Commentary/Opinion
The Next Wave of Technology in Claims Management
The landscape of claims management is undergoing a significant transformation, driven by the advent of cutting-edge technologies.
Innovations like blockchain, telematics, and virtual reality are not just buzzwords; they are actively reshaping how claims are processed, managed, and resolved in the insurance industry. Understanding these technologies and their applications in claims management is crucial for professionals looking to stay ahead in a rapidly evolving field.
claimspages
Research
Car insurance is up 43% since 2022. Here's how to lower your premiums
More drivers are forgoing car insurance altogether as rates increase
Feeling burned by sharp increases in your car-insurance rates over the last year? Buckle up: Insurance is only going to get more expensive.
Car-insurance premiums will continue to climb this year after rising more than 43% since January 2022, according to new research from Bankrate.
“While we hope to see rates stabilize soon, that likely won’t happen until at least 2025,” Bankrate analyst Shannon Martin said in a statement.
The average cost for full-coverage car insurance in the U.S. was $2,543 per year in January, up 26% from $2,014 in the same month of last year. In January 2022, the average rate was $1,771, according to Bankrate.
US Insurtech Market Report: Direct channel stalls in personal auto | S&P Global Market Intelligence
For many years, the growth of personal auto premiums written via the direct channel far outpaced that of the traditional market. But that dynamic changed in 2022 and 2023. While direct personal auto insurance writers are still growing, the rate of growth is lagging the rest of the market. In 2023, we estimate direct channel premiums rose 10.3%, but the rest of the market grew 18.7%.
The "direct channel" commonly refers to customers who buy insurance via the internet or mobile devices, as well as those who purchase by phone. Companies in the channel advertise heavily to consumers since there is no agent involved that will market the policies.
In 2021, for instance, we estimated direct channel premiums were up 10%, versus 2% for the rest of the market. But in 2022 direct channel growth was 3 percentage points lower. This was largely due to more modest growth from industry giants GEICO Corp. and United Services Automobile Association. Along with The Progressive Corp., those three insurers dominate the direct channel, accounting for 79% of the total direct channel premiums written.
Normally, a slowdown from market leader GEICO would present an enormous opportunity for insurance technology startups to take market share. But some of the full-stack companies have reined in their growth as well, as they look to control costs and turn a profit. Root Inc., which primarily uses a direct-to-consumer model, increased direct premiums written by only about 0.2% year over year in the first nine months of 2023. Lemonade Inc., which also markets directly, decreased its personal auto premiums written by 9.8% for the same period.
News
Allstate reveals full-year loss
The Allstate Corporation, which suffered a $1.4 billion net loss in 2022, remained in the red in 2023.
According to Allstate’s latest earnings report, here’s how the company fared in the quarter and year ended December 31. See Chart including 2023 loss of $316 million.
Focusing on the quarterly result, Allstate chair, president, and chief executive Tom Wilson said in a release: “Allstate had strong profitability in the quarter with net income of $1.5 billion due to improved auto profitability and mild weather.
US P&C carriers to seek further rate increases – report
A Moody’s Investors Service report says further rate increases are to be expected from homeowners’ insurers in the US following losses from severe convective storms.
In a sector comment, Moody’s Investors Service financial institutions associate managing director Sarah Hibler noted: “US P&C (property and casualty) companies suffered large losses in 2023 not from major catastrophes, but primarily from a series of severe convective storms.
“These storms, which include hail, straight-line wind, and tornado, are non-peak (or secondary) perils, which means they are more frequent but individually less costly than primary perils such as hurricanes.
“In recent years, growing insured exposures, higher property reconstruction costs, increased litigation, and changes in claims settlement practices have contributed to higher weather-related losses for P&C insurers.”
It was pointed out that the average annual losses in the US from severe convective storms are higher than the average annual losses from hurricanes. Additionally, from a meteorological forecasting standpoint, convective storms are difficult to predict.
“In response to growing non-peak perils, insurers are incorporating more recent experience into their modeling and pricing,” Hibler said. “Many homeowners’ insurers have continued to increase their catastrophe budgets…
California weather: Los Angeles hit by 475 mudslides as atmospheric river storm brings more rain
In Los Angeles, between six and 12 inches of rain fell, making it the third wettest two-day stretch since records began in the 1870s.
Officials are warning of further mudslides and flooding after a large amount of the city's average annual rainfall fell in just three days - while seven deaths have been reported across the state.
LA mayor Karen Bass said: "Our hillsides are already saturated. So even not very heavy rains could still lead to additional mudslides.
"Even when the rain stops, the ground may continue to shift."
Three were killed yesterday in the extreme conditions - and nearly 400 trees have fallen in the city. Another died today in a swollen Tijuana River channel near the border with Mexico.
LA fire chief Kristin Crowley said at least three dozen buildings required inspection because of mudslide damage and hillside slope failures - and seven had been marked unsafe.
Category 6? As Warming Stokes Storms, Some Want a Bigger Hurricane Category
A handful of super powerful tropical storms in the last decade and the prospect of more to come has a couple of experts proposing a new category of whopper hurricanes: Category 6.
Studies have shown that the strongest tropical storms are getting more intense because of climate change. So the traditional five-category Saffir-Simpson scale, developed more than 50 years ago, may not show the true power of the most muscular storms, two climate scientists suggest in a Monday study in the Proceedings of the National Academy of Sciences.
They propose a sixth category for storms with winds that exceed 192 miles per hour (309 kilometers per hour).
Ransomware Hackers Stole More Than $1 Billion in 2023
Ransomware gangs stole more than $1 billion in 2023, the largest amount ever recorded, according to a report published Wednesday by blockchain analysis firm Chainalysis Inc.
