Research
[Ed. Note: Recommended] Simplifying Risk Analysis with VIN Data: A CAS Seminar Recap
The insurance industry needs dynamic auto pricing symbols.
Learn how dynamic auto pricing symbols can enhance accuracy and competitiveness in the industry.
At last month's Casualty Actuarial Society’s (CAS) Ratemaking, Product & Modeling (RPM) seminar in New Orleans, I had the opportunity to join Martin Ellingsworth from Salt Creek Analytics and Liam McGrath and Clayton Spinner from WTW for a panel discussion around how insurance carriers can simplify their risk analysis using VIN-specific, as-built data.
VIN level data has been used in ratemaking for decades. As vehicles get less homogeneous at the make and model level, there is more opportunity to add precision to rating not just using the first 8 digits of the VIN, but the entire 17-digit VIN. Our session dove into the ways auto insurers look at vehicle data and confronted some of the challenges associated with using a one-size-fits-all approach. We also explored examples using insurance loss data to show how using changes in used car prices can enhance pricing algorithms.
For those who were unable to catch our panel, below is a recap of our discussion
[Recommended] Tech Trend Radar 2024 – The Future of Insurance | Munich Re
Our expert assessment of the insurance technology trends 2024.
What innovations will transform insurance in 2024? Our Tech Trend Radar 2024 guides you through the innovations that really matter.
Experts from Munich Re and ERGO joined forces to collect and assess the most relevant insurance technology trends for 2024. Made by insurers for insurers, the Tech Trend Radar 2024 aims to sharpen awareness, provoke discussion and initiate new business opportunities that appeal to all insurance clients.
The interactive radar may be filtered by line of business to quickly find what is most relevant for you. Each trend comes with a short description, opportunities and risks as well as selected use cases. Most importantly, the report provides an assessment of a trend’s maturity:
CCC Crash Course Report: Auto Tech and EV Repairs Escalate Costs, Delays - Autobody News
The now-quarterly report found a 60% increase in time for vehicle to enter repair shops after an estimate since before the pandemic.
CCC Intelligent Solutions Inc. is now releasing its Crash Course Report on a quarterly basis, and the findings from the first quarter of 2024 show increasing vehicle complexity, combined with rising labor costs and shortages, are placing persistent pressure on carriers and repairers.
According to data compiled from 300 million claims-related transactions, while vehicles may be safer, more capable of avoiding crashes and more environmentally friendly, advanced technology is contributing to costlier repairs, higher claims costs and longer cycle times. Additional factors, such as scheduling backlogs, have contributed to the 60% increase in the amount of time it takes for vehicles to enter repair shops after estimate completion, compared to pre-pandemic times.
“Much of what the industry is experiencing is reflective of a new normal where complexity, beginning with the vehicle itself, is reshaping the market landscape,” said Kyle Krumlauf, director of industry analytics at CCC and co-author of Crash Course.
“CCC has shifted to a quarterly publication of Crash Course to support the growing needs of our customers and the industry. This change allows us to provide more data and insights more frequently, helping industry participants anticipate challenges and be better equipped for the road ahead."
News
Scientists warn about increase in deadly crashes connected to the solar eclipse
Scientists are warning drivers about an increase in deadly crashes connected to Monday’s solar eclipse.
Portions of 14 states will experience a total solar eclipse. The path of totality includes:
- Texas
- Oklahoma
- Arkansas
- Missouri
- Tennessee
- Kentucky
- Illinois
- Indiana
- Ohio
- Michigan
- Pennsylvania
- New York
- Vermont
- New Hampshire
- Maine
Millions of people are expected to hit the road for the best possible view of the celestial phenomenon. Locations on the path of totality aren’t where drivers are most at risk, according to Dr. Don Redelmeier.
The University of Toronto professor closely examined U.S. crash data from the 2017 solar eclipse. “Interestingly enough, they [crashes] don’t occur at the moment of totality. It’s usually about two to four hours later that we find have the greatest increases, when people are returning home, when the eclipse is over,” he describes.
Five of the Top 10 U.S. Auto Insurers Grew Market Share in 2023
Auto insurance premiums earned up over 12% last year.
Total direct premiums earned on private passenger auto insurance were $303.5 billion in the U.S. in 2023, up 12.3% from 270.3 billion in 2022 according to data released March 18 by the National Association of Insurance Commissioners (NAIC). In comparison, during 2022, earned premiums were up 4.86% from 2021. Earned premiums also grew 3.1% in 2021 after a slight decline in 2020 due to the pandemic.
The 10 largest private passenger automobile insurers as a group saw their market share decrease slightly in 2023 versus the previous year. The decrease in 2023 follows four years of growth from 2019-2022 after a slight decline in 2018 compared to the previous year. The top 10 insurers continue to account for more than three out of every four dollars of direct premiums written on auto insurance at 76.81% in 2023, down slightly from 76.96% in 2022, but up from 76.48% in 2021, from 73.54% in 2020, 73.04% in 2019 and 72.17% in 2018.
