Commentary/Opinion
How to Optimize Insurance Claims Management
As the insurance industry ushers in the Insurtech 2.0 era, carriers must build an agile business landscape rooted in innovation.
Inefficient data collection processes often impede the smooth handling of insurance claims, resulting in delays and inaccuracies that can frustrate both insurance companies and policyholders. The urgency to streamline these processes and enhance efficiency has never been more pressing.
As an insurance adjuster, you understand the importance of accurate and timely information in assessing and resolving claims effectively. But traditional methods can no longer keep up with the demands of the modern insurance landscape.
Your claims management can be significantly streamlined by leveraging advanced technology solutions, such as automated data capture tools and secure cloud-based platforms.
But navigating the complexities of claims management requires a keen understanding of the challenges that often arise. Let's delve into the key hurdles faced within the industry.
Michael Vervena is the vice president of sales and business development at Planitar.
New fuel for the adoption of self-service insurance solutions
As the insurance industry ushers in the Insurtech 2.0 era, carriers must build an agile business landscape rooted in innovation.
The evolving trend challenges insurance companies to maximize the benefits of digital tools while maintaining personal engagement with customers at critical moments. From the perspective of insurance agents, digital tools also support their workflows and augment their capabilities to build improved customer experiences.
As the industry ushers in the era of Insurtech 2.0 — a journey propelled by digital experiences — insurers can address customers’ expectations by building a robust digital system, leveraging cutting-edge capabilities from ecosystem partners, and optimizing their distribution channels to better serve customers.
Invest in digital platforms
Incorporating digital platforms into insurers’ operations allows customers to purchase, renew and manage their policies online, resulting in greater accessibility and convenience. This is the experience that the millennial and Gen Z demographics are demanding from insurers; it’s simplified, seamless and user-friendly. With 95% owning mobile devices, Gen Z are digital natives, and their tech-savviness reflects the way they engage with insurers or purchase policies.
Nick Lien is senior vice president of Product and Experience at Duck Creek Technologies
Small Business Market: Rising Costs, Hard Market Remain but Hope for New Opportunities Holds
There are reasons to be optimistic about the small business insurance market. New businesses are opening their doors every day. Small business start-ups are booming with record-breaking new business applications reported in 2023.
While the rising cost of insurance for small businesses is pushing entrepreneurs to retain more risk and reevaluate their insurance partners, the surplus lines market is helping to fill some gaps.
Small businesses themselves remain bullish on 2024, despite high inflation, high interest rates, worker shortages, and higher costs to insure their operations.
The high percentage of underinsured small enterprises also presents opportunities. In terms of policy counts, small business is still big business.
Small business insurance specialists share the overall optimism for the sector, although they are having to work harder and smarter to serve the sector and they face new challenges every day.
Today’s challenges require more attention from small business insurance experts, says Yvette Prichard, president of small business, Heffernan Insurance Brokers, located in Walnut Creek, California.
“We are definitely seeing a lot of hands-on (attention) needed for renewals,” she said. “Clients are angry, they’re frustrated. Some small business owners are not just merely facing higher premiums at renewal, but many are also facing non-renewals.”
Andrea Wells is a veteran insurance editor and Editor-in-Chief of Insurance Journal Magazine
Financial Results
Hippo ends 2023 with $273 million loss
Hippo has ended 2023 with a $273 million net loss, down 18% compared to 2022.
The company’s Services segment, which includes the consumer insurance agency and First Connect, reached $459.7 million in premiums in 2023, a 28% increase compared to 2022. Revenue was $44.3 million, a 20% increase from 2022, and adjusted operating loss stood at $37.6 million, a decrease of 23% compared to 2022.
The company’s Insurance-as-a-Service segment, which is comprised of the Spinnaker fronting business, had total generated premium of $513.9 million, an increase of 84% from 2022. Revenue was $70.7 million, an increase of 91% over the prior year period. Adjusted operating income was $18.3 million, an increase of 239% compared to 2022.
