News
State Farm Underwriting Loss Climbs to $14B
When State Farm reported a $13 billion underwriting loss for 2022, it was the largest in the auto insurance giant’s history. A year later, and another record.
The underwriting loss figure climbed to $14 billion for 2023, with a nearly $5 billion underwriting loss for property lines outpacing almost $4 billion of improvement in State Farm’s auto results.
“In 2023, State Farm property and casualty insurance companies experienced growth in policies while also reporting underwriting losses due to continued elevated claims severity and significant catastrophe activity, for both the auto and homeowners insurance companies,” the company said in a media statement.
“While we improved overall auto lines profitability in 2023, our results remain below the level we expect and we’re taking a state-specific approach as we operate,” said Senior Vice President, Treasurer and Chief Financial Officer Mark Schwamberger, who also highlighted the responses of State Farm claims and operations team members, along with the State Farm independent contractor agents, to the widespread catastrophe losses that dented results.
House committee approves study of wildfire insurance coverage
A House committee overwhelmingly approved legislation Thursday that would launch a federal study of wildfire insurance coverage.
The House Financial Services Committee, in a 47-2 vote, advanced to the House floor a bill that would require the Government Accountability Office to assess wildfire risk; analyze the impact of wildfires on homeowner and commercial property policies – including premium increases and coverage cutbacks; survey state regulators’ responses; and outline challenges related to underwriting wildfire risk.
The committee delayed a vote scheduled on legislation that would place some restrictions on the Federal Insurance Office’s ability to gather data from insurers. The bill was one of several that was lopped off the agenda so that lawmakers would have time to get to the House floor to vote on a government-funding measure to avoid a partial shutdown.
The Wildfire Insurance Coverage Study Act was written by Rep. Maxine Waters, D-Calif. and ranking member of the committee. Her state is one that has been rocked by natural disasters over the last several years. She said that when insurers sharply raise premiums or stop offering wildfire coverage in certain communities, it can make homes unaffordable and hinder recovery efforts.
J.D. Power Sets Sights on European Expansion with Completion of Autovista Group Acquisition
Ed. Note: in related news "Thoma Bravo weighs $8 bln sale of J.D. Power, Bloomberg reports" 2/20/24 LInk
Integration of European Automotive Data and Analytics Provider Further Expands Industry-Leading Vehicle Valuation and Specification Capabilities
J.D. Power, a global leader in data analytics, today announced the completion of its acquisition of Autovista Group, a leading pan-European and Australian automotive data, analytics and industry insights provider. The acquisition, which was announced in September 2023, brings together Autovista Group’s comprehensive datasets, insights and industry expertise with J.D. Power market-leading predictive analytics and valuation and customer experience datasets.
“We are living at an historic moment in the automobile industry when future success will largely be determined by how well the industry adapts to massive changes in everything from new powertrains to the use of AI”
“Autovista Group is home to some of Europe and Australia’s most well-known brands in automobile valuation, repair estimation and predictive analytics, and they have been pioneering the use of data-driven insights since the early 1930s,” said Dave Habiger, president and CEO at J.D. Power. “Bringing the Autovista Group team into the J.D. Power family will help leverage our complementary strengths to develop even more powerful insights and forecasting solutions for our worldwide client base.”
Through its six leading brands—Autovista, Eurotax, Glass’s, Schwacke, Rødboka and EV Volumes —Autovista Group standardizes and categorizes hundreds of technical attributes for virtually every vehicle produced in their markets, providing clients with a 360-degree view of detailed vehicle data for use in valuations, forecasts and repair estimates. In addition, its robust analytic solutions and team of experienced analysts are relied upon by stakeholders throughout the automobile industry for detailed insights and benchmarks for vehicle values and ownership, repair and replacement costs.
Research
Workplace Stress
Work-related stress and worker burnout is a critical topic in today’s talent market as nearly every insurance organization across the nation competes to fill open positions.
But stress at work has reached epidemic proportions, according to the American Psychological Association, and showed little decline in 2023.
Recent findings from the APA, show that 77% of U.S. workers reported stress at work in the past month, with 57% reporting negative health effects as a result. The APA report, “Work in America Survey: Workplaces as Engines of Psychological Health & Wellbeing,” found that among workers overall, 33% said they intend to look for a new job at a different company or organization in the next year. Among those workers who said they are unsatisfied with the mental health and well-being support offered by their employer, that number rose to 57%.
While many industries are working to address workplace stress, there is a need for improvement by employers to create environments that allow for rest and relaxation, according to the survey’s researchers. The survey revealed that many workers are not getting the breaks from this stress that they both need and want. Only 35% reported that their employer offers a culture where breaks are encouraged. Some 40% reported that their employer offers a culture where time off is respected, and 29% reported that their employer offers a culture where managers encourage employees to take care of their mental health.
