Research
March 2024 Labor Market Pulse | The Jacobson Group
We’re closing out the first quarter of 2024 on a positive note. Unemployment for the insurance carriers and related activities sector slightly dropped to 2% and industry employment continues to grow – reaching a new record high in February. Job openings for the larger finance and insurance industry are the highest they’ve been since September 2023, which hit a record of 509,000 open roles, according to revised numbers from the Bureau of Labor Statistics.
According to our Q1 2024 Insurance Labor Market Study, conducted in partnership with Aon plc, 52% of carriers are planning to add staff in 2024 and just 10% plan to decrease their staff sizes. While insurers are acting with more caution than we’ve seen in the past few years, the industry is continuing to grow. For more insights on what to expect this year, view our full results summary.
News
GM, LexisNexis face class action over telematics insurance data collection
Massive class action potential as Florida man sues over Liberty Mutual insurance rise
According to a NY Times report, last December Romeo Chicco faced rejection from seven insurance providers before finally securing a policy at nearly twice his former rate.
A recent legal filing seeking to establish a class action claims the giant jump in premiums was linked to his 2021 Cadillac XT6’s invasive data tracking. And, as reported in Insurance Business earlier this week, Chicco isn’t the only policyholder complaining to the Times.
Dubbed by some as “smartphones on wheels”, many modern vehicles are internet-connected and equipped with various sensors and cameras. These sensors can, in some cases send telematics data back to the manufacturer, and from there the data can be sold to carriers. This telematics market is dominated by US-based Progressive, Allstate, Liberty Mutual, Nationwide and State Farm.
At the end of 2022 there were 16.8 million telematics policies in the country – and growing at a CAGR of 11.7%, that number is predicted to reach almost 30 million by 2027.
Chicco claims that he had no idea that his car was telling anyone about his premium-increasing driving habits until learned from a Liberty Mutual representative that his insurance application was declined due to findings in his “LexisNexis report”
Matthew Sellers, Insurance Business
National Association of Insurance Commissioners: States Issue Property & Casualty Market Intelligence Data Call Covering Over 80% of U.S. Market
The National Association of Insurance Commissioners issued the following news release on March 8, 2024:
State insurance regulators monitor homeowners property insurance markets as part of their mission to protect consumers, hold insurers accountable, and ensure fair, competitive, and healthy insurance markets. Under their regulatory authority, state Departments of Insurance routinely collect data from insurance companies to better understand market dynamics. Today, state insurance regulators have united to issue a comprehensive, multi-state data call coordinated by the National Association of Insurance Commissioners (NAIC) to collect and analyze data covering more than 80% of the U.S. property insurance market by premium volume.
The Property & Casualty Market Intelligence Data Call (PCMI) will gather data from more than 400 property insurers operating locally and across the country to give state insurance regulators a clear sense of what is happening in their individual property markets and the nation overall.
State insurance regulators collaboratively developed the PCMI data call under the coordination of the NAIC's Property and Casualty Insurance (C) Committee, chaired by Alan McClain, Commissioner of the Arkansas Insurance Department.
Rising property insurance costs and coverage challenges underscore the importance of this collective effort. As regulators manage market uncertainty, the wide-ranging data call will provide deeper insights into property insurance market costs, coverages, and protection gaps amid the increasing frequency and severity of natural disasters, escalating reinsurance costs, and continued inflationary pressures.
AI in Insurance
Conning reveals surge in AI adoption within insurance industry -
According to the recent executive survey conducted by Conning Insurance Research on artificial intelligence (AI) adoption within the insurance industry, 77% of respondents indicated they are in some stage of incorporating AI into their operations.
Manu Mazumdar, Director and Head of Data Analytics, Insurance Technology and Retirement at Conning Insurance Research, highlights that this year’s figure represents a notable increase of 16 percentage points from 61% in 2023.
Scott Hawkins, Managing Director and Head of Insurance Research at Conning, comments on this significant rise in AI adoption, stating, “Insurers are adapting, developing, and piloting innovative AI applications in pursuit of greater efficiency to drive customer and distributor satisfaction.”
InsurTech/M&A/Finance💰/Collaboration
Exclusive: Vista Equity seeks to tap banks for Solera IPO: Reuters
Private equity firm Vista Equity Partners is seeking to hire investment banks for a U.S. initial public offering of Solera, a provider of software to the automotive and insurance industries, people familiar with the matter said on Wednesday.
Vista, which acquired Solera for $6.5 billion in 2016, is interviewing banks as it seeks to hire IPO underwriters, the sources said, requesting anonymity because the matter is confidential.
