News
General Motors cancels EV-only strategy, will make hybrids for U.S. market
General Motors plans to bring new hybrids to the U.S. market, reversing course after saying it would only build fully-electric vehicles
General Motors is joining other automakers in prioritizing hybrid production as the car industry looks to balance stringent emissions requirements with slower-than-expected electric vehicle sales.
During the company’s quarterly earnings call on Tuesday, GM CEO Mary Barra told shareholders the automaker would be revising its list of planned products to make space for plug-in hybrid electric vehicles (PHEV).
“Let me be clear, GM remains committed to eliminating tailpipe emissions from our light-duty vehicles by 2035, but, in the interim, deploying plug-in technology in strategic segments will deliver some of the environment or environmental benefits of EVs as the nation continues to build this charging infrastructure,” Barra commented.
The upcoming hybrid models will be available as versions of “select vehicles,” although the executive declined to elaborate further.
GM does not presently carry a hybrid in North America, although its Chevrolet Volt was one of the first models to incorporate battery and fuel-powered drivetrains. The popular PHEV was discontinued in 2019, after which the company said it would focus solely on fully-electrified vehicles.
Liberty Mutual announces 250 more layoffs
Liberty Mutual Insurance Co. confirmed Thursday it will lay off a further 250 people as part of its ongoing restructuring.
The latest job cuts affect staff in its U.S. retail markets and global risk solutions business and other corporate departments, a Liberty Mutual spokesman said in an email.
Positions eliminated will be effective in April or May, the spokesman said. Laid-off staff may be offered other positions in the organization and will be eligible for severance and outplacement assistance if they choose not to pursue them, he said.
Liberty Mutual had already eliminated 850 positions, or 2% of its U.S. workforce, last year. The latest layoffs affect about 0.5% of its U.S. workforce, the spokesman said.
Liberty Mutual also cut about 370 U.S. positions in a reorganization of its personal lines and small commercial insurance business following the sale of units in Europe and Latin America last year.
Bayer Jury’s $2.2 Billion Roundup Verdict Is Biggest Yet
Bayer Jury’s $2.2 Billion Roundup Verdict Is Biggest Yet
Bayer AG’s Monsanto unit was ordered by a Pennsylvania jury to pay more than $2.2 billion to a former Roundup user who blamed his cancer on the weedkiller in the largest verdict so far in five years of litigation over the herbicide.
Jurors in state court in Philadelphia Friday awarded John McKivison $250 million to compensate for his losses and $2 billion in punitive damages over his claims that years of using Roundup at work and at home caused his cancer. The 49-year-old was exposed to Roundup when he worked as a landscaper, according to evidence in the case.
Commentary/Opinion
Insurance industry faces challenges amidst severe weather and economic trends: Triple-I/Milliman
In a recent virtual webinar, the Insurance Information Institute (Triple-I) and Milliman shared underwriting projections and insights into the property/casualty insurance industry, shedding light on challenges and trends shaping the sector.
The forecast for the 2023 net combined ratio for the property/casualty industry is 103.9, with commercial lines outperforming personal lines.
Commercial lines are expected to have a net combined ratio of 97.7, while personal lines face a higher ratio of 109.9. The surge in severe convective storm losses is identified as the primary driver of the overall adverse results.
According to Michel Léonard, Chief Economist and Data Scientist at Triple-I, key macroeconomic trends, including inflation, interest rates, and overall economic growth, are impacting the industry’s results.
Real gross domestic product (R-GDP) in the third quarter of 2023 accelerated to 4.9%, but economists expect year-over-year growth of 2.1%. Year-over-year property/casualty underlying growth grew 1.3% in 2023, forecasted to grow 2.6% in 2024.
Dale Porfilio, Chief Insurance Officer at Triple-I, highlighted the challenging financial results for homeowners, stating that the net combined ratio for 2023 is forecasted at 112.3, the worst since 2011.
IIHS: Better Detection of Large Trucks Would Improve Front Crash Prevention
Front crash prevention systems aren’t as good at preventing crashes with large trucks and motorcycles as they are crashes with cars, two new studies from the Insurance Institute for Highway Safety show.
Most front crash prevention systems include forward collision warning and automatic emergency braking (AEB). Forward collision warning alerts the driver when a rear-end crash is imminent, and AEB automatically slams on the brakes if the driver fails to respond in time.
Reducing Truck Crashes
Today’s systems reduce rear-end crash rates with medium- or heavy-duty trucks by 38% and rear-end crash rates with motorcycles by 41%, compared with a 53% reduction in rear-end crash rates with other passenger vehicles, an IIHS study of more than 160,000 crashes found.
“These reductions are impressive for all vehicle types, but the safety benefits could be even larger if front crash prevention systems were as good at mitigating and preventing crashes with big trucks and motorcycles as they are with cars,” said Jessica Cicchino, IIHS vice president of research.
Specifically, such systems could prevent an additional 5,500 crashes a year with medium or heavy trucks and another 500 crashes with motorcycles
InsurTech/M&A/Finance/Collaboration
Global insurtech funding down 72% last year from 2021 peak -report
Funding of the global insurance technology (insurtech) sector dropped to $4.5 billion in 2023, down 44% from 2022 and off 72% from its 2021 peak, broker Gallagher Re (AJG.N), opens new tab said in a report on Thursday, after investors got burnt by frothy valuations.
