Commentary/Opinion
Open Letter to Carriers: R&D Investment Needed to Close the Gap
What is the purpose of the insurance sector? Presumably, it’s to provide financial security to individuals, enterprises and communities by transferring risk in a way that provides a degree of certainty to policyholders.
Unfortunately, climate change and the large, ever-growing insurance protection gap are fundamentally incompatible with this core purpose. Therefore, it’s essential that individual insurance corporations help to lead a collaborative effort to address this market failure and substantially increase industry R&D expenditures.
Communities can never be financially secure with protection gaps near or greater than 50 percent for catastrophic perils. If communities are insecure, individuals and enterprises within them are, too, regardless of the insurance coverage they individually possess. Existing insurance products and services provide significantly less value if whole communities are insecure, putting the current business model for insurance at risk. Doing nothing but raising rates and removing coverage is not a viable business strategy. The current way insurance is delivered needs to be reimagined.
We understand — insuring high-risk individuals, enterprises and communities is difficult, especially when risk is rapidly increasing. Some may even say those customers are uninsurable. We don’t blame the industry for raising prices and removing coverage because we know that increasing risk means that the cost to transfer risk must increase, too. But this is not the whole story.
Raising prices and removing coverage are not the only tools in the carrier toolkit for responding to climate change. We can also innovate. The Massachusetts Institute of Technology defines innovation as “the process of taking ideas from inception to impact.” The impact we need right now is to close the protection gap — not just for catastrophic property insurance but also for coverages like performance guarantees and insurance for emerging climate technology that will accelerate the transition to a low carbon economy and life, health and benefits solutions that will provide financial security against the human impacts of climate change-driven catastrophes.
News
Presidents' Day 2024 - Date & Holiday
Presidents' Day is a federal holiday celebrated on the third Monday in February; Presidents' Day 2024 will occur on February 19. Originally established in 1885 in recognition of President George Washington, the holiday became popularly known as Presidents' Day after it was moved as part of 1971’s Uniform Monday Holiday Act, an attempt to create more three-day weekends for the nation’s workers. While several states still have individual holidays honoring the birthdays of Washington, Abraham Lincoln and other figures, Presidents' Day is now popularly viewed as a day to celebrate all U.S. presidents, past and present.
The story of Presidents' Day date begins in 1800. Following the death of George Washington in 1799, his February 22 birthday became a perennial day of remembrance.
At the time, Washington was venerated as the most important figure in American history, and events like the 1832 centennial of his birth and the start of construction of the Washington Monument in 1848 were cause for national celebration.
While Washington’s Birthday was an unofficial observance for most of the 1800s, it was not until the late 1870s that it became a federal holiday. Senator Stephen Wallace Dorsey of Arkansas was the first to propose the measure, and in 1879 President Rutherford B. Hayes signed it into law.
Top 20 Most Valuable Insurance Companies in the US
In this article, we will take a look at the top 20 most valuable insurance companies in the US. If you want to skip our detailed analysis, you can go directly to Top 5 Most Valuable Insurance Companies in the US.
Will Insurance Prices Impact Monetary Policy?
On January 12, Reuters reported that the surge in auto insurance prices has been preventing inflation from declining further. According to the report, motor vehicle premiums surged by a staggering 20.3% in December 2023 from a year earlier in December 2022. This has been the largest increase in motor vehicle insurance premiums since the mid-70s. Auto insurance premiums are primarily rising due to the inflating cost of labor and car parts supported by the general expansion of car prices over the past few years. According to the report, auto insurance policies may not see an unexpected surge over the next 12 months. The report highlights that auto insurance prices have rarely contributed to the rise in inflation in the past. On the contrary, auto insurance prices were responsible for 15% of headline price increases in the fourth quarter of 2023. However, the impact auto insurance prices may have on the monetary policy over the next 12 months is rather ambiguous. Since the industry is regulated on a state-by-state basis, experts may be unable to assess the impact regional insurance prices may have on the national consumer price index.
