Commentary/Opinion
Data Privacy's Dirty Little Secrets: Big Implications for the Auto Insurance Ecosystem
Data privacy is a sprawling, multi-faceted, complex, and controversial issue which means different things to different audiences but has serious implications for businesses and consumers alike. And it is sure to continue to grow exponentially with the explosive adoption of data-driven technology and digitization which will drive ever greater levels of information capture and use. Meanwhile, concerns about how personal data is captured, managed and exploited are intensifying with the emergence of more data breaches, hacking, identity theft and ransomware crimes.
Our focus in this piece is fairly narrow – namely the unauthorized use of personal information in the auto insurance claim reporting, damage evaluation and collision repair process. While this is just a subset of the broader data privacy issue, the implications are quite serious and affect millions of consumers, insurers, and their supply chain partner and present exposure to hundreds of supply chain participants. These events occur more than 20 million times a year across a multi-billion-dollar ecosystem.
Data Privacy
Data privacy generally means the ability of a person to determine for themselves when, how, and to what extent personal information about them is shared with or communicated to others. This personal information can be one's name, location, contact information, or online or real-world behavior. This includes but is not limited to Personally Identifiable Information (PII).
If you are uncertain about what types of data make up your Personally Identifiable Information (PII) and how this relates to the subject of data privacy, you are not alone. But as technology adoption and complexity is accelerating at hyper-speed, ever increasing amounts of personal data are being collected and exchanged. As technology applications become more invasive, so do the uses of the associated data, including yours. read on
By: Stephen Applebaum & Alan Demers
News
California weather: Los Angeles could see flooding and landslides from intense bursts of rain
A final round of rainfall is soaking California Tuesday as the state grapples with road closures, evacuation warnings and water rescues from days of rain. Los Angeles and other parts of Southern California face the most substantial risk of flooding.
Here’s the latest:
- Over 35 million people under flood alerts: Rain continues to drench much of California on Tuesday, with downpours focused on Los Angeles and coastal Southern California, but flood watches are in place across the bulk of the state through Wednesday morning.
- Los Angeles eyes record rainfall: After exceptional rainfall inundated the city earlier this month, downtown Los Angeles could see its wettest February on record if it picks up just over 2 inches of rain. It’s also Santa Barbara’s second-wettest February on record.
Neptune Flood Launches Excess Flood Insurance Product
Neptune Flood, the largest provider of private flood insurance in the United States, today announced the launch of its excess flood insurance product for residential, commercial, and condominium (RCBAP) properties.
A Neptune excess flood policy provides coverage above the maximum limit available through the National Flood Insurance Program (NFIP), allowing customers to keep their NFIP policy if they have yet to reach their market rate. The NFIP's $250,000 residential and $500,000 commercial limits have not been modified in over 25 years, during which time the average US house price has more than doubled. Neptune's excess product, offering over $4mm of coverage, addresses this coverage gap and protects against losses in excess of NFIP limits, allowing home and business owners to appropriately protect their property.
A Neptune excess flood policy also allows policyholders to purchase enhanced protections that are not available through the NFIP. Residential customers can add coverage for temporary living expenses, basement contents, unattached structures, pool repair and refill, and replacement cost on contents; while business owners can add business interruption and building replacement cost.
‘Citizens 2.0’ is 86’d but Other Florida Insurance, Liability Bills Still Alive
A move to revamp the state-backed property insurer of last resort into Florida’s main wind carrier, a plan dubbed “Citizens 2.0,” appears to have died in the Legislature this year. But other insurance-related bills are still alive, and the governor’s effort to temporarily cut premium taxes may have gained new life.
Leaders in the Florida House of Representatives have not embraced Gov. Ron DeSantis’ plan to halt the premium tax for homes up to $750,000 for one year, a cut that could save homeowners an average of about $240, according to the Insurance Information Institute. But on the Senate side of the Capitol, Sen. Blaise Ingoglia, R-Spring Hill, last week proposed a tax package that includes the premium tax reduction, the Tallahassee Democrat and Florida Politics reported.
House leaders have expressed concerns about the loss of revenue from the premium tax cut, and have worried about a lack of guarantee that insurers would pass the savings on to consumers, according to the news reports.
Meanwhile, House and Senate bills that address Citizens Property Insurance Corp. coverage restrictions are still alive, with some changes, the Florida Association of Insurance Agents’ government affairs director reported last week. Senate Bill 1716 and House Bill 1503 would allow surplus lines carriers to take out secondary homes from Citizens.