Nordic Capital Invests in Insurance Payment Platform One Inc
Nordic Capital is making a strategic investment in One Inc, a digital payments platform for the North American insurance industry.
Nordic Capital will join Great Hill Partners as an investor in One Inc, with the two investors having an equal stake to each other alongside an investment from One Inc’s current management team, the companies said in a Thursday (March 14) press release.
The investment is subject to customary regulatory approvals, according to the release.
“We continue to see exponential growth and excellent customer loyalty, underscoring the strength of our model and industry-leading payments network of more than 700,000 vendors,” One Inc CEO Ian Drysdale said in the release.
VIU BY HUB PARTNERS WITH MILE AUTO TO FUEL GROWTH OF INNOVATIVE INSURANCE SOLUTION FOR LOW MILEAGE DRIVERS
The partnership brings pay-per-mile auto insurance options to the VIU platform, scaling the growth of insurtech Mile Auto
VIU by HUB (VIU), an omnichannel insurance brokerage platform, today announced its partnership with Mile Auto, a pay-per-mile auto insurance company. The partnership brings an innovative solution to VIU enabling customers to access affordable car insurance based on how much they drive. The partnership also enables Mile Auto to leverage VIU as a digital omnichannel platform to improve customer acquisition costs and grow its customer base.
"VIU continues to deliver on its promise to provide differentiated, personalized and innovative solutions to our customers and partners while Mile Auto gains the opportunity to improve its customer experience and scale its business," said Bryan Davis, EVP and Head of VIU. "This partnership is a win-win for all parties involved."
Mile Auto uses computer vision and decision analytics to support pay-per-mile auto insurance options. With this coverage, drivers only pay for the miles they drive plus a low monthly base rate. Precision-driven premiums can lead to financial savings for those who drive less than 10,000 miles a year, such as college students, retirees or remote workers.
Earnix and Sollers Consulting Partner to Modernize Insurance Processes and Systems | Insurance Innovation Reporter
The partnership enables clients to harness advanced analytics, machine learning, and AI capabilities, empowering them to make data-driven decisions, improve pricing strategies, optimize product offerings, and manage risk more effectively.
Earnix (Tel Aviv/London), a provider cloud-based intelligent real-time, dynamic pricing and rating solutions for insurers and banks, and Sollers Consulting (Warsaw/Richmond, Va.) , an international operational advisory and software integrator for the financial sector, have announced a partnership delivering Earnix solutions to property/casualty insurers in the U.K., U.S., France, Benelux, Nordics, and DACH regions.
The partnership enables clients to harness advanced analytics, machine learning, and AI capabilities, empowering them to make data-driven decisions, improve pricing strategies, optimize product offerings, and manage risk more effectively, according to a joint announcement from the companies.
Sollers and Earnix assert that their new partnership will increase insurers’ profitability by providing a solution that speeds time-to-market, enables personalized customer experiences, and brings both IT components and business elements together in an all-in-one, governed end-to-end process.
Anthony R. O’Donnell, Executive Editor, Insurance Innovation Reporter
SquareDash: Property Insurance Restoration Payment Advance Company Raises Over $20 Million
SquareDash – a payment advance platform in the property insurance restoration industry – announced it raised over $20 million in total funding to accelerate growth.
FINTOP Capital led the funding round, and it builds on SquareDash’s previous equity raise in the middle of last year with participation from Hivers and Strivers, The PenFed Foundation, i2BF Global, The Hustle Fund, The Council, and other angel investors.
The company also closed a $15 million credit facility that can expand to $25 million as needed. This funding round will be used to expand the company’s payment advance and subscription services, hire more talent, and invest in sales and marketing.
Launched in 2022 by U.S. Navy veteran Matt Fruge after running a roofing company successfully for over ten years, SquareDash offers claim funding and a subscription service for managing the billing, payment, and collections process. This enables roofers and restorationists, especially those in the $2 million to $15 million revenue range, to overcome insurance claim challenges and get paid in the same day that the work is finished.
SquareDash was also selected for The PenFed Foundation Veteran Entrepreneur Program Fall 2022 Cohort. This program supports veteran and military spouse entrepreneurs in scaling their startups.
Empathy closes $47M for AI to help with the practical and emotional bereavement process
Death, as the famous saying goes, is one of the inevitable certainties of life.
But that doesn’t make coping with it any easier — not least because while loved ones are grieving, they must also handle a dizzying number of practical tasks, from organizing funerals through to settling finances for the deceased.