The company’s home insurance program had total premiums of $360.5 million, a decrease of 2% compared to 2022. Revenue was $102.1 million, an increase of 60% from 2022. The increase in revenue was due primarily to higher earned premiums, partially offset by a decrease in commission income, net, reflecting changes in Hippo’s 2023 reinsurance treaties, resulting in higher premium retention, and achieving planned premium rate increases. Adjusted operating loss was $180.3 million, an increase of 11% compared to 2022.
Overall, the three Hippo segments generated $1.13 billion in premiums in 2023 (including intersegment eliminations).
Reciprocals managed by Kin publish 2023 results
Kin Interinsurance Network reported $333.7 million in written premiums.
Kin Interinsurance Network and Kin Interinsurance Nexus Exchange, the reciprocals managed by Kin Insurance, have published their financial results for 2023.
Kin Interinsurance Network, which primarily writes in Florida, reported $333.7 million in written premiums in 2023, a 49% increase compared to 2022. The reciprocal recorded a net underwriting loss of $64.8 million, a 9% increase compared to 2022. Last year, a Kin source pointed out that the income statement excludes a 10% mandatory surplus contribution made by subscribers since technically it’s a contribution of capital, not premium. In 2023, reciprocal subscribers contributed $32.5 million.
Based on our analysis, combined ratio was 263% for the year, an improvement of 14 percentage points compared to 2022.
Kin Interinsurance Nexus Exchange, which writes in AL. AZ, MS, SC, and VA, reported $7 million in written premiums. The reciprocal had no meaningful operations in 2022.
Net underwriting loss stood at $2.2 million and combined ratio was 231%.
Greenlight Re publishes Q4, full year financial results
Greenlight Capital Re has disclosed its financial performance for the fourth quarter and the full year ending December 31, 2023, revealing its achievements and strategic movements.
In the fourth quarter of 2023, Greenlight Re reported gross premiums written of $112.3 million, marking an 11.8% decrease from the $127.4 million recorded in the same quarter of the previous year. This decline was attributed to timing-related factors, including adjustments based on revised premium estimates and updated reports from cedents.
Despite this, the company saw a 23.4% increase in earned premiums, reaching $137.4 million, thanks to the ongoing maturation of premiums written over the year.
Branch Insurance Exchange reports 2023 results
Branch Insurance Exchange, the reciprocal managed by insurance startup Branch, has ended 2023 with $158 million in written premiums, a 26% increase compared to 2022.
The reciprocal reported a net underwriting loss of $85.5 million, a significant increase compared to the $16.8 million loss in 2022. Loss ratio (losses + LAE) was 293%, compared to 164% in 2022. Combined ratio for the year was 347.8%, compared to 276% in 2022.
55% of the reciprocal’s written premiums originated from Texas in 2023, compared to 64% in 2022. We recently reported that Branch opened up agency appointments in 13 states and Texas is not one of them.
Research
Thirty-three Percent of Households with Insurance Would Switch Providers to Acquire Smart Home Devices
Parks Associates' research study, Insurance Opportunities in the Smart Home, finds that one-third of US internet households with homeowner's/renter's insurance would switch providers to acquire smart home devices. The study of 8,000 US internet households investigates consumer preferences for IoT devices that can impact insurance premiums or claims and evaluates the opportunity for IoT growth through the insurance channel.
With insurance costs rising nationwide, homeowners and insurers are both looking for solutions to reduce premiums, claims, and payouts. Smart home devices can detect and prevent costly damages, particularly rated to water and faulty wiring. Water-related damage is by far the most common home damage, with 26% of US households reporting this kind of damage. According to the Insurance Information Institute, the average cost of water damage/leaks is $9,633, while the average for flood/weather-related damage is $8,625.
"Insurance is a highly competitive industry, with numerous companies offering similar products," said Jennifer Kent, VP, Research, Parks Associates. "Customers often have multiple options to choose from, making it easier for them to switch to a different insurer. Smart home devices can lure customers from their existing insurance providers and attract customers who are new to the home insurance category."
Jewelers Mutual® Unpacks New Insights from Travel Study
Jewelers Mutual® Group, the insurer dedicated to protecting jewelry and jewelry businesses for over a century, announced the results of its latest study, shedding light on the habits and challenges of travelers when it comes to safeguarding their jewelry while traveling.
