News
Could California be the next state to face an insurance crisis?
In response to skyrocketing condo-insurance premiums in California, several state legislators recently penned a letter encouraging Insurance Commissioner Ricardo Lara to take action in support of residents struggling to find affordable insurance.
“As you know all too well, the homeowners’ insurance market in California is experiencing severe disruption due to increased climate-related risks, particularly wildfires,” reads the letter dated Feb. 6, 2023, and signed by 18 state senators.
"Homeowners association (HOA) communities and residents of condominium developments in wildland-urban interface (WUI) areas of the state are facing particular difficulty accessing coverage because of the high concentration of risk.”
Condominium owners in California are experiencing increased difficulty securing coverage with some carriers refusing to renew policies while others drastically increase premiums and lower coverage limits.
LORs (Length of Rental) continue to increase due to supply chain and parts issues, tech shortage and repair backlogs
Enterprise reports that length of rental (LOR) increased to 18.7 days during Q4 2022 and was nearly double compared to pre-pandemic April 2019 when LOR was 11.8 days.
“While Q4 2022 continued with the return of historical trending, the results themselves continue to be exacerbated by supply chain disruptions, parts delays, collision repair backlogs, and technician shortages,” Enterprise said. “With the complexity of vehicle repairs only increasing, for both internal combustion engine (ICE) and battery electric vehicles (BEV) models, the entire industry must play a part in ensuring all collision-related businesses are aligned — not just for procedural solutions, but to ensure our mutual customers receive safe and proper repairs, an excellent experience and peace of mind.”
LOR in Q4 2022 was up one half-day over Q3 2022 and 1.7 days compared to Q4 2021.
Enterprise and CRASH Network newsletter Editor John Yoswick attributed the increase to parts issues, technician staffing, harder-hit vehicles, and more complex repairs.
“The overall trends in LOR match up with what we saw happen with the backlog of work that repairers reported in our Q4 survey,” he said. “While the national average backlog remained at 4.8 weeks, unchanged from the record high in Q3, there was another jump in the percentage of shops with the largest backlogs. A record 25% of shops were reporting eight weeks or more of work scheduled. For comparison, in pre-pandemic Q4 2019, just 6.4% of shops had backlogs of even just four weeks or more, and the national average was under two weeks.
Mitchell Publishes Electric Vehicle Collision Insights Report
New report highlights the electric vehicle (EV) trends impacting auto insurers and collision repairers
Mitchell, an Enlyte company and leading technology and information provider for the Property & Casualty (P&C) claims and Collision Repair industries, today announced the availability of its latest trends publication: Plugged-In: EV Collision Insights. The new quarterly report provides auto insurance and collision repair executives with up-to-date information on electric vehicle claims and market data.
In 2022, EV sales hit a tipping point, representing 5.6% of all new vehicles sold according to Kelley Blue Book. As consumer adoption increases, vehicle manufacturers including Audi, GM and Volvo are pledging to go all-electric in the future—putting more of these automobiles on the road and, potentially, in a collision repair shop.
"EVs introduce some unique challenges to both insurers and repairers,” said Ryan Mandell, director of claims performance at Mitchell. “Their more complex, interconnected electronic systems and reliance on lightweight materials can complicate the repair process and increase claims costs. With the release of our new report, we hope to provide the industry with the information it needs to prepare for this growing segment of the car parc and the impact it will have on auto insurance claims.”
Driver data, telematics distracted driving auto insurance
Auto insurers are merging innovation and technology in a way that will enable them to finally combat distracted driving in 2023. So why aren't we talking about it more?
Probably because insurers are entering a new year filled with more external business challenges than they've faced in a decade. Inflation and a looming recession are threatening business as usual, but that's hardly unique to the insurance industry — no business is safe from those threats right now. Specific challenges in the auto industry — scant skilled labor, chip shortages and climbing repair prices — compound an already difficult economic landscape for 2023.