With ransomware hacks, cybercriminals block access to a victims’ data or files until they pay an extortion fee, typically through cryptocurrency. In 2023, hackers nearly doubled the funds stolen in 2022 and exceeded previous records made in a ransomware boom during the pandemic, according to the report.Chainalysis said ransomware hackers made off with $567 million in 2022.
The commercialization of ransomware – a phenomenon in which advanced hackers sell malware to others and take a cut of the proceeds – has made it easier to conduct such breaches. The professionalization of the crime led to an increase in the number of threat actors in 2023, said Jackie Burns Koven, head of cyber threat intelligence at Chainalysis.
Ransomware gangs are increasingly turning to a “big game hunting” strategy, which means they conduct fewer attacks throughout the year but collect bigger payments each time, sometimes extorting $1 million within a single attack, the report noted.
In one extreme example, ransomware gang Cl0p racked up over $100 million in ransom paymentsby targeting the popular file transfer application MOVEIt, used by over thousands of organizations globally, according to Chainalysis. Some high-profile victims of the hack included oil and gas company Shell, US federal government agencies and British Airways.
InsurTech/M&A/Finance💰/Collaboration
Managed Repair is Transformed with Handdii Holdings Inc and Verisk Property Integration
Handdii Holdings Inc. (“handdii”), a leading digital repair program, is proud to announce an innovative integration with Verisk (Nasdaq: VRSK), a leading global data analytics and technology provider.
This collaboration, which connects through Verisk’s XactAnalysis, aims to automate the exchange of claim data and communications, ushering in a new era of productivity and enhanced digital experiences for property claims.
handdii’s proprietary software functions as a digital repair platform, connecting insurance company adjusters and policyholders to a carefully vetted network of local contractors. This integration is set to transform the property claims landscape by simplifying and optimizing the claims reconstruction process.
William Bartley, Chief Technology Officer at handdii, stated, “We're streamlining the claims process to make it an easier and better experience for policyholders, contractors, and insurance companies. To achieve this, we have integrated with industry-leading solutions to optimize our offering. Today, we are delighted to announce this integration as a pivotal component of the interconnected claims ecosystem.”
Many of the world’s leading insurers use Verisk property estimation software and claims tools, which include solutions for every phase of a building's life. Verisk’s cloud-based solutions are connected to a comprehensive ecosystem that includes an assignment network, analytical reports, cost research, project management and third-party integrations.
Collinson Expands SmartDelay+ Travel Disruption Benefits to U.S. Underwritten by Starr Insurance
Collinson, a global leader in customer benefits and loyalty, and Starr Insurance, a global insurance and investment organisation with a presence across six continents, have joined forces to distribute SmartDelay+, Collinson’s real-time parametric travel disruption insurance product.
With the latest flight delay statistics indicating that almost 1 in 4 flights globally are delayed by at least 15 minutes* and with 133 million travelers across the globe impacted by flight delays of over 1 hour, there is an increasing need to address airline travelers' growing stress and anxiety when they embark on their journeys.
SmartDelay+, a proprietary end-to-end solution by Collinson, is a real-time, parametric insurance product which provides customers with a range of benefits in the event of a flight disruption such as an airport lounge, airport experiences including discounts at dining establishments, access to spas and automated cash compensation.
Collinson created SmartDelay in 2017 and since then it has evolved into a parametric insurance product with the addition of alternative benefits to airport lounge access, including instant cash payouts. SmartDelay is used in 35 countries by more than six million customers. Starr will provide insurance capacity for SmartDelay+ in the US and will also distribute the product to its own US customers.
Super Bowl LVIII
10 of the best insurance company Super Bowl commercials
[Ed note: the first Super Bowl, in January 1967 featured Green Bay Packers vs Kansas City Chiefs in the LA Coliseum. Ticket prices were around $12. Last year $1.B in revenue was generated for host state Arizona alone. And this year some 68M people are forecast to bet over $23B. Follow the money...]
Ahead of Super Bowl LVIII on February 11, Carinsurance.com takes a look at the best insurance company commercials, which include an appearance by Bryan Cranston in his "Breaking Bad" role as Walter White, Dikembe Mutombo blocking shots and Britney Spears' ex poking fun at his post-divorce lifestyle. But which commercial really got people talking?
On Super Bowl Sunday, there are two types of people: those who are there for the commercials and those who are there for the game and the commercials (everyone is there for the snacks).
Companies spend millions for a 30-second spot during the game to reach one of the largest viewerships of any televised event. Insurance companies are frequently among them.
From celebrity appearances that include Drake and Bryan Cranston to old-school earworms to unexpectedly gut-wrenching scenes that had people asking, “What were they thinking?” the big names in insurance have made some very memorable Super Bowl commercials.
Analysts betting on insurance ads for Super Bowl
While all eyes will be on Taylor Swift, business analysts are predicting that the Super Bowl is breaking up with commercials about cryptocurrency and artificial intelligence and cozying up to ads for “insurance and mayo.”
Super Bowl viewers will notice a “notable shift away” from technology advertisements to more “traditional products that are part of consumers’ daily lives” being advertised, Paul Hardart, a clinical professor of marketing for New York University’s Stern School of Business, told CNN.
“Given the current global uncertainties, including geopolitical conflicts and a polarized political climate, it appears that advertisers are leaning toward feel-good advertisements that are more focused on fun, humor and entertainment — aligning with the Super Bowl’s uplifting spirit,” Mr. Hardart told CNN.
Already signed up for a 30-second spot, with a price tag upwards of $7 million, is State Farm Insurance, according to the segment.