Got the Insurance Blues? Auto and Home Insurance Costs are Soaring
Car insurance is on an amazing run. For 13 straight months, insurance is up at least 1.0 percent. For 20 straight months car insurance is up at least 0.7 percent.
Home insurance, if you can get it at all from any private insurer, is also rising at a fast clip as the lead chart shows.
Insurance does not really go up monthly as shown. Rather, people see a big jump in prices at annual or semi-annual renewals. The BLS smooths this out. CPI Car Insurance Percent Change From Year Ago
Car Insurance Notes
For 11 consecutive months dating to March of 2023, car insurance has been rising at least 15 percent year-over-year.
For 17 consecutive months dating to September of 2022, car insurance has been rising at least 10 percent year-over-year.
CPI Home Insurance Percent Change From Year Ago
Compared to auto insurance which is rising across the board, the above chart looks relatively benign. But that is a result of BLS smoothing two ways. As with cars, people see a big jump in prices at annual or semi-annual renewals. The BLS smooths this out. Second, if you live in a flood zone, hurricane zone, or fire zone, your costs are more likely to be up 100 percent than 4 percent, if you can get insurance at all.
AI in Insurance
5 key generative AI use cases in insurance distribution
GenAI has taken the world by storm. You can’t attend an industry conference, participate in an industry meeting, or plan for the future without GenAI entering the discussion.
As an industry, we are in near constant discussion about disruption, evolving market factors – often outside of our control (e.g., consumer expectations, impacts of the capital market, continued M&A) – and the most optimal way to solve for them. This includes use of the latest asset / tool / capability that has the promise for more growth, better margins, increased efficiency, increased employee satisfaction, etc. However, few of these solutions have achieved success creating mass change for the revenue generating roles in the industry…until now.
Technology has largely been developed to drive efficiencies, and if properly adopted, there have been pockets of achievement; however, the individuals required to use the technology or enter in the data that powers the insights to drive the efficiencies are often the ones who reap little to no benefit from the solution. At its core, GenAI has increased the accessibility of insights, and has the potential to be the first technology widely adopted by revenue generating roles as it can provide actionable insights into organic growth opportunities with clients and carriers. It is, arguably, the first of its kind to provide a tangible “what is in it for me?” to the revenue generating roles within the insurance value chain giving them not more data, but insights to act.
There are five key use cases that we believe illustrate the promise of GenAI for brokers and agents,
Heather Sullivan, Managing Director – Insurance, Strategy, Accenture Bob Besio, Senior Manager – Strategy & Consulting, Insurance, Accenture Christine McLaughlin DiGalbo, Senior Strategy Consultant, Insurance, Accenture
InsurTech/M&A/Finance💰/Collaboration
VIU by HUB partners with HoneyQuote to provide Florida home and condo owners more insurance options in response to market challenges
VIU by HUB (VIU), an omnichannel insurance brokerage platform, today announced its partnership with HoneyQuote, a Florida home and condo insurance marketplace. The partnership provides expanded regional carrier options and specialized advice for Floridians seeking personal insurance amidst increasing rates and diminished choice in one of the costliest markets1 in the country.
Obtaining insurance in Florida has become increasingly difficult due to challenges of affordability and availability. In the last five years, Florida insurance premiums have risen more than 2.5 times the national average2. Additionally, Floridians have fewer options available. In recent years, at least six insurers have become insolvent, and more than a dozen others have left the state or stopped writing new business. All of these factors are contributing to the need for more choice and options to support and serve Floridians.
“National carriers have largely pulled out of Florida leaving many homeowners scrambling to find new coverage,” said Bryan Davis, EVP and Head of VIU. “Through our partnership with HoneyQuote, VIU is doubling down on our commitment to bring innovation to a complex market and help mitigate the insurance protection gap. Floridians need a broker now more than ever to help guide them through their options and provide personalized advice to overcome the immense challenges they face.”