Since 2000, the largest private passenger automobile insurers in the U.S. had been steadily growing their combined market share with 62.49% of all private passenger auto insurance in the United States in 2022 handled by just the top five companies, up 1.22 percentage points from 61.27% in 2022 and 60.53% in 2021.
In 2023, the top five are up 11.43 percentage points in market share compared to 2010, up from 51.06% of the 2010 market. Over the period from 2000-2023, the top five auto insurers have grown 17.59 percentage points from 44.9% in 2000.
The table below details the market share based upon direct premiums written, since 2000 for the Top 10 largest private insurers in the U.S.
Climate/Resilience/Sustainability
Juniper Re partners with Canopy Weather for advanced storm response analytics
Juniper Re, the reinsurance broking arm of BRP Group, has partnered with Canopy Weather to offer customised severe storm event response analytics to Juniper Re clients.
Severe weather occurrences such as tornadoes, hailstorms, and strong winds can cause significant damage to properties. Canopy utilises advanced technology and expertise to promptly provide accurate observations immediately after storms.
Canopy’s focus on application and data quality allows it to deliver precise post-storm data, providing a comprehensive understanding of ground-level storm impacts unlike any other.
Don Giuliano, President of Canopy, underscores the value of this partnership, stating, “We have a mutual interest in accurately assessing and mitigating the impacts of severe storms. By leveraging our weather analytics expertise and Juniper Re’s innovative reinsurance solutions, we can offer carriers data driven peace of mind and financial security in the face of extreme weather events.”
This collaboration will enable carriers to improve their estimation of storm-related losses, optimise resource allocation, and enhance overall customer satisfaction.
Commentary/Opinion
Swiss Re expert on the outlook for P&C
Since joining Swiss Re in 2006, industry veteran Monica Ningen (pictured above) has held a number of leadership roles and currently serves as CEO of property and casualty reinsurance for the US.
Ningen recently sat down to chat with Insurance Business about the state of the P&C space, how it’s evolving to cope with issues like climate change, and what lies ahead for 2024.
IB: How is the US property and casualty sector faring right now? What opportunities and challenges is it facing?
Ningen: We expect the P&C direct premium written to exceed a trillion dollars already this year, with personal auto accounting for a third of that total. That comes after a second consecutive year of double-digit growth. So when we look over the next decade, we expect the industry to grow slightly faster than the economy, driven by property and liability premiums – which have also grown faster than GDP, historically.
With that said, each line of business will face headwinds and tailwinds. The main driver of property and casualty premium is overall economic growth and the accumulation of assets. When we think about potential headwinds to the industry and industry growth, it’s really the weakening of labor markets and the impact on GDP. Tailwinds include a possible reacceleration of inflation, which helps nominal growth but could hurt profitability.
Independent Adjusters Face Industry Shifts Amid Quality Concerns and Carrier Changes
In a revealing Reddit thread within the adjusters community, independent adjusters (IAs) and staff adjusters alike open up about the current state and future of the adjusting industry.
One veteran IA laments the declining use of IAs by major carriers, attributing part of the issue to a surge of inexperienced adjusters enticed by the prospect of quick money. This sentiment resonates with others who recount instances of subpar workmanship that has not only affected the quality of service but also the industry’s reputation.
The discussion broadens as adjusters share their experiences and compensation, highlighting the differences between independent and staff adjuster roles. Some argue that despite the allure of higher earnings in independent adjusting, staff positions offer stable income, comprehensive benefits, and a more balanced workload. These testimonials shed light on a critical junction where the industry appears to be grappling with a transition toward staff positions and away from reliance on IAs, further accelerated by carriers hiring en masse in anticipation of a future dominated by in-house claims handling and technological advancements.
The thread also touches on the controversial practice of litigation funding and its impact on claims costs and insurance premiums. Adjusters express frustration over legal tactics and social media gurus promising easy money in adjusting, contributing to an influx of underqualified individuals in the field. Amidst these challenges, some adjusters remain hopeful, suggesting that the pendulum may swing back in favor of IAs as carriers recognize the value of experienced and capable adjusters.
In this candid conversation, adjusters voice concerns over the sustainability of their roles, the impact of technology on their work, and the ongoing shift in carrier strategies. The thread captures a snapshot of an industry at a crossroads, facing technological disruption, regulatory changes, and a reevaluation of the traditional adjuster model.
InsurTech/M&A/Finance💰/Collaboration
Allianz to sell Fireman’s Fund business to Arch
German insurer Allianz Global Corporate & Specialty SE has agreed to sell its U.S. mid-market and entertainment insurance business underwritten through Fireman’s Fund to an Arch Capital Group Ltd. unit for $450 million.
As part of the transaction, Arch Insurance North America will assume about $2 billion in loss reserves associated with the business, the Allianz SE unit said in a statement. The business sold to Arch totaled about $1.7 billion in gross premium in 2023.
“The cash payment from Arch, together with an estimated $1.0 billion of Allianz capital supporting the business, is expected to result in $1.4 billion of total transaction value for Allianz Group,” the statement said.
About 500 AGCS staff are expected to join Arch.
Going forward, AGCS’ U.S. focus will be on large commercial and specialty business, the insurer said.
