News
Positive growth and resilience in Q3'23 domestic P&C insurance industry KBW
In the third quarter of 2023, the domestic Property and Casualty (P&C) insurance industry demonstrated robust growth, with direct written premiums expanding by 9.8%, according to a KBW report.
his growth surpassed the pace of the previous quarter (9.2%) and the first quarter (8.4%), reflecting persistent rate increases in personal and commercial lines.
The positive trajectory was observed across most lines, with a notable moderation in professional liability rate decreases, the report noted.
The industry’s significant year-over-year direct loss ratio improvement in major personal lines showcased a growing gap between earned rate increases and moderating loss trends.
Progressive Files for 19.78% Auto Insurance Rate Increase in West Virginia
Less than a month after Farmers Direct Insurance filed for a hefty rate increase on West Virginia auto liability policies, Progressive has followed suit with an almost identical request.
The West Virginia insurance commissioner posted a bulletin Tuesday, noting that Progressive Classic Insurance Co. is asking for a 19.78% average increase in rates, affecting more than 31,500 motorists. In December, Farmers Direct Property and Casualty Insurance Co. requested a 19.9% average increase.
The filings are the latest indication that auto and other property insurance costs and premiums are on the rise around the country. MarketScout reported this week that auto insurance rates climbed by 7.3%, nationally, for the fourth quarter of 2023, just slightly behind property rates. Over the last decade, car insurance has risen by 19% nationwide, according to the U.S. Bureau of Labor Statistics.
Insurers have said that inflation, car thefts and a rise in accidents, claims severity and fraud have contributed to the need for higher premiums. The average cost per private passenger auto claim in the U.S. increased 16% in 2022 year over year, after rising by 11% in 2021, AM Best has reported. The average defense and cost containment expense increased by 29% and adjusting and other expenses increased by 18%.
Commentary/Opinion
What’s Causing the Insurance Talent Shortage (and How Can Carriers Cope)?
It’s become increasingly difficult to ignore: the insurance industry is facing a major talent shortage that is only just beginning. A confluence of factors has ushered us into this gap in the insurance workforce, including the Great Resignation — a trend in which nearly 57 million Americans quit their jobs in search of more fulfilling work and a better work-life balance – and minimal interest reported among younger generations in more traditional industries, like insurance (a recent PwC report found that 21% of millennials would rather not work in the financial services sector).
Not to mention what’s on the horizon: a wave of mass retirement is threatening to crash on the industry within the next few years, in which the U.S. Bureau of Labor Statistics projects nearly 400,000 employees will retire from the insurance and insurtech spaces.
Altogether, it seems likely that today’s insurance talent shortage isn’t going away any time soon. If anything, carriers may be feeling increased pressure from reduced staffing in the coming years, in a few critical ways.
South Florida lawsuits blamed for high property insurance costs
Fla. study finds litigated claims 6 times more expensive
A Florida Office of Insurance Regulation analysis of 58,395 litigated claims from 2022 found that the cost of such claims was six times that of other claims. Broward, Miami-Dade and Palm Beach counties accounted for 27.5% of closed claims that were litigated in Florida in 2022, according to the report.
South Florida homeowners sued their insurance companies at a greater rate than anywhere else in Florida — and that might have led to higher insurance premiums.
A new study commissioned by the state legislature partially supports the argument long made by insurance companies that lawsuits are driving up insurance costs in Florida, the Tampa Bay Times reports.
By the numbers: The Florida Office of Insurance Regulation analyzed 58,395 insurance claims that led to lawsuits in 2022, showing that the litigated claims were more than six times as expensive as other claims.
About 28% of closed claims in Miami-Dade, Broward and Palm Beach counties led to lawsuits although South Florida wasn't hit by a hurricane in 2022, the report says. The statewide average was about 10%.
What they're saying: "We clearly had a litigation issue going on in this state," Florida Insurance Commissioner Mike Yaworsky told the Times. "This high disparity exists that ultimately everyone in the state is paying for, or has been paying for."
Research
CMT Study Reveals Significant Link Between Telematics Program Engagement and Crash Reductions
User engagement in telematics programs plays a crucial role in reducing road risk, reveals a new study from Cambridge Mobile Telematics (CMT).
The study follows the driving performance of 100,000 U.S. drivers enrolled in usage-based insurance programs over the course of three months. CMT researchers leveraged sensor data to identify instances of risky behavior such as hard braking, driver distraction and speeding. They divided the drivers into risk groups based on driving score, focusing on the 20 percent that made up the riskiest driving population.
