News
The fascinating link between Valentine’s Day and insurance
Did you know love and insurance are intrinsically connected? That Valentine’s Day has a much bigger impact on the insurance industry than anticipated?
Yes, that’s right!
It’s only in recent times due to economic and cultural changes that insurers figured out this connection. Now they’ve enthusiastically hopped on the Valentine’s Day bandwagon due to the high demands they are likely to experience.
Digital Decline?
The disruption of COVID saw digital usage peak in last year’s findings, but the most recent results show usage has diminished across digital experiences. Are property claims customers starting to abandon digital channels in favor of speaking with someone instead?
The results of the 2023 U.S. Property Claims Satisfaction Study reveal a concerning downward trend in digital channels being used to submit and access information throughout the claim process.
With digital channels promising customers convenience and providing carriers with a cost-effective means for servicing customers, this is a concerning trend to focus on. What is driving this decline in usage? How is the overall claim satisfaction impacted by fewer customers using this channel?
Future of the office in doubt as workers hesitate to return
The battle to bring people back to the office is raging, and landlords are finding that only the highest-quality office buildings with slick interiors, modern amenities and access to outdoor space are gaining traction with tenants and workers.
Labor's gains hang in balance as inflation roars and recession looms
Declining labor participation rate threatens long-term growth of the US economy
Tight labor market draws in teenagers after decades of declines
Skills shortage imperils global energy transition
Amazon faces recruitment, retention challenges as labor competition grows
U.S. employers gave 58% of workers the choice to work either fully remotely or in a hybrid arrangement for the first half of 2022, according to a recent McKinsey & Co. Inc. survey of 25,000 employed adults, and many employees have expressed limited desire to return to the office on a full-time basis.
"I've done a number of deals where tenants have either relocated or renewed on a smaller footprint than what they previously had under lease. And it's all driven by the uncertainty of the workplace," Chicago-based Avison Young principal Fred Ishler said in an interview.
How to protect P&C profits under pressure
Inflation is driving costs even higher and faster in most markets, undermining underwriting profitability throughout the modern insurance landscape. Managing general underwriters (MGUs), managing general agents (MGAs), insurance carriers, reinsurers are all feeling the pressure as customers look for savings.
Motivated by price, as many as one in ten of U.S. consumers are now shopping around for new insurance providers, according to the consultancy firm Bain. The same is true for small and large businesses.
This has created a challenging environment where actors are forced to compete on price. Faced with this new reality, what actions can be taken to keep bottom lines as healthy as possible? Here are three options.
Insurers risk insolvency if expenses and losses continue to climb - report
A new paper from the Insurance Information Institute (Triple-I) has found that US auto and homeowners’ insurance premiums rates did not keep up with the inflation rate in 2020 and 2021 – a decision that has led to the significant premium increases that began last year and will continue well into 2023.
“As material and labor costs rise, the cost to repair and replace damaged homes and vehicles increases. If premium rates didn’t reflect these increased costs, insurers would quickly exhaust the funds they set aside— ‘policyholder surplus’—to ensure that they can afford to keep their promises to pay all claims,” said the new Triple-I brief, “Trends and Insights: How Inflation Affects P/C Insurance Premium Rates – and How it Doesn’t.” Triple I CEO, Sean Kevelighan
Car-Data Firms Flop as Automakers See Dollar Signs in Software
Auto companies promising billions in new software revenue by the end of the decade have been hiring engineers left and right, poaching executives from tech giants and trying to figure out how to process and monetize the oodles of data that connected cars produce.
One would think this would translate to fertile ground for startups whose mission is to help carmakers sell data. Instead, two high-profile companies in the space — Otonomo and Wejo — have been in dire financial straits.
Otonomo, an Israeli startup that went public by merging with a special purpose acquisition company in 2021, reported just $2 million of revenue in the third quarter. While that was up 12-fold from a year earlier, losses widened. In December, the company cut jobs to preserve its dwindling cash. On Thursday, Otonomo announced plans to merge with another company, a digital roadside-assistance firm called Urgently.
Wejo, a British startup that also completed a SPAC merger in 2021, is taking the creative route to shoring up its finances. After issuing a going-concern warning last year, it’s in the process of merging with another blank-check company — a transaction that Bloomberg car dataOpinion columnist Chris Bryant has dubbed a Re-SPAC — to secure $100 million in fresh funding. Wejo’s goal is to be cash-flow positive by 2025.
The General Motors-backed company is succeeding and growing despite the macroeconomic climate, a Wejo spokesman said in an email. It expects to triple or quadruple revenue this year, though sales amounted to just $4.8 million in the first nine months of 2022.
Right to Repair Legislation Re-Introduced in Congress
Automotive aftermarket associations including, MEMA Aftermarket, Auto Care Association, CAR (Consumer Access to Repair) Coalition, and the Specialty Equipment Market Association (SEMA) applauded the reintroduction of the Right to Equitable and Professional Auto Industry Repair (REPAIR) Act (H.R. 906) in the U.S. House of Representatives.
The legislation was reintroduced by United States Reps. Neal Dunn (R-FL), Brendan Boyle (D-PA-02), Warren Davidson (R-OH-08), and Marie Gluesenkamp Perez (D-WA-03) and seeks to ensure the preservation of consumer choice, a fair marketplace, and the continued safe operation of the nation’s 292 million registered passenger and commercial motor vehicles, 70% of which are maintained by independent repair facilities.