Although they're serious, the ramifications of these challenges stop at the bottom line. Distracted driving, on the other hand, literally threatens the lives of customers. The pandemic did not make us better drivers — in fact, traffic fatalities are up in 2022, and hallmark behaviors of distracted driving like hard braking and speeding have also increased.
Henry Kowal, Director, Outbound Product Management, Insurance Solutions, Arity (an Allstate Company)
Adapting to Uncertainty: Commercial Lines Insurers are Approaching Strategic Initiatives Differently
If you were to ask us to describe the transformational activity of commercial lines insurers in the past few years, acceleration would be the first word to come to mind. But in 2023, another word may be more accurate – adapting. Economic pressures, such as inflation, are driving commercial lines insurers to rethink their strategic initiatives and adapt to new priorities.
Consider the results from a new SMA survey that shows that 12% of commercial lines insurer executives say their businesses are just in sustaining or surviving mode this year following a challenging 2022. The silver lining, however, is that insurers are inching back toward more aggressive strategies, with 30% indicating they are transforming. Although less aggressive than pre-pandemic levels, progress is underway.
These findings and more market insights are featured in SMA’s new research report, "2023 Strategic Initiatives: P&C Commercial Lines.” The report includes the results from a survey of insurer executives about their strategic plans in fifteen initiatives (seven traditional and seven transformational), as well as the biggest drivers for technology investments this year. When analyzing the research from two lenses –trends in small commercial and mid/large commercial – SMA uncovered several major themes that define how commercial lines insurers are approaching strategic initiatives today.
Mark Breading, SMA
InsurTech/M&A/Finance/Collaboration
Four Trending Priorities For Insurtechs In 2023
Over the last few years, new technologies have become more available and widely used by insurance companies. Many have tapped artificial intelligence (AI) and machine learning (ML) to create a seamless customer experience and leveraged embedded solutions to serve customers through the channels and partners they trust. In 2023, companies will face new and greater challenges, including a difficult funding landscape, record inflation and potentially a recession impacting customers and businesses. With this in mind, insurtechs will need to demonstrate their longevity in the market by prioritizing technology and profitability and continuing to deliver value to customers.
Though we are entering yet another year of uncertainty, insurtechs can capitalize on uncertain market conditions by investing in the right areas: technology, a truly embedded customer experience for agents and customers achieved through digital solutions, and more sustainable financial practices
Global M&A by the Numbers: 2022 in Review
In 2022, global M&A struggled to keep pace with a record-setting 2021 and saw aggregate deal values down 37% year-over-year. Deal volumes saw a return to pre-pandemic levels, nearly on par with 2019. Macro environment challenges hindered aggregate deal values, notably in H2 with elevated inflation and the rising rate environment impacting deal financing. Cross-border M&A experienced a notable downturn. Examine the year's M&A activity across sectors and regions, alongside features on cross-border and tech deals.
What's the outlook for M&A in insurance services?
M&A continues to be an effective way for businesses in the insurance sector to scale, offering companies the opportunity to expand service lines, enter new markets, adjacencies and geographies, and acquire top talent, often at a much quicker pace than organic growth.
Yet, as market conditions (hardening market, inflationary pressure and interest rate volatility) become increasingly challenging, what’s the outlook for the sector? What will drive the pace of M&A activity? And how can those pursuing transactions ensure success in the current climate?
Root Insurance Extends Relationship with CCC to Digitize First-Party Casualty
Expanded relationship enables Root Insurance to connect APD claims data and insights to casualty claims processing, driving forward their vision for straight-through processing
CCC Intelligent Solutions Inc. (CCC), a leading SaaS platform powering the P&C insurance economy, today announced Root Insurance will extend the use of CCC technology to include its first-party casualty solution. With the addition of CCC® First-Party Casualty, Root can now manage auto physical damage and first- and third-party casualty claims through a single digital workflow, powered by CCC.
The CCC First-Party Casualty solution digitizes bill intake, review, and reimbursement recommendations. Uniquely, it leverages accident data and insights to help insurers digitally review medical bills for accuracy and appropriateness of charges and treatments.
