losses can be complicated, in part because of the wide variety of data required to settle these claims. With total loss frequency increasing and customer satisfaction levels decreasing, many carriers are struggling to reduce total loss cycle time.
The process for settling total loss claims requires answers to several questions: Who is the Titled Owner and the Registered Owner? Are there one or more lienholders? How much is owed on the lien? What state taxes and fees need to be considered in the final settlement? What if you could quickly get all the information you needed to settle a total loss claim, all in one place and all at one time?
2024 PREDICTIONS
In 2024, Change Becomes Non-Negotiable | Insurance Thought Leadership
Here are nine predictions for 2024, based on the certainty that few of yesterday’s approaches will be successful in tomorrow’s world.
We cannot imagine a riskier undertaking than predicting the future given the totally unforeseeable events of recent years, as well as the current state of the insurance industry and the world in general. On the other hand, there are some basic principles that help guide us through our annual predictions. In addition, we have hedged by widening our timeframe to not just 2024 but also to the near future.
Change Becomes a Constant
The one thing we can count on is that very few of yesterday’s approaches will be successful in tomorrow’s world. The only constant now is change. It has become non-negotiable. Technology, especially AI, will be a major driver.
ARTICLE CONTINUES HERE
Stephen Applebaum and Alan Demers as published by Insurance Thought Leadership in their Six Things weekly feature
[Ed. Note: Our Bad but better late than not at all] ....... Looking forward to 2024
Looking forward to 2024
No one knows what GenAI will bring beyond the foreseeable future, who will adopt Tesla beyond the die-hard Elon Musk fans.
‘When you look at car buying in general, we’re trying to get to the next set of EV adopters,’ Tesla’s Chief Financial Officer Vaibhav Taneja said during an investor call in October. And what will people charge to fix cars?
A minute before we ring in the new year, here’s what to look forward to – tomorrow (now)
Shefi Ben-Hutta, Editor at Coverager, December 31, 2023