Poor performance by U.S. insurtech Lemonade (LMND.N), opens new tab, which has lost more than 85% of its stock market value since early 2021, is among high-profile setbacks to have curtailed the appeal of the sector.
"The poster child insurtechs that were well-known didn't perform particularly well when they went public," said Andrew Johnston, global head of insurtech at Gallagher Re. "Lots of non-insurance investors were writing cheques, we've now seen a lot of those investors leave."
However, reinsurers, who tend to focus on insurtech players at a more advanced stage of their growth, made investments in a record 148 deals, 12% higher than the previous record of 132 deals in 2019, the report showed.
The most active corporate venture capital investor in 2023 was Munich Re Ventures (MUVGn.DE), while the most active traditional venture capital investor was Plug and Play. Insurtech firms specialising in artificial intelligence were attracting attention, such as those using AI to detect claims fraud, Johnston said. Deal size has shrunk in line with smaller valuations, and the number of deals last year held up better than deal volume, the report said.
Innovation
OCTO Telematics Enhances Road Safety with Crash Detection
Even with the overall number of crashes decreasing in Europe and the US, road safety remains a global concern. To make our roads safer, strong, actionable solutions are needed to prevent road traffic deaths and injuries.
By leveraging one of the most ubiquitous and pervasive technologies already in every driver's pocket, the smartphone, OCTO is revolutionising road safety. It brings the intelligence of instant crash detection to a mobile phone, all without the need for driver interaction.
The OCTO solution is profoundly transformative of the user experience, proactively supporting drivers at their time of need. It does this by turning the smartphone into an active sensor for detecting severe crashes, and automatically requesting assistance to reduce the impact on human life.
With over 90% of the population in Europe and North America using smartphones and the ease of installing software via app stores, there are no barriers towards adoption and therefore increasing the safety equipment of vehicles or offset the lack of it.
In addition to the goals of improved driver safety, the OCTO solution fits perfectly into several use cases across many industries. Crash Detection via Smartphone provides additional information related to a crash event, enabling a more efficient claims management process for insurers, right from the early first notice of loss (FNOL). For fleet operators, the beneficial effects include improved duty of care towards drivers, reduced downtime of vehicles under management, and with respect to the wider ecosystem of operating in urban areas, helping the pursuit of sustainability in smart cities.
This cutting-edge technology detects mid and severe crashes, using the smartphone's on-board sensors and an AI algorithm based on billions of real crash data collected by OCTO.
AI in Insurance
AI is hastening the demise of legacy telematics systems
The evolution of fleet-based telematics is about to step up a gear. But as the rush for enterprise systems that leverage artificial intelligence (AI) gains momentum, it also looks set to accelerate the demise of old-school vehicle telematics systems.
And it’s easy to see why. In recent years, legacy telematics technology are increasingly taking a back seat, replaced by a new generation of cloud-based connected platforms. While some older systems were first developed decades ago, the biggest downside is that many require data to be downloaded manually.
In some cases, the data is entered into spreadsheets or recorded on paper. As I wrote in diginomica in 2022:
For us at Samsara, our biggest competitor in rolling out new technology to businesses and organizations with vehicles and machinery is pen and paper. Sometimes literally. Advances in mobile communication have helped to solve the need for human intervention. But this doesn't address the complexity of having multiple vendor solutions — such as one for engine diagnostics, tracking, safety, compliance, cargo monitoring etc. — and how this data from multiple sources can be used to create a single view of an entire fleet.
Of course, it's possible to find workarounds. But with the emergence of a new breed of AI-powered solutions coming down the road, it seems time is running out for these siloed technologies that require manual intervention.
After all, AI needs data to fuel its systems. Old-school telematics solutions — even those that have been upgraded — simply can’t come anywhere near a modern, digitally native platform that generates quality real-time data.
Philip van der Wilt joined Samsara from ServiceNow where he most recently served as senior vice president and general manager of Europe, Middle East and Africa (EMEA). Prior to ServiceNow, he was vice president of EMEA sales at CommVault and held numerous sales roles at EMC and EMC companies.
Generative AI Can Transform Fraud Detection and Customer Service in the Insurance Industry, Says Info-Tech Research Group
In the face of intensifying competition in the insurance sector, traditional firms and digital startups are under pressure to deliver outstanding customer experiences. The strategic implementation of generative AI (Gen AI) has emerged as a significant differentiator.
Despite its potential, many insurers have yet to fully harness Gen AI's capabilities, often constrained by a lack of a comprehensive deployment strategy. Recognizing the critical need for insurers to adapt and innovate, Info-Tech Research Group has recently unveiled its latest research, Generative AI Use Case Library for the Insurance Industry.