A startup called Empathy has built a platform to help navigate this tricky space, and now with some 40 million people using the platform it’s raised $47 million more in funding to grow.
The equity round, a Series B, is being led by new backer Index Ventures with several major insurance companies — MassMutual Ventures, MetLife, New York Life, Securian, and Sumitomo — participating as strategic investors. While the company initially launched with a more direct sales model, these days, it primarily works via a B2B2C approach, providing services via policies from employers or insurers, which together account for 99% of its business.
The funding will be used to continue building out its tools and to focus on a larger mission to “redefine bereavement care,” in the words of CEO Ron Gura, who co-founded the company with Yonatan Bergman.
Awards
Coterie Insurance Named Best Insurtech Company in Fintech Breakthrough Awards
Coterie Insurance, the insurtech MGA simplifying small business insurance, has been named the 2024 Best Insurtech Company by the Fintech Breakthrough Awards.
FinTech Breakthrough is an independent market intelligence organization that recognizes the top companies, technologies and products in the global FinTech market today.
“We’re honored to be named Best Insurtech Company as this recognition represents how far Coterie has come over the past five years in transforming small business insurance for everyone involved,” said David McFarland, CEO of Coterie Insurance. “Having our innovative, game-changing approach acknowledged and endorsed by the broader industry is a clear demonstration that Coterie is bringing real value to ongoing industry challenges with novel and exciting solutions.”
In 2023, Coterie was honored with the Insurtech Innovation Award in the FinTech Breakthrough Awards. Earlier this year, Purpose Jobs recognized Coterie by being named to their 2024 Best Places to Work list. Coterie provides access to instant small business insurance coverage for partners, including agents and brokers, through their innovative platform powered by data. By taking a pioneering approach to the entire quoting and binding process through automated underwriting, Coterie provides partners with a business insurance solution for a historically underserved market.
People
State Farm Announces New Leadership
State Farm President Jon Farney (right) has been selected as the company’s next Chief Executive Officer by the State Farm Mutual Board of Directors.
Farney will formally begin his role on June 1. The announcement was shared this morning by Chairman and retiring CEO Michael Tipsord (left).
“Jon and I have worked together for many years. I’ve seen how much he cares about State Farm, how much he cares about the people at State Farm, how he solves problems, and how focused he is on taking care of our customers,” said Tipsord at a meeting of State Farm leaders earlier today. He noted Farney’s key role in the company strategy in the last several years.
Farney joined State Farm in 1993 and has served in a variety of executive leadership roles including assistant vice president – securities products, assistant vice president – planning & analysis, vice president – financial operations and operations vice president – underwriting. He was named senior vice president, treasurer and chief financial officer in January 2016. He succeeded Michael Tipsord as president of State Farm Mutual Automobile Insurance Company on January 1, 2024. A native of Illinois, Farney earned his bachelor’s degree from Illinois State University and his MBA from the University of Michigan.
“It’s a privilege to follow Michael as CEO of this great company and lead an incredible team of more than 19,000 independent contractor agents and 65,000 employees who are committed every day to serving our customers,” said Farney. “We’ll push ourselves to continually improve so we’re positioned to help even more people manage the risks of everyday life, recover from the unexpected and realize their dreams.”
Tipsord focused on positioning the 102-year-old company to help more people in more ways for the long-term following his CEO appointment in 2015. Since then, State Farm has grown from more than 83 million policies to serving more than 94 million policies and accounts. The financial strength of the organization – necessary to help ensure the company keeps its promise to its customers – has expanded from $82.7 billion to more than $134 billion. State Farm remains the nation’s leading Auto and Home insurer.
Both Tipsord and Farney expressed to company leaders today the important role of the State Farm mission to help people. Farney emphasized the company’s long-held focus on the customer will carry forward, with an eye toward further enhancing digital capabilities and leveraging the unique talents of agents and employees throughout the country.
“With great minds, good hearts and wonderful people, there is truly no place like State Farm,” Tipsord told employees and agents earlier today. “I know the best days for this amazing organization are yet to come.”
Tipsord began his State Farm career in 1988. He was named vice chairman and chief financial officer in 2004, chief operating officer in 2011 and elected CEO and president in 2015. He was elected Chairman of the Board of State Farm Mutual Automobile Insurance Company in June 2016. Tipsord will continue to serve as Chairman. A graduate of Illinois Wesleyan University, Tipsord is a Certified Public Accountant and earned his juris doctor from the University of Illinois, where he is a member of the dean’s advisory board for the College of Law.