“As a digital-first insurer, it is essential for Root to leverage data and technology to inform decisions and deliver seamless experiences," said Mark LeMaster, chief claims and customer service officer for Root. "By working with CCC we can do both across the life of a claim, spanning auto physical damage, first- and third-party casualty and subrogation claims. CCC's network, technology, and AI are coming together in a way that will enable us to deliver on our policyholders’ expectations for straight-through claims experiences."
CCC Casualty includes both first- and third-party solutions for insurers. CCC’s First-Party Casualty solution applies a configurable rules engine to process claims data quickly and segment payment-ready bills from those that require manual review. CCC modernizes existing chaotic, paper-burdened systems with a comprehensive, configurable experience to help insurers make timely, consistent payments across bill types. Analytics dashboards provide access to industry trends and benchmarks. CCC’s Third-Party Casualty solution applies AI and biomechanical analysis to injury causation and bill review, increasing accuracy and reducing time, labor and cost associated with the third-party casualty claims process.
“We are excited to continue to support Root's vision for smart, digital claims management," said Mike Silva, chief commercial and customer success officer, CCC. "Connecting the auto-physical damage and casualty claims processes will help Root gain greater insights to achieve better claims efficiency and better outcomes."
Goose, the Insurance Super-App, Closes $4 Million Series A Funding Round
Goose Insurance Services announces it closed a $4 million Series A funding round to accelerate growth of its insurance super app.
Today, Goose Insurance Services announced it closed a $4 million Series A funding round led by Axis Insurance Managers, with participation from Impression Ventures, Real Ventures, and Manchester Story. The Vancouver-based company will use the funding to accelerate the adoption of its consumer-focused insurance super app in Canada and the U.S. through education and awareness initiatives.
“We’re on a mission to make insurance products instantly accessible to the 200 million underserved consumers through our self-serve insurance super app”
Goose has experienced rapid adoption and growth in the past year, doubling its membership base and premiums. Goose members can purchase over 19 different insurance policies across 30 states in the U.S. and 8 provinces in Canada including travel, renters, pet, critical illness, and up to 1 million of term life insurance, all within minutes from the Goose super app.
WeSure Digital Insurance launches in US - FinTech Global
WeSure is on a mission to transform the global insurance industry by leveraging its multi-line, multi-distribution technology ecosystem to offer a wide range of digital insurance products and services that are tailored to the needs of today’s digital customer.
The company leverages Data-Driven processes for superior and more accurate pricing and underwriting, transforming traditional insurance products and models into easy to understand, intuitive, transparent and simple offerings that can be purchased and managed easily and independently by retail agents, wholesalers and customers On-line through innovative and flexible distribution platforms.
The offering, which kicks off with Business Owners Policy (BOP) packaged Property & Liability insurance product in the State of Ohio, will expand to additional US States and introduce additional products over the course of 2023.
Events
Podcast: The Future of Insurance Personalization with Bryan Falchuk - Conversations on the Creek
Listen to this episode from Conversations on the Creek on Spotify. On this episode of Conversations on the Creek, Rob Savitsky and Mathew Stordy chat with Bryan Falchuk about the future of insurance personalization.
As the President and CEO of the Property and Liability Resource Bureau (PLRB), and also an insurance & insurtech advisor and thought leader at Insurance Evolution Partners, Bryan had lot to say on this topic!
We kick off the show by getting Bryan’s take on what “personalized customer experiences” means to him. From there, we ask Bryan for his perspective on the industry’s adoption of text messaging (SMS) and the varying levels of sophistication in its use within the claims process for improving customer experience. As the episode progresses, the conversation goes in several different directions: we chat about the pros and cons of using third-party data for personalization, use cases for leveraging AI/ML to provide more tailored and relevant experiences, and the state of usage-based insurance (UBI) and telematics for personalizing auto insurance.
Reuters Events: Insurance AI and Innovative Tech USA 2023 (Chicago, April 12-13)
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