News
New York AG "takes exception" to Trump's bond in fraud case
"There are serious questions about if this bond was properly posted," expert says
The $175 million surety bond posted by former president Donald Trump to appeal his fraud judgment is missing key information usually included in such bonds, according to the New York attorney general.
The bond, provided by Knight Specialty Insurance Company, was posted to pause the enforcement of the approximately $464 million fraud judgment handed down against Trump while his appeal is pending. The former president was originally required to post a bond for the entire judgment, but an appeals court reduced the amount after numerous insurers refused to provide a bond that large.
However, the surety bond provided by Knight Specialty is missing information generally included in such bonds, according to a report by CBS News. Among the missing information is a financial statement from Knight Specialty, a certificate of qualification from the New York Department of Financial Services, and information related to power of attorney for the bond provider.
New York Attorney General Letitia James filed paperwork with the court Thursday saying that her office “takes exception to the sufficiency of the surety.” James’s filing said that Knight Specialty was not an admitted carrier in New York and does not have the certificate of qualification required by state insurance law, CBS News reported.
Commentary/Opinion
The Future of Customer Service is in the Hands of the Bionic Workforce
AI-powered bionic workforces are becoming more regular, unlocking opportunities for brand differentiation, innovation, and sustainable customer growth and retention
In today’s fast-paced business landscape, embracing technological advancements is no longer a choice but a necessity for survival. However, among the myriad of technological advancements shaping all industries globally, there is one that stands out from the pack. AI is a game-changer, leading a new type of digital transformation that has never been seen and one that will open new opportunities for businesses and consumers alike.
For example, in the insurance claims process, AI is expediting the estimating process, saving consumers valuable time, and improving accuracy, saving insurers money in fraudulent claims payouts. However, in its current phase, generative AI is starting to be leveraged more when it comes to revolutionizing the customer experience.
Generative AI was adopted into the customer experience right from the beginning to help improve chatbots and virtual assistants. However, as it matures, some forward-thinking companies in tight job markets, like technology, healthcare, and insurance, are using it to supplement their workforces in valuable ways. This is called a bionic workforce.
Cindy Underwood is Vice President of Global Technical Support at Solera, a global provider of integrated vehicle lifecycle and fleet management software-as-a-service, data, and services
Research
Report: The State of US Road Risk in 2024 - Cambridge Mobile Telematics
CMT’s The State of US Road Risk in 2024 report includes analyses from over one billion car trips across millions of US drivers. It shows that distracted driving fell by 4.5% in 2023, the first decrease since 2020.
The report evaluates the various factors that can reduce distracted driving, including consent-driven usage-based insurance programs, hands-free legislation, and increased media coverage of the dangers of distracted driving.
CMT estimates this reduction in distracted driving helped prevent over 55,000 crashes, 31,000 injuries, 250 fatalities, and close to $2.2 billion in economic damages in the US in 2023.
Americans Are Buying Cheaper Cars
Toyota Motor Corp. and Honda Motor Co. notched big US sales gains and General Motors Co. grew retail deliveries to start the year as demand for lower-priced models help automakers defy expectations for a broad slowdown.
Toyota said Tuesday that deliveries rose more than 20% in the first quarter, buoyed by the compact Corolla sedan and RAV4 crossover. Honda’s CR-V crossover and Civic compact drove the Japanese automaker to a 17% sales increase. GM reported a 1.5% drop in units sold during the quarter due to lower purchases by corporate fleets, but increased sales at retail by 6% with its Chevrolet Trax compact showing the biggest gain.
The early results underscored the importance of affordability for car buyers after pandemic-driven shortages and high interest rates drove up costs in recent years. The pricing bonanza that juiced automaker profits during the pandemic is fading as production normalizes. Now that inventories are rising, car companies are doling out more incentives and prices are starting to slip.
Budget cars and compact SUVs made eye-popping share gains in the first quarter, with sedan growth matching SUVs at Toyota. Large pickup trucks – one of the industry’s priciest segments – lost ground in January and February, according to researcher GlobalData. Several brands, including Jeep, Tesla and Ford, reduced prices to win back inflation-weary consumers and spur demand in the sluggish electric vehicle market.
Munich RE Report | Social Inflation, Legal System Abuse
In a time of ongoing economic inflation and financial pressures, trends that increase costs for consumers and businesses are unwelcome guests. And yet, a pernicious trend exists that is imposing a burden on every business and household: legal system abuse.