Ed, Note: Pictured, Alfred E. Neuman, fictitious mascot and cover boy of the American humor magazine Mad since 1954
Commentary/Opinion
Is "AI" headed down the same path as "insurtech"?
Artificial intelligence (AI) has grown to encompass a broad range of financial technology applications, and insurtechs billing their offerings as “AI-powered” must work harder to distinguish themselves in a crowded marketplace, an expert has warned.
Dr. Andrew Johnston (pictured), global head of insurtech at Gallagher Re, suggested that the label. “AI” is becoming increasingly redundant as the technology becomes inherent among insurtech offerings.
“Historically, I would say that AI is probably suffering the same fate as the label of ‘insurtech,’ in that it now is a very broad church,” he told Insurance Business.
“It applies to almost everything, and every modern technology that’s being built right now has an AI-type component. So, the term itself is arguably redundant because pretty much any new initiative, business, or capability coming into our industry will be technologically enabled
InsurTech/M&A/Finance💰/Collaboration
DigsFact Integrates with Verisk’s Claims Estimation Software
DigsFact’s AI and computer vision-based proprietary technology can accelerate the claims process, multiply the adjuster’s productivity and reduce expense by up to 90 percent.
DigsFact Inc (Crystal Lake, Ill.), a SaaS product designed to accelerate the estimation of property claims, repair and renovation projects, has announced a new integration with Verisk (Jersey City, N.J.), a global data analytics and technology provider. Adjusters using DigsFact can quickly initiate a DigsFact project from within Verisk’s XactAnalysis and Xactimate products, allowing adjusters and contractors to improve collaboration and shorten claims cycle times, enhancing the policyholder experience, according to a DigsFact statement.
DigsFact explains its value proposition by noting that, when a property claim is filed, a claims representative travels to the claims site to assess the damage and estimate the repair costs. Onsite activities, including evaluating the structure, collecting detailed measurements, itemizing materials, and documenting any damage or risks are time-consuming and costly, the vendor notes.
“Billions of dollars of work in the built-environment economy are held up by property assessments that require in-person visits, the DigsFact statement continues. “Delays can also be challenging for the policyholder, as they are waiting for the estimate to be ready and repair work to begin.”
Sapiens and DataCrest Forge Partnership to Elevate Underwriting Precision in P&C Sector
Sapiens International Corporation (NASDAQ: SPNS) (TASE: SPNS), a leading global provider of software solutions for the insurance industry, and DataCrest, a pioneer in innovative insurance solutions, today announced the formation of a strategic partnership to revolutionize the application process and drive premium growth for P&C insurers.
The partnership between Sapiens' market-leading solutions and DataCrest's AppEase platform will accelerate operational efficiencies for P&C insurers. The collaboration will enable DataCrest to better cater to its customers' needs and empower them to develop more leading digital experiences, to increase efficiency, revenue, and hit ratios. Sapiens' customers will reap many competitive advantages, including reduced sales cycles of about 80% by collecting apps data electronically, improved ease of business, more informed and faster decisions through analytics, removal of redundant data entry, and quicker quotes and indications.
"The collaboration between Sapiens and DataCrest promises a multitude of benefits for P&C insurers, including an advanced front-end solution designed to streamline applications/submission intake and boost efficiencies to improve underwriting decision making," said DataCrest's CEO Tom Young. "With DataCrest's expertise and Sapiens' cutting-edge solutions, this partnership aims to redefine industry standards by increasing the ease of doing business, driving premium growth, and lowering loss ratios."
Innovation
New tech overhauls ‘rigid, complex’ insurance, Zurich says
Telematics, parametric cover and usage-based products reimagine insurance and allow insurers to deliver simplicity, affordability and convenience, a Zurich digital expert says.
Traditional insurance models can be rigid and complex, and therefore limited in how they provide coverage, Head of Customer and Digital Asia-Pacific Roopa Malhotra tells insuranceNEWS.com.au.
"Product innovation lies not only in introducing new areas of coverage but also through concepts such as telematics, parametric and usage-based,” she said.
Zurich’s parametric offerings include weather index insurance for Indonesian coffee farmers, an earthquake solution and a flight delay benefit on travel insurance.
“These have been designed around the principle of leveraging technology and third-party data to fulfil our claims promise to our customers and remove any inconvenience they may face when filing an individual claim,” Ms Malhotra said.
She says Zurich invests heavily in technology across the insurance value chain, with a focus on artificial intelligence (AI), big data and cloud computing that streamlines processes and provides personalised, data-driven insights.
Many insurers are in the early stages of capitalising on such systems due to a lack of clarity around how to integrate with existing distribution channels.
“Imagine, for example, using AI-powered call centre capabilities to analyse voice chats and provide personalised recommendations to agents. If a call centre is not on the cloud, implementing these enhancements becomes a lengthy and costly process. What could take a few weeks on a cloud-based system ends up taking months, causing delays and increased expenses.
