Insurers and collision industry need to work together to protect data  February 28th 2024

Insurers and collision industry need to work together to protect data, article says

Ed. Note: Thanks to Teresa Moss and Repairer Driven News for spotlighting this important issue which has major implications for all of us in the auto physical damage claims and collision repair ecosystem.

The collision repair industry and auto insurance carriers need to take further steps to protect consumer data as technology and privacy crimes advance, according to an article recently published by Insurance Thought Leadership written by Stephen Applebaum, Insurance Solutions Group managing partner, and Alan Demers, InsurTech Consulting president.

“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,” the article says. “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.”

COMPLETE ARTICE HERE

Teresa Moss, Repairer Driven News

Grappling with generational gaps & hitting back at nuclear verdicts

Here is some of what you may have missed during Day One of the Complex Claims & Litigation Forum in Las Vegas.

It was only fitting that the 2024 Complex Claims & Litigation Forum kicked off on Mon., Feb. 26 in Las Vegas with a robust discussion of many of the challenging issues facing today’s insurers and litigators.

Carey Bonds, head of U.S. claims for Lloyd’s, addressed some of those issues during a keynote speech that launched the conference at the Green Valley Ranch Resort.

Insurance customer needs adapt from one generation to the next, as does the market itself, said Carey Bond, head of U.S. Claims for Lloyd’s, during the opening keynote at the 2024 Complex Claims & Litigation Forum in Las Vegas.

A retired U.S. Army lieutenant colonel who has more than two decades of experience in claims management, Bonds encouraged attendees to work on closing gaps that are prevalent in the industry and to do so by challenging conventional norms.

The four specific gaps that Bonds said risk evaluators and defense counsel must bridge are the increasing reliance on cyber technology and the burgeoning field of artificial intelligence, regulatory compliance, climate change and the change in customer needs.

Buffett Says Berkshire ‘Built to Last’

Warren Buffett on Saturday moved to reassure investors that his conglomerate Berkshire Hathaway would serve them well over the long term, even as he mourned the recent passing of his longtime second-in-command Charlie Munger.

In his widely-read annual letter to Berkshire shareholders Buffett said his more than $900 billion conglomerate has become a fortress that could withstand even an unprecedented financial disaster.

“Berkshire is built to last,” Buffett wrote.

Still, Buffett tempered expectations for Berkshire’s stock price, saying his Omaha, Nebraska-based company “should do a bit better” than the average American corporation, but that its huge size left “no possibility of eye-popping performance.”

“There remain only a handful of companies in this country capable of truly moving the needle at Berkshire, and they have been endlessly picked over by us and by others,” Buffett wrote.

Insurance is easy

Why investors may be heading towards a financial catastrophe

As the best hedge fund strategy of 2023 becomes a magnet for mainstream investors, the risk models it relies on are getting a lot tougher to crack.

The strategy in question is tied to insurance-linked securities, which are dominated by catastrophe bonds (often dubbed cat bonds). In 2023, no other asset class produced a better-performing bet for hedge funds, with firms including Fermat Capital Management and *Tenax Capital booking their biggest-ever returns.

Cat bonds have been around for more than 25 years and are used by the insurance industry to shield itself from losses too big to cover. That risk is instead transferred to investors who lose money if a pre-defined catastrophe hits, and rake in potentially huge returns if it doesn’t.

But calculating catastrophic risk is much more complex than it used to be. That’s because there’s a growing concentration of property in areas that are prone to increasingly frequent storms, fires, and floods. Taken individually, each event is less intense than a major earthquake or hurricane. In aggregate, however, such losses can be a lot bigger, and that has major implications for the growing numbers of investors now adding exposure to cat bonds.

Traditionally, cat bonds have been used to shield insurers from the kinds of losses associated with once-in-a-generation natural disasters. But last year, those primary perils, as they’re known, accounted for only 14% of global losses, according to broker Aon Plc. Meanwhile, a category known as secondary perils “outpaced their cumulative costs in the 21st century by a large margin.”

by Gautam Naik and Sheryl Tian Tong Lee

Florida: Reforms encourage carriers, drive property insurance market improvement

The legislative reforms aimed at improving the property insurance market in Florida are increasingly seen as having a positive effect, with carriers increasing their appetite for writing in the state and analysts suggesting the benefits of the reforms could be significant over time.

As we reported earlier this year, data released on homeowners’ property insurance lawsuits had already showed a decline in litigation.

The CEO of insurer Universal had said last year that he felt the situation was improving thanks to the reforms, which he reiterated again in the firm’s latest earnings call saying that property insurance claims trends are definitely looking better in Florida.

At the same time, while the Florida property insurance market is seen as improving and recent legislative reforms are expected to ultimately drive more capital to support reinsurance for the Florida marketplace, some in the insurance-linked securities (ILS) industry have rightly highlighted that there is still likely to be a premium charged for capacity deployed to the state.

That’s a given, until we really see the full effects of the already enacted legislative reforms, as well as any additional property insurance or reinsurance measures taken in the still ongoing Florida session this year.

But, the underlying sentiment seems to be that Florida’s marketplace for insurance is getting healthier all the time and this is now even encouraging some carriers to write more business there again.

Steve Evans owns and operates Artemis