Also known as social inflation, legal system abuse refers to actions taking place in the court system that raise costs for defendants and lead to abnormally inflated verdicts and settlements. Prevalent aspects of legal system abuse include plaintiff’s attorney advertising that aggressively recruits plaintiffs, and third-party litigation funding.
The insurance and reinsurance industry is among the first to register the financial impact of legal system abuse. The impact manifests in rising losses and loss adjustment expenses, but ripple effects radiate widely.
Jury awards are escalating in novel ways, and that trend is putting new concepts into the lexicon. Several years ago, a million-dollar verdict might have seemed high, but today we are seeing many “nuclear verdicts” – an award that exceeds $10 million – and we are beginning to see the industry using an even newer term to describe a far higher set, called “thermonuclear verdicts.”
In 2023 alone, four verdicts topped $1.2 billion, while another six verdicts each exceeded $550 million, according to VerdictSearch. Excessive tort costs reduce U.S. economic output by at least $429.35 billion per year, and result in a “tort tax” averaging more than $1,300 per person, according to an analysis by the Perryman Group. Other analyses show an even higher impact. The Institute for Legal Reform estimated tort system costs in 2020 equaled 2.1% of the U.S. gross domestic product, and $3,621 per household.
A recent survey conducted by Munich Re US and the American Property Casualty Insurance Association (APCIA) found concerning results in that the majority of respondents were unaware of the key drivers of legal system abuse.
Maura Freiwald | Head of Casualty, Munich Re US and Bonnie Guth | Head of Government Affairs, Munich Re America Services, Inc.
AI in Insurance
Deciphering AI’s Role in Insurance Raises More Questions Than Answers
At The Professional Liability Underwriting Society’s 2024 cyber symposium in New York City, industry experts delved into the complex relationship between artificial intelligence (AI) and insurance underwriting. Despite AI’s longstanding presence, its rapid evolution, especially in the realm of generative AI, poses unique challenges for underwriters. Garrett Droege highlighted the insurance sector’s sluggish pace in adapting to AI advancements, suggesting that insurers have been aware of AI risks for decades yet have fallen behind in developing comprehensive models to address these risks effectively.
A major hurdle discussed was the ambiguity surrounding AI risks—whether they pertain to cyber or tech Errors & Omissions (E&O) coverages. This grey area complicates the underwriting process, making it difficult for insurers to craft policies that accurately reflect the nuanced risks of AI technology. The existence of AI exclusions in policies was noted, with such exclusions being prepared but not yet widely implemented.
Consumers Welcome AI for Enhanced Experiences in P&C Insurance but Hesitate on AI’s Role in Financial Decisions, According to Insurity’s 2024 AI in Insurance Report
Insurity, the leading provider of cloud software for insurance carriers, brokers, and MGAs, today shared new insights into American consumers’ attitudes toward artificial intelligence (AI) in the property and casualty (P&C) insurance sector. The findings are from Insurity’s 2024 AI in Insurance Report, which is an essential guide for P&C insurance companies exploring integrating AI technologies and adapting to evolving consumer expectations.
In a revealing insight into consumer priorities, the report uncovered the services where AI’s application in P&C insurance had the strongest support, with fraud detection emerging as the top service, garnering 35% of consumer votes. This was closely followed by 32% of respondents supporting AI’s use to deliver personalized products and promotions and 24% of consumers supporting AI in customer service. These preferences suggest growing consumer confidence in AI’s ability to enhance their overall experience and provide tailor-made solutions, reflecting an appreciation for the technology’s potential to streamline and secure their interactions with insurance services.
Conversely, there was a marked resistance to AI stepping into more decision-critical roles. According to the report, 50% of respondents are currently against AI's involvement in claims management, and 45% are currently against AI being used in underwriting policies. This opposition likely stems from concerns over the loss of human judgment in crucial financial decisions, suggesting that while consumers are open to AI's conveniences, they remain cautious about its role in more sensitive and impactful aspects of their insurance coverage.
"Understanding consumer attitudes toward AI is critical for insurance organizations as they plan their AI strategy," said Chris Lafond, Chief Executive Officer at Insurity. "Consumers’ preferences for AI in enhancing service delivery and security, contrasted with reservations about its role in critical decision-making processes, signals a need for a balanced approach to be mindful of areas where human oversight remains preferred. Incorporating AI to complement human judgment rather than replace it will be key to fostering trust and acceptance among consumers."