“The acquisition of the midcorp business meaningfully expands our presence in the U.S. middle market, a targeted growth area for Arch,” said Matt Shulman, CEO of Arch Insurance North America, in a separate statement.
The deal is expected to close in the second half of this year.
Allianz bought Petaluma, California-based Fireman’s Fund in 1991 for about $3.3 billion.
Over the past 30 years, it has restructured the operations, including in 2014 absorbing some of it commercial business into AGCS units and in 2015 selling its personal lines business for wealthy individuals to a predecessor of Chubb Ltd. for $365 million. In 2016, Allianz transferred about $2.2 billion of Fireman’s Fund business to a runoff insurer.
The sale to Arch includes most of the active business of Fireman’s Fund, an Allianz spokesman said in an email.
“A later stage in the transaction could include a legal entity purchase of the Fireman’s Fund companies, contingent on the completion of a legal separation from Allianz,” he said.
Bermuda-based Arch's share price rose about 3% in morning trading on Friday.
Announcements
CCC Sets Bold Vision to Make Life Just Work for Customers and the Millions of Consumers Involved in Auto Claims, Repairs Each Year
With proven AI and a new intelligent architecture, CCC will power the next evolution of the P&C insurance economy, helping customers deliver Intelligent Experiences during crucial moments following auto accidents
To reflect its advanced capabilities, the CCC cloud platform is now the CCC Intelligent Experience (IX) Cloud™ platform
Irreversible shifts in the P&C insurance economy, marked by increasing vehicle complexity and labor shortages, require bold thinking and the use of modern, flexible technology. CCC Intelligent Solutions (CCC) stands ready, announcing its technology-backed vision to power the next evolution of the industry, shaping a world where Life Just Works for customers and the millions of their consumers involved in auto claims and repairs each year. CCC is an industry and technology leader with an unmatched history of innovating with and for its more than 35,000 customers and partners.
The only way to address the challenges facing the industry is by embracing a fundamentally new approach to human-centered technology,” said Marc Fredman, chief strategy officer for CCC. “Through the combination of data, advanced AI, and ecosystems, CCC is enabling our customers to transcend traditional boundaries and achieve unprecedented levels of success. With the CCC IX Cloud, CCC is not just envisioning a world where life just works, we're actively engineering it.”
Learn more about how CCC will power intelligent experiences that make Life Just Work for repairers , insurers, and automakers
To download a comprehensive white paper on Intelligent Experiences and to learn more about the CCC IX Cloud, please visit
Innovation
Chaucer launches parametric weather-driven non-damage BI cover - Artemis.bm
International specialty insurance and reinsurance group **Chaucer has announced its entry into the parametric weather risk transfer space, with the launch of a cover for weather-driven non-damage business interruption.
Chaucer will be providing the capacity to the product, which is its first weather insurance offering. Previously the company had partnered with K2 to launch parametric hurricane and earthquake products.
The product will cover weather-related losses for weather events that fall outside a pre-established range of variables such as temperature, wind speed or precipitation, Chaucer explained, adding that it will be a “data-centric class of business where robust quantitative analysis is paramount”.
Weather Insurance is set to be a new underwriting class for Chaucer, with a new specialist team running it that the company has partnered with.
It will be led by Dr Ed Byrns, who previously held leadership roles at Citadel and Louis Dreyfus.
Byrns was also previously the Chief Technology & Innovation Officer at Munich Re Weather Group and was the CEO and a co-founder of insurtech Demex Group.
Future Ford Vehicles Could Get Assistance When Disabled
Ford Motor Company has filed a patent for a system designed to provide assistance when a vehicle is disabled that may be used in future Ford vehicles, Ford Authority has learned.
The patent was filed on September 30th, 2022, published on April 4th, 2024, and assigned serial number 0112147.
Ford Patent Systems To Provide Services To A Disabled Vehicle
The Ford Authority Take Ford has filed a handful of patents in recent months centered around one topic, in particular – providing automated assistance in the event that a vehicle is experiencing some sort of problem. This includes filings for a vehicle defect detection system, a car accident advisement system, an automated maintenance assistant system, and a stranded motorist assistance system. Now, this newly filed patent keeps that trend going by introducing an idea for a system designed to provide assistance when a vehicle is disabled that may be used in future Ford vehicles, too.
Ford Patent Systems To Provide Services To A Disabled Vehicle
The system outlined in this patent would utilize an onboard computer to detect when a vehicle is stopped unexpectedly, and then determine what, if anything, caused that to happen. If it determines that the vehicle stopped due to an accident or mechanical issue, it could then relay that information to both the driver and a service provider, as well as call for help, if needed. Additionally, the service provider would be able to study that information and also call for emergency services if so desired.
Ford Patent Systems To Provide Services To A Disabled Vehicle
That’s not all this system would be capable of, either – in fact, it could even go so far as to provide pictures of the vehicle itself to emergency personnel so they can more easily locate it, which is quite interesting. In any event, the concept here is to automate the process of recovering a vehicle that’s been disabled, all without the user having to lift a proverbial finger.