Reinsurance: S&P expects Swiss Re to produce even better financial results in 2024
Reinsurance:S&P expects Swiss Re to produce even better financial results in 2024
Global reinsurance giant Swiss Re's financial results for 2023 demonstrate the group's continuing performance improvement, said S&P Global Ratings (S&P) in a commentary yesterday.
S&P said, “We expect Swiss Re to see even better earnings in 2024 with net income of $3.6bn (on an International Financial Reporting Standard IFRS17 basis) as market conditions remain favourable and the group's disciplined underwriting continue to bear fruit. We will continue to monitor the group's US casualty reserving in its property casualty reinsurance (P/C Re) segment as it continues to bolster these reserves.”
Swiss Re increased net income to $3.2bn in 2023 (2022: $472m).
P&C
The group's P&C Re segment returned to profitable underwriting in 2023 with a combined ratio of 94.8% (2022: 102.4%). Corrective underwriting actions, improved rates in the market, and lower-than-budgeted natural catastrophe claims helped the group reach its combined ratio target of below 95%.
S&P said, “In 2024, we expect further improvements will enable the group to record a combined ratio below 87%, on an IFRS17 basis. We will continue to monitor how the group's casualty reserves in this segment continue to develop.
Property insurers strike down on churches
Looks like there may be no coverage for acts of God for some places of worship in Texas.
As reported by KXAN in Austin, hundreds of United Methodist Churches across Texas will be losing insurance coverage they’ve had for generations and are being told to seek coverage for such perils as tornados, hurricanes and fires elsewhere.
“We were notified…in the fall of ’23 that the carrier would not be continuing that coverage,” Kevin Reed, chair of the board of trustees for the Rio Texas Conference of the United Methodist Church, told the news station. “They had found that it wasn’t profitable for them.”
About 300 United Methodist Churches within the Rio Texas Conference were under a single policy, Mr. Reed said. An insurance expert said it’s not uncommon for churches to lose coverage, and told the station that some can find individual coverage through local insurance agencies.
Mr. Reed said that strategy hasn’t been fruitful for some: “We have churches that still don’t have coverage.”
InsurTech/M&A/Finance💰/Collaboration
Open Lending Partners with Akur8 to Enhance Automotive Lending Solutions
By integratingAkur8’s innovative predictive insurance pricing models with its proprietary Lenders Protection platform, Open Lending seeks to fortify its capabilities in identifying borrower risk and offering personalised automotive loans.
Akur8’s expertise in generating swift and precise insurance pricing models complements Open Lending’s existing risk assessment framework, which boasts the ability to analyse two million borrower risk profiles and render decisions in under five seconds.
This collaboration equips Open Lending’s customers with enhanced agility to adapt to the evolving market landscape, enabling them to seize competitive pricing opportunities and explore higher-yield prospects while expanding their automotive lending portfolios securely.
The challenge of vehicle accessibility persists, particularly among near- and non-prime borrowers, as highlighted in Open Lending’s 2024 Vehicle Accessibility Report. According to the report, 25% of this demographic paid over $600 monthly for a used car purchased in 2023, a significant increase from the 8% recorded between 2020 and 2022.
Fixle, Inc. Launches out of American Family Insurance
Fixle, Inc (fixlehome.com), a technology company that simplifies home maintenance and management, has officially launched from American Family Insurance, where it was originally incubated. Founded by industry veterans Dave Theus (co-founder of HOMEE) and Amanda Schulze,
Fixle's launch as an independent company reinforces its commitment to improving home maintenance and management for all. Fixle simplifies how customers use, maintain, repair, and manage their home systems and appliances with a platform that makes collecting and accessing home information simple, secure, and connected. Its end-to-end solution benefits property managers, home inspectors, service technicians, warranty underwriters, insurance adjusters, homeowners, and integration partners by delivering valuable information precisely when needed.
Theus, Fixle's CEO, remarked, "The launch of Fixle is a testament to the traction this innovative technology and our founding team have achieved. We extend our gratitude to AmFam, our partners, investors, customers, and advisors who continue to support Fixle. Moving forward, our focus is on delivering an outstanding customer experience, expanding our user base, delivering on our product roadmap and raising additional capital to fuel our growth."
Fixle Inc., a tech company that simplifies home maintenance and management, has launched from American Family Insurance.
Dan Reed, Managing Director and President of American Family Ventures shared his excitement, "Our support for Fixle's launch as an independent entity from AmFam reflects our confidence in their mission and the comprehensive solution they're bringing to the table. As a minority investor, we're not just investing in a company; we're investing in a vision that has already shown substantial interest in the market."