The connection between consumers and their jewelry remains strong, as nearly all survey respondents admitted to bringing their treasured pieces with them while traveling. This highlights the importance of implementing effective safety measures to protect these valuables.
The takeaways from the study highlight key insights about consumers' understanding of the role jewelry insurance plays during their travels:
Travel Planning Calls for Jewelry Insurance: Approximately 40% of surveyed travelers opt to insure the jewelry they wear while traveling. Surprisingly, almost half of these individuals rely on their homeowners' policies for coverage, which typically have lower coverage limits for jewelry.
Safety Priorities: Insured travelers shared a preference for secure options such as hotel safes and dedicated travel cases. Conversely, those without insurance tend to keep their jewelry close by during their travels.
Generational Trends: Younger adults are opting for specialized jewelry insurance, recognizing the unique advantages it offers in safeguarding their precious possessions beyond traditional homeowners or renters policies.
The Sting of Loss: The study found that 35% of consumers have experienced the heartbreak of losing jewelry while traveling, with hotel rooms emerging as the most common location for such misfortunes. A staggering 87% of respondents admitted to traveling with their engagement rings, emphasizing the need for heightened loss prevention awareness and protective safety measures.
Insurance Coverage Uncertainty: In perhaps the most startling revelation, nearly half of travelers attested they were uncertain whether their insurance policies provide adequate coverage while traveling abroad. Jewelers Mutual emphasizes the importance of securing specialized jewelry insurance that offers comprehensive worldwide coverage while traveling.
InsurTech/M&A/Finance💰/Collaboration
Pattern Insurance partners with Upper Hand
Embedded insurance startup Pattern Insurance and sports management software Upper Hand are announcing a new partnership to provide parents and athletes access to accident and registration cancellation insurance.
The Upper Hand platform serves “millions of athletes” and thousands of sports organizations, and provides a suite of tools such as managing memberships, staff and facility rescheduling, retail, video analysis and registrations.
The embedded offering will allow parents to add coverage which will reimburse them for non-refundable registration fees while registering their child in for a team, tournament, club, or activity. The accident coverage provides up to $5,000 in the event of a covered illness or injury.
The underwriter is Berkley Accident and Health.
Inigo, Samsara launch data-driven product to revolutionise fleet insurance
Inigo Limited (Inigo), a specialist insurance company, has recently announced its partnership with Samsara, an Industrial Internet of Things (IoT) firm. Together, they aim to revolutionise insurance solutions for US companies with large automotive fleets.
Inigo plans to utilise Samsara’s telematics data to develop a new type of insurance product tailored specifically for the automobile industry. This product will set competitive prices based on individual driving data and prioritise safety metrics to better understand risk.
By integrating telematics data with advanced modelling and risk management techniques, Inigo hopes to choose risks more effectively and offer personalised pricing.
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People
Heather Masterson, President, CEO, Travelers Canada
Heather Masterson’s journey into property and casualty insurance began in the heart of St. John’s, Newfoundland, when she was inspired at an early age by her father’s dedication to the industry and his passion for being an insurance broker.
Her father’s influence and mentorship shaped her understanding and recognition of the critical role insurance plays in people’s lives, “from safeguarding that which matters most to people, to being there to support and take care of our customers when the unimaginable happens,” she says.
Today, Masterson says she’s proud to be a part of the insurance industry. She’s also honoured to be a CEO and lead 1,400 colleagues across Travelers Canada.
“I especially appreciate the incredible mentors and advisors who have shared their valuable time and insights, helped groom and prepare me for leadership and provided invaluable feedback along the way,” she says. “Surrounding yourself with people who support growth and development at every stage in your career has never been more important when you consider the transformation our industry is going through.”
In her roles as both CEO and chairwoman of the Insurance Bureau of Canada, Masterson says she feels privileged to contribute diverse ideas and perspectives garnered from her varied experiences. She has worked in the brokerage, insurer and MGA business segments, and has been involved in various other trade associations and volunteerism throughout her career.