InsurTech/M&A/Finance💰/Collaboration
NEXT Insurance Launches Copilot - Empowering Agents To Unlock New Revenue - Insurtech Israel News
NEXT Insurance, a leading technology-first small business insurer, announced the availability of Copilot, a tool designed to help agents increase revenue by efficiently serving small micro businesses with customized insurance policies. Similar to other small business owners, insurance agents operate on thin margins and juggle multiple responsibilities.
NEXT’s Copilot empowers business owners to quote and bind online without underwriting delays, while providing agents with a streamlined process. This new tool simplifies operations, saving agents valuable time and enabling more profitable sales with small micro businesses. Copilot exemplifies NEXT’s commitment to empowering agents with innovative digital solutions that drive business growth and deliver value to their clients.
“NEXT’s Copilot offering has been a game-changer for our agents, allowing us to effortlessly serve the small businesses, freelancers, and independent contractors we support,” said Kimberly Silkes, Vice President of Finance Management at InsuranceBee. “At InsuranceBee, we understand the challenges of running a business, and like NEXT, we are dedicated to delivering fast, affordable, and convenient coverage to our clients. With just a simple click, Copilot eliminates time-consuming steps while providing agents the flexibility to customize the purchasing experience according to their unique selling approach.”
Climate/Resilience/Sustainability
ICEYE to help CDC explore flood impacts on public health and safety
ICEYE, the global provider of satellite-powered disaster management solutions, has signed a new contract with the Centers for Disease Control and Prevention (CDC) to provide it with access to ICEYE Flood Insights for events across the US and its territories.
As per the agreement, ICEYE will deliver these incited to teams at CDC’s Geospatial Research, Analysis, and Services Program (GRASP), the organisation’s leading geospatial unit.
GRASP will then partner with groups across the agency to analyse, visualize, and map complex data sets leveraging GIS expertise to explore the link between location and public health.
ICEYE’s Government Solutions are uniquely positioned to support disaster response, recovery, and resilience efforts. By leveraging its more than 30 Synthetic Aperture Radar (SAR) satellites, ICEYE can monitor Earth in any conditions.
The company will provide GRASP researchers with near real-time geospatial data for all significant U.S. flood events, to enhance CDC’s disaster response capabilities.
Hurricane forecast for 2024 predicts highest number of storms ever
Buckle up and hunker down: An "extremely active" hurricane season is likely, top forecasters from Colorado State University announced Thursday. In fact, the forecast includes the highest number of hurricanes ever predicted in an April forecast by Colorado State since the team began issuing predictions in 1995.
Colorado State hurricane forecaster Phil Klotzbach, the author of the forecast, knows what the models show him about the hurricane season that starts June 1, but he's a bit incredulous it could really be that busy.
"We're coming out with a very aggressive forecast: 23 named storms, 11 hurricanes and five major hurricanes," said Klotzbach, a senior research scientist in the atmospheric science department at Colorado State University. "And even that is so undercutting all the model guidance."
People
Novidea Appoints Jeff Heine as Chief Revenue Officer
Novidea, creator of the cloud-based, data-driven enterprise insurance management platform for brokers, agents, MGAs/MGUs, carriers, and wholesalers, has added Jeff Heine as chief revenue officer (CRO). Heine will be instrumental in driving global revenue and further aligning Novidea’s sales, marketing, and other revenue-focused functions to achieve the company’s business and growth objectives.
Heine brings 20 years of Property and Casualty (P&C) insurance industry expertise to the role. Most recently, he served as CRO at Betterview, a remote property intelligence platform that turns data into actionable insights for P&C insurance carriers (acquired by Nearmap). Before that, Heine was CRO at Groundspeed Analytics, an AI-powered ingestion and data solution for the commercial P&C industry (acquired by Insurance Quantified). Heine has other related experience including Guidewire Software and Adsensa (now Coupa Software).
HSB Canada taps new president and CEO
HSB Canada has announced the appointment of Barbara Bellissimo as president and CEO. The appointment took effect Monday.
Bellissimo succeeds John Mulvihill, who has retired after 34 years at HSB Canada. During Mulvihill’s tenure as CEO, HSB Canada doubled its revenue, initiated a transformation program and launched an array of new specialty products, the Toronto-based insurer said in a news release.
Bellissimo began her insurance career in 1986. She is the former Canadian head of the largest insurance company in North America and one of Canada’s top P&C insurers. She recently served as chair of HSB Canada’s board of directors. Bellissimo holds the Fellow Chartered Insurance Professional (FCIP) designation. In 2021, she was appointed to the board of directors of the Financial Services Regulatory Authority of Ontario for a three-year term.