AI in Insurance
3 ways AI is improving traditional insurance models
Property and casualty insurance has never been a stranger to change. In the last decade, the industry has skillfully adapted to new and evolving risks, such as the gig economy, the complex landscape of cyber threats, and the growing severity and frequency of extreme weather events. And now, the landscape of P&C insurance is witnessing yet another seismic shift, propelled by the meteoric rise of AI.
AI is quickly emerging as a powerhouse tool for traditional insurance models, distinctly impacting three critical areas: transforming P&C insurance sales and market expansion dynamics, redefining risk management parameters, and significantly slashing operational expenses. This change heralds an era of unprecedented efficiency, accuracy, and growth, reshaping the future of insurance in ways we are just beginning to understand. Here is a deeper dive into how AI is not merely altering but fundamentally reshaping the fabric of the P&C insurance sector.
- Selling more
AI is reengineering insurance sales by enabling insurers to tap into previously unreachable markets. Advanced analytics and predictive modeling are identifying new customer segments and tailoring products to suit diverse needs. This expansion is about reaching more people and offering them precisely what they need, enhancing customer engagement and satisfaction.
full article Chris Lafond CEO, Insurity
Claims
Best practices for hiring the next generation of independent adjusters
It is essential to keep up with the evolving needs of independent adjusters, especially when it comes to recruiting efforts.
New talent and technology must be able to work together cohesively to create an effective recruiting and onboarding process that is well-received by today’s workforce. By cultivating an understanding of generational needs and preferences, we can ensure that independent adjusters relate to their purpose and are empowered to deliver consumer excellence.
This is compounded when an organization is seeking the most seasoned adjusters or garnering interest from talented new entrants in our industry.
Currently, the primary target hiring generations are millennials and Gen Z. A Purdue University study on Generational Differences in the Workplace helps illuminate these target demographics:
- Millennials — Driven by meaningful work, technology and efficiency; they value a strong work/life balance. It is vital that this generation receives consistent mentorship and feedback from competent leaders.
- Gen Z — Driven by authenticity and truth; they are more money-motivated. As with millennials, Gen Z values mentorship and coaching through connected technologies.
If we had to lump together messaging between the two, claims departments should emphasize meaningful work, technology-driven solutions and balance/flexibility when casting a net for new recruits as insurance adjusters.
Troy Stewart is president and COO of Brush Claims
Repairers again rate 10 largest carriers poorly on ‘Insurer Report Card’
Twenty-five out of more than 88 auto insurance companies graded by collision repairers on quality repairs and customer service received a B or higher to earn a spot on this year’s Honor Roll in the annual CRASH Network “Insurer Report Card.”
A record 19 companies, including six of the largest U.S. auto insurers, received a grade of C- or lower. None of the 10 largest and best-known auto insurers received an overall grade higher than a C+. Those include American Family, Nationwide, Travelers, Progressive, Farmers Insurance, State Farm, GEICO, USAA, Liberty Mutual/Safeco, and Allstate.
More than 50 other insurers scored higher than the top 10 insurers.
Body shops were asked to evaluate how well each insurer’s “policies, attitude, and payment practices ensure quality repairs and customer service for motorists.”
North Carolina Farm Bureau (A+), Alfa Mutual (A), Chubb (A-), and Erie Insurance (A-) finished with the top grades among all insurers for the second year in a row. Many of the highest-graded insurers including Michigan Farm Bureau (B+), Acuity Insurance (B+), North Star Mutual (B+), and Mutual of Enumclaw (B+) don’t sell policies in all 50 states.
More than 1,100 individual body shops around the country each graded as many as 30 different insurance companies in their state.
People
From hippie to vice-president
Executive on her unexpected path in insurance
Berri Willis (pictured center) was a self-styled ‘free spirited hippie’ in her youth – and about as far removed from the insurance world as you could imagine. Armed with a degree in fashion, Willis thought she knew what she wanted out of life.
“I had no intention of sitting behind a desk and doing insurance,” she said. “I [thought] that’s definitely not my path.”
However, as the associate vice president and managing director at Burns & Wilcox told IB, it was a chance encounter that lured her into the market.
“I had come back from traveling and was in my hometown,” she said. “I ended up renting a home to a Burns & Wilcox associate. She was very strategic and wanted to negotiate the price of the rental – and I finally got her what she wanted. The next day, she came in and offered me a position at the firm.”
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