Info-Tech Research Group's "Generative AI Use Case Library for the Insurance Industry" blueprint highlights the significant benefits the industry can harness through the implementation of generative AI. (CNW Group/Info-Tech Research Group)
Customers seek innovative products, services, and experiences tailored to their unique requirements. When appropriately adopted and implemented, Gen AI can significantly elevate a company's standing in the market. This blueprint empowers IT leaders within the insurance sector to identify and apply Gen AI use cases strategically, thereby enhancing customer satisfaction, fostering innovation, and securing a competitive advantage in a dynamic market landscape.
"Generative AI represents a pivotal shift in the insurance industry, enabling companies not only to streamline operations and enhance risk mitigation but also to innovate and personalize customer experiences like never before," says David Tomljenovic, head of financial services industry research at Info-Tech Research Group.
"Embracing Gen AI proactively is important for insurers to stay ahead of the curve, satisfy the ever-evolving demands of their customers, and safeguard their position in an increasingly competitive landscape."
2023 REVIEW
Insurance Information Institute Releases Its 2023 Annual Report
The Insurance Information Institute (Triple-I) released today its 2023 Annual Report, highlighting the organization’s accomplishments in a year when the U.S. saw a record number of weather and climate disasters causing at least $1 billion in damages.
Triple-I is making clear how U.S. #insurers & #reinsurers have long been seeing the impacts of increased #climaterisk & are promoting a more collective and communal approach to physical infrastructure #resilience building. @III_SeanK
“Climate risks are being given additional media attention, yet insurance is increasingly entering into the discussion. Triple-I is making clear how U.S. insurers and reinsurers have long been seeing the impacts of increased climate risk and are promoting a more collective and communal approach to physical infrastructure resilience building. It is one of the reasons Triple-I contributed its flood mitigation insights in 2023 to a National Institute of Building Sciences report on resilience and another developed in consultation with Milwaukee, Wisconsin’s Metropolitan Sewerage District,” stated Sean Kevelighan, CEO, Triple-I, in his Annual Report letter. “Looking ahead to 2024, Triple-I plans to leverage its continued communications success around legal system abuse, in particular, focusing on third-party litigation funding.”
“Triple-I successfully communicated in 2023 to consumers, the media, policymakers, and industry professionals about the primary issues impacting the cost of auto, home, and business insurance: legal system abuse, climate risks, and the regulatory environment in which insurers operate. To achieve these goals, Triple-I highlighted how excessive litigiousness results in higher insurance costs, how mitigation can reduce climate risks, and explained the role state and federal policymakers have on the cost of doing business for insurers,” said Jennifer Kyung, chairwoman, Triple-I’s Executive Leadership Committee, and Property & Casualty, Chief Underwriter, USAA, in her Annual Report letter.
Report: 2023 Combined Ratio Forecast at 103.9, Commercial Lines Performed Best
The 2023 net combined ratio for the property/casualty industry is forecast to be 103.9, with commercial lines at 97.7, outperforming personal lines at 109.9, according to the latest underwriting projections by actuaries at the Insurance Information Institute (Triple-I) and Milliman.
Record levels of severe convective storm losses were the single biggest driver of the overall adverse results.
Hard markets continue with 2023 net written premium growth forecast at 9 percent, the actuaries added.
The quarterly report, “Insurance Economics and Underwriting Projections: A Forward View”, was presented on Jan. 30, during a members-only virtual webinar.
Inflation, interest rates and overall economic underlying growth were key macroeconomic trends impacting the property/casualty industry’s results, said Michel Léonard, Ph.D., CBE, chief economist and data scientist at Triple-I.
“Real gross domestic product (R-GDP) in the third quarter of 2023 accelerated to 4.9 percent, but economists still expect year-over-year growth of 2.1 percent,” said Léonard, noting that for GDP, “revised Q3 numbers did not disappoint but all eyes remain on Q4.”
The consumer price index (CPI) continues to slow down to 3.1 percent as of November, but CPI, less food and energy, is still up 4 percent year over year, he added.
2024 PREDICTIONS
Innovation Unleashed: Insurtech Leaders Paint a Bold Picture for 2024
The insurance landscape will continue to evolve as leaders predict we will see a focus on hyper-personalization, embedded insurance, and the humanization of AI.
The leaders of five insurtech firms recently shared their predictions for 2024 with Risk & Insurance. Some things are safe to bet on continuing in the new year, like the fast pace of change and macroeconomic challenges on a global scale.
But what else can we expect to see after ringing in the new year? The experts we spoke with predicted changes to the ways we view risk, enhanced partnerships, and a focus on improving the claims journey for customers and insurers alike. Here are more of their predictions.
The Changing Nature of Risk
Jacqueline Legrand, CEO and co-founder of MAPTYCS, talked about the changing nature of risk and how insurtechs and insurers can partner together using new technologies to better manage risk.
She said, “Risk management will become critical for all stakeholders in the insurance market to keep the cost of risk under control for both insurers and insureds. The severity and frequency of severe weather and cyber events will only continue rising, and insurance alone cannot be the answer.”
She continued, “I see this as an excellent opportunity for insurtechs to collaborate with the insurance professionals and help the industry better leverage AI, geospatial analytics, and real-time external data. New technologies will open lanes to share all types of data between customers and insurers to rebuild trust, set the foundation of a sustainable insurance system, and meet clients (and talents) evolving expectations.”