InsurTech/M&A/Finance💰/Collaboration
Insurance companies embracing technology
Twenty years ago, I read the book, “The Age of Access,” by Jeremy Rifkin. The book explained how the expansion of the internet will affect every aspect of our daily lives.
On vacation this past week, I watched a video that made me realize how Rifkin’s views of the future are coming true. In London, Amazon has opened a grocery store that requires shoppers to have downloaded their application to their phone to gain access to the store. Once in the store, customers can load products into their cart and leave the store. All of the products in their cart will be scanned and charged to their Amazon App.
The video explained in detail how the system eliminated theft. The same week I read an article on how Walmart believes it loses $3 billion dollars a year in store thefts. If you do not like self checkout, you might not like what’s coming.
Bob Hollick, State Farm Insurance agent in Washington
Insurtech Cowbell Teams Up With Millennial Shift Technologies, An E-Trading Platform Suite
Cowbell, the provider of cyber insurance for small and medium-sized enterprises (SMEs), announced a partnership with Millennial Shift Technologies, a custom branded e-trading platform suite.
The partnership will deliver Cowbell’s cyber insurance programs, Cowbell Prime 100 and 250, on Millennial Shift’s e-trading broker platform, mFactor.
Now, more than ever, brokers are “looking for ways to complete business transactions online.”
According to Deloitte’s ‘2022 Insurance Industry Outlook’ report, online platforms such as mFactor are “essential for achieving most digital transformation goals as they serve as a key enabler of workforce technology and operational flexibility.”
Roadzen, Inc., a Leading Global Insurance Technology Company, Announces Plans to Become a Publicly Traded Company via Merger with Vahanna Tech Edge Acquisition I Corp. | Business Wire
Roadzen, Inc. (“Roadzen”), a global insurance technology company, and Vahanna Tech Edge Acquisition I Corp. (“Vahanna”) (Nasdaq: VHNA), a special purpose acquisition company, announced today that they have entered into a definitive merger agreement. Upon the closing of the transaction, the combined company will operate as Roadzen Inc. and expects to be listed on Nasdaq. The transaction reflects a pre-money equity value for Roadzen of approximately $683 million. The merger is expected to close during the second quarter of 2023, subject to satisfaction of customary closing conditions. Roadzen’s CEO Rohan Malhotra will continue to lead the combined company following the closing of the transaction.
Insurtech startup OpenEyes emerges from stealth with $23M, catering to fleets with tech-powered commercial auto insurance
OpenEyes, an insurtech company serving commercial automotive fleets, today emerged from stealth with $18 million in Series A funding led by global software investor Insight Partners and Pitango First, with participation by MoreVC, which led the seed round together with Pitango First. OpenEyes will use the funding to fuel the development of its cutting-edge technology and to hire additional team members to support its increasing US operations. To date, OpenEyes has raised a total of $23 million.
OpenEyes offers commercial automotive insurance to fleets of all kinds at more competitive rates, first and foremost by reducing the frequency and severity of traffic accidents. Using OpenEyes's innovative technology, fleet managers and safety officers can identify the sources of risk in their fleet, empowering them to implement practices that reduce the frequency of accidents. In addition, OpenEyes enables precise underwriting and streamlines claims handling and prevention. Having rebuilt commercial automotive insurance for fleets from the ground up, OpenEyes offers competitive rates to a commercial automotive insurance market that has been plagued for years by rising costs for carriers and fleets alike.
InsurTech Spotlight: How vQuip’s CEO Left the Football Field and Made His Next Play in Insurance
Cam Serigne, like many in the insurance industry, has had an unconventional career path, serving as a football player in the NFL before launching his own InsurTech. But he said joining an unfamiliar industry like insurance was one of the secrets to his success — namely, because it taught him to problem solve.
“That kind of problem-solving mentality has been instilled in me, where I was lucky enough to be the least experienced guy in the room for a while and learn so much,” he said.
Serigne is the CEO and founder of vQuip, an InsurTech platform providing liability coverage for renters of individual boats and other beach equipment. Before vQuip, however, he had a different career entirely, serving in the NFL as a tight end with the New Orleans Saints and Carolina Panthers.
People
Governor Names Yaworsky New Florida Insurance Commissioner
Florida’s governor has named the insurance department’s former chief of staff as new insurance commissioner, filling a position that has been vacant since the former commissioner resigned in late December.
Michael Yaworsky, now vice chair of the Florida Gaming Control Commission, was chief of staff for Insurance Commissioner David Altmaier from 2017 to 2022, Gov. Ron DeSantis’** office said in a statement Friday. Altmaier stepped down in December but did not give a reason, at least publicly, and has yet to announce any future plans.
Yaworsky will serve as interim insurance commissioner until he is ratified by the state Financial Services Commission.
“He’s the safe choice,” said former Florida state Sen. Jeff Brandes, R-St. Petersburg, who has been outspoken about Florida’s property insurance woes. This way, they don’t have to do a nationwide search. They don’t have to try and explain the Florida insurance market. He already has some grasp of the market and what’s going on.”
Yaworsky, a lawyer with a bachelor’s degree from from Florida State University and a law degree from Samford University, may have little experience managing an entire regulatory agency. But he does have years of experience as legal counsel and advisor in state government in Florida and Georgia.