The researchers also analyzed how often drivers open their telematics app throughout the program’s first three months, finding that 12 percent of drivers were highly engaged, opening the app more than 20 times in a four-week period. Unlike prior research, the study evaluates multiple risky driving behaviors, including hard braking, distracted driving and speeding, while controlling for mileage.
Of the riskiest drivers, researchers found that the most engaged dramatically improved their driving performance over the three-month period—improving distracted driving by 20 percent, hard braking by 9 percent and speeding by 27 percent. By analyzing telematics data against 1,500 insurance claims, CMT researchers calculated that the improvement in driving performance among the riskiest drivers would result in a bodily injury claim reduction of 5.5 percent.
The connection between app engagement and behavior change makes sense, CMT said, since users who frequently interact with the app to check for feedback and are incentivized via rewards and discounts from their insurer are more likely to improve their behavior.
“This research shows how crucial program design is for usage-based insurance programs. Not only will well-designed programs focused on generating engagement help insurers better segment risk, they’ll actually reduce it,” said Lisa Pinals, a principal data scientist for CMT and lead researcher on the study, in a statement. “More importantly, this research provides insurers and mobility companies with a road map to prevent road injuries and fatalities.”
CMT presented the findings at the Research Transportation Board annual conference on Jan. 8.
InsurTech/M&A/Finance/Collaboration
Insurtech startup DigitalOwl raises $12 million from insurance giant RGA
The Israeli startup's platform provides automated reading, summarization, and analysis of medical records for insurance companies and lawyers, providing real-time, highly accurate assistance in their underwriting, claims settlement, and fraud prevention processes.
DigitalOwl, an insurance technology company that utilizes advanced AI to interpret and transform medical records into a comprehensive and interactive digital underwriting abstract, announced on Tuesday a $12 million investment from insurance giant Reinsurance Group of America (RGA). In addition, the companies agreed to a strategic partnership to integrate DigitalOwl's technology into RGA's systems. This capital raise brings DigitalOwl's total funding to over $38 million since its inception
DigitalOwl's platform enables insurance companies to enhance the speed and efficiency of medical document analysis and case summarization. Presently, professionals with complex training manually review tens of millions of medical cases for insurance companies, making critical underwriting and claims decisions. The volume and complexity of these cases necessitate slow and meticulous review of each page, taking hours or even days dealing with cases spanning hundreds to thousands of pages. DigitalOwl's technology addresses this issue through automated reading, summarization, and analysis of medical records for insurance companies and lawyers, providing real-time, highly accurate assistance in their underwriting, claims settlement, and fraud prevention processes.
MedRisk acquires Medata - Managed Care Matters
MedRisk and Medata just announced the former has acquired the latter.
Pretty interesting move…note I’ve worked with Medata in the past and worked with Medrisk for decades – and still do.
The official release is below – here’s my take.
Joe Paduda is the principal of Health Strategy Associates
Innovation
Sure introduces Quote Assist™ to empower insurance agents with digital tools and generative AI to personalize quotes for customers
Sure, the insurance technology leader that unlocks the potential of digital insurance, today unveiled Quote Assist™, new technology that empowers insurance agents to easily generate and customize quotes for consumers as they look to purchase insurance. With advancements in generative AI, Sure is able to offer partners the best of both worlds with omni-customer experiences – full autonomy or a hybrid of digital and physical.
Quote Assist™ was born from the idea that while there's no stopping the march towards fully digital insurance experiences, sometimes a little assistance for customers is still helpful. In the case of Sure's auto insurance partners like original equipment manufacturers (OEMs) and dealership groups, they found that their on-site teams needed the ability to add insurance protection onto a customer's purchase at the point of sale. While most customers enjoy a fully digital insurance experience, some also wanted a little assistance. The problem was that their on-site agents lacked the ability to initiate and customize a quote on behalf of a customer, which would remove the friction points and add an assistive touch for customers looking to purchase a policy.
AI in Insurance
The key InsurTech trends to look out for in 2024
Speaking to a host of key industry players, FinTech Global uncovered what the companies at the heart of this burgeoning sector believe that the future will hold.
One such topic that seems to be ubiquitously considered as part of the future of the InsurTech landscape is that of AI and Machine Learning, as Efrat Marmur, VP of Marketing at Air Doctor explained. “In 2024, we can anticipate the significant impact of artificial intelligence (AI) and Machine Learning (ML) on the InsurTech landscape.