Recommended Events
Insurtech New England | Boston | Feb 28, 2024
Discover the future of insurance at our InsurTech event! Explore modernizing brands in legacy industries through tech innovation.
Read more on Eventbrite
Step into the future of insurance innovation at the Modernizing a Brand in Legacy Industry event! Anticipation will buzz as industry leaders gather to explore the intricacies of modernizing brands entrenched in legacy systems. Against the backdrop of rapid technological advancements, discussions will delve deep into the challenges and opportunities of infusing fresh vitality into age-old institutions. From leveraging AI-driven underwriting algorithms to implementing blockchain for transparent claims processing, our event will ignite conversations on navigating the delicate balance between tradition and transformation.
Industry experts will exchange insights on harnessing data analytics to personalize customer experiences while navigating regulatory landscapes. With a shared commitment to reshaping the industry's landscape, our event will serve as a catalyst for driving forward-thinking strategies and fostering collaboration in the pursuit of modernizing brands in a legacy industry. Don't miss out on this opportunity to be part of shaping the future of insurance – register now!
Agenda
- 5:30 - 6:30 - Registration & Networking
- 6:30 - 6:40 - Event KickOff; EMCEE: Mitch Ocampo, CEO, Haven Life
- 6:40 - 6:50 - Presentation: Modernizing a Brand in a Legacy Industry; Bryan Falchuk, President & CEO, PLRB
- 6:50 - 7:00 - Meet a Startup: Vertical Insure; John Delsignore, Head of Insurance
- 7:00 - 7:45 - Discussion Panel: The Challenges of Modernizing Insurance - Startup & Incumbent Views
InsurTech Chicago's First Pitch Night w/1871 & InsurTech Israel | Mon, Mar 4, 2024 at 4:00 PM
The InsurTech startup industry continues to innovate. Join us as we hear from the latest emerging startups.
InsurTech Chicago will be hosting Pitch Night on March 4, 2024. This is the first of it's kind in the Chicago community in partnership with 1871 Independence Incubator and InsurTech Israel.
This event offers emerging startups a valuable platform to showcase their ideas to the vibrant Insurance Chicago community while having th chance to meet and connect with Israeli startups during their US tour.
Startups will get the opportunity to present their innovative concepts to a distinguished panel of judges well-versed in start-up development, insurance, and technology. Get ready for an unforgettable evening.
Spring InsurTech Conference 2024 | NYC | March 20-21 | Leading insurance conference on the East Coast
Join the 5th annual Insurance Industry Conference, March 20-21, 2024, a premier event for networking and innovation.
The Spring program is one the largest InsurTech conferences held in NYC bringing together insurers, InsurTech firms, investors, and industry leaders. Tracks are dedicated to Property & Casualty and Life & Health. Join the nearly 1000 participants for this must attend event blending technology, trends, and insurance.
People
Aclaimant announces CEO succession
Chicago-based risk management information systems maker Aclaimant Inc. Thursday said Kathy Burns has been named CEO, succeeding David Wald, who will continue to lead the organization as president and co-founder.
Ms. Burns currently serves as an independent director for the Federal Home Loan Bank of Chicago. She also previously served on Aclaimant’s board from December 2020 through February 2024 and was executive chair from May 2023 through February 2024.
She was named senior vice president and chief digital officer for Ryan Specialty Group LLC in 2017, where she served until 2023. Before that, she was CEO at Ventiv Technology, formerly Aon eSolutions.
Ms. Burns was named one of the Business Insurance Women to Watch in 2006.
Google unit appoints Nigel Walsh global insurance head
Nigel Walsh (pictured), who left Deloitte in 2021 to serve as Google’s managing director for insurance, has a new role to play at the tech giant.
The Capgemini alumnus said in a LinkedIn post: “I’m delighted to start my next chapter at Google Cloud, leading our global insurance team. I could not be more excited to do this at a time when the pace of change with technology and specifically AI (artificial intelligence) has never been so exhilarating and relevant to an industry.”