Recommended Events
CLM Panel Explores Tech-Driven Disruption in Litigation Management | CLM24, scheduled for April 2 to 4 in San Francisco.
Technology is disrupting the claims and litigation management environment in exciting ways.
Technology has driven change throughout history, from Ford’s Model T to Musk’s Model S. And progress often follows innovation as new ideas emerge and new opportunities are realized.
The legal and claims management field is no different, as innovative technology is reshaping the industry in exciting ways.
A session at the upcoming CLM24 conference in San Francisco, entitled “Claiming the Future: LegalTech and How to Be a Disruptor in Litigation Management,” will feature experts from different parts of the insurance life cycle to provide a well-rounded view of how technology is disrupting litigation management — and what insurance and legal professionals need to know about it.
Bridgette Ferraro, CEO of iCopyLegal; Travis Meyer, partner at Waldon Adelman Castilla Hiestand & Prout; and Nicholas Webber, assistant vice president, litigation management at AmTrust, will lead attendees through this trending topic.
Technology impacts every step of the insurance life cycle, including claims and litigation management, and this panel will attempt to answer questions about the current status of LegalTech and what the future state may look like.
Registration is open now for CLM24, scheduled for April 2 to 4 in San Francisco.
Canada
Summit discusses a new national office on auto theft
Property and casualty insurance industry professionals and a car manufacturing industry representative are endorsing the idea of establishing a national auto theft office, an idea floated at Ottawa’s National Summit on Combatting Auto Theft earlier this month.
“Criminals have really capitalized on the lack of coordination [between various governments, police, and industries],” Karin Ots, senior vice president of regulatory and government relations at Aviva Canada, said during a Canadian Underwriter webinar Wednesday.
“They know that police forces, perhaps historically, haven’t talked to each other; that they haven’t talked to [Canada Border Services Agency]; that we don’t share information; that we don’t track cars and license plates and VIN numbers the way we should.”
All of this requires a more centralized approach, panellists agreed during CU’s webinar, How to stop auto theft. And one such approach would include a national office dedicated to the task of stopping auto theft.
“There’s a real opportunity to better join up information-sharing,” said Ots, and “make sure that when cars are stolen, or when cars are exported, that it’s recorded as such in the VIN database so that we don’t keep insuring the cars that have already left the country.
SPECIAL EVENTS THIS WEEK: InsurTech Israel USA Delegation Tour
InsurTech Chicago's First Pitch Night w/1871 & InsurTech Israel Tickets, 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.
Date and time: Monday, March 4 · 4 - 8pm CST Location: 1871 Global Innovation Hub. 222 West Merchandise Mart Plaza #1212 Chicago, IL 60654
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, InsurTech Israel, and the Consulate General of Israel to the Midwest.
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.
Discover the Future of Insurtech coming from Israel | Columbus, OH | Tue, Mar 5, 2024 at 3:30 PM
Discover the Future of Insurtech coming from Israel : Join Us in Columbus, Ohio on March 5
MEET OUR OWN ALAN DEMERS, CO-CURATOR OF THE 'CONNECTED' NEWSLETTER AND PODCAST)
Date and time - Tuesday, March 5 · 3:30 - 5:45pm EST
Venue: The Horizon Suite (rooftop of Huntington Center)
Location - Horizon Suite, Huntington Center 36th Floor, 41 S. High St., Floor 36 Columbus, OH United States ##200 Columbus, OH 43215
Embark on a journey into the cutting-edge world of insurtech as we welcome the top Israeli startups to Columbus. Hosted by One Columbus, JobsOhio, InsurTech Ohio, and Insurtech Israel, this exclusive social event promises an evening filled with innovation, networking, and insightful discussions.
Get ready to connect with the minds behind revolutionary technologies shaping the insurance landscape. From streamlined processes to game-changing solutions, these startups are paving the way for the future of insurance.
Meet the trailblazing entrepreneurs from renowned startups including EasySend, OpenLegacy, GEOX , Pecan, Amplifair, Ledgertech , Jungo, Urbanico and Multyix
Calling all insurance professionals: Don't miss this golden opportunity to immerse yourself in the world of insurtech. Whether you're already involved or simply intrigued by the possibilities, this event is tailor-made for you
Embark on a journey into the cutting-edge world of insurtech as we welcome the top Israeli startups to Columbus. Hosted by One Columbus, JobsOhio, InsurTech Ohio, and Insurtech Israel, this exclusive social event promises an evening filled with innovation, networking, and insightful discussions.
Israeli Insurtech Delegation comes to Iowa | Thursday, March 7 | 3:00 PM
BrokerTech Ventures and Holmes Murphy are thrilled to be hosting the Israeli Insurtech delegation at Holmes Murphy’s headquarters (2727 Grand Prairie Parkway, Waukee IA) on Thursday, March 7 from 3 to 5 p.m.