“Air Doctor is aware of the potential of these technologies in enhancing services. For example, our platform leverages AI technologies to assess travellers’ preferences and needs to provide tailored search results with recommended medical providers that meet their individual requirements.”
But what exactly is ML? Machine Learning stands as a subset of artificial intelligence (AI) and computer science. It revolves around leveraging data and algorithms to emulate the human learning process, continuously enhancing its precision over time.
It’s exactly this promise of greater precision that appeals to custom software development company Symfa. The firm, when discussing its views on the future of the InsurTech sector, opened up on the expected widespread adoption of AI and ML, explaining how it is certainly a part of their future
Announcements
ZURICH INNOVATION CHAMPIONSHIP ANNOUNCED
IN SUPPORT OF THIS IMPORTANT AND VALUABLE PROGRAM AND THE INSURTECH COMMUNITY, WE ARE OFFERING MENTORING AND ADVICE TO POTENTIAL APPLICANTS BASED IN NORTH AMERICA.
FOR FURTHER INFORMATION SEE ARTICLE BELOW AND/OR CONTACT ALAN DEMERS AT ALAN@INSURTECHCONSULT.COM OR REVIEW OUR WEBSITE INSURTECH CONSULTING
ZURICH INNOVATION CHAMPIONSHIP
Program the biggest open innovation contest for startups in the industry
Described as the biggest open innovation contest for startups in the industry, the Zurich Innovation Championship has attracted over 8,000 submissions since its launch in 2018. More than 50 startup collaborations are ongoing as a result of the global program.
“Building on the success of the first four editions, which have led to over 50 ongoing collaborations, our program continues to evolve and grow its impact,” group chief strategy officer Paolo Mantero said in a release. “This makes me even more excited for this year’s edition and the initiatives we will see come out of it as a result.”
The categories for 2024 are commercial insurance, digital simplification, life & health, and retail property & casualty. A total of 10 winners will be selected.
Startups and scaleups from all stages of maturity can apply until February 14, with the global round winners to be announced in May and the Innovation Demo Day happening in September.
“Each of the startups selected for the acceleration phase will go through a 12-week program to mature the initiative by validating the desirability, feasibility, and viability of the hypothesis created for the global finals,” Zurich noted.
“This will happen in close collaboration with the Zurich business unit that has chosen the startup. Unlike a traditional accelerator, this phase will focus also on accelerating the adoption within Zurich Business worldwide.”
Ericson Chan, group chief information and digital officer at Zurich, believes they are “redefining insurance at the dawn of hyper-innovation” by joining forces with top innovators and startups.
The Zurich Innovation Championship offers a one-of-its-kind opportunity to match startups with the biggest and boldest ideas with industry experts and Zurich leaders across the globe. It's not about where innovation happens, but rather about teaming up the right idea with the right local businesses to achieve scalable impact.
Joel Agard, Head of Innovation, Zurich
People
Luke Harris to Join Claim Assist Solutions as Head of Automotive and Technology
I’m thrilled to share that I’ve joined the Claim Assist Solutions team!
Claim Assist Solutions provides people, processes, and technology to leading insurance carriers in the personal lines auto and property, flood, and complex and commercial claims space.
Our family of brands includes Allcat Claims Service, Colonial Claims, Lighthouse Claims Service, Parker Loss Consultants, LLC, Prestige Claims Service, LLC, and Quality Assurance Adjusting Services, Inc. dba QA Claims.
We’re powered by Claim Assist, LLC Technologies, a proprietary end-to-end claim management software platform.
Together, we can deliver a full suite of tech-enabled solutions addressing all aspects of the insurance claim resolution processes
Webinars/Podcasts/Interviews
[Ed. Note: Highly Recommended] Welcome to the Predict & Prevent™ Podcast
Welcome to the Predict & Prevent™ Podcast with Pete Miller, MS, MBA, CPCU
Predict & Prevent, presented by The Institutes, explores new ways to respond to some of the biggest risk challenges facing society today by working to better predict and prevent losses before they occur.
About the Podcast
This podcast explores how innovators are combating some of the biggest risk challenges facing society today by working to eliminate losses before they occur. Host Pete Miller, President and CEO of The Institutes, and his guests define what Predict & Prevent means, why it is urgently needed and how cutting-edge technology and resiliency techniques are making it a reality. In each episode, leading experts and business leaders will share the tools and strategies that are successfully transforming risk.