Commentary/Opinion
CLUE Report: What Is It and How Does It Affect Insurance Rates?
A CLUE report provides a history of all insurance claims made on a specific property or vehicle over the past seven years. They’re generated by analytics firm LexisNexis to help insurers decide whether to approve or deny coverage, how much coverage to provide and what premiums to charge.
Over 95% of home insurance companies and more than 99% of auto insurers rely on CLUE reports, according to LexisNexis.
The files contain a variety of information, much of it relating to specific claims and basic information regarding the policyholder at the time of the claim:
Insurance company
Policyholder’s personal information and policy number
Date of losses and claims
Type of loss (water damage, fire, etc.)
If the claim was denied
Amount paid on the claim if approved
Policyholders can also add notations to their CLUE reports: If, for example, a homeowner gets rid of a dog after a dog-bite claim, according to the Wisconsin Office of the Commissioner of Insurance, ”[they] can add this notation to the CLUE report for the property.”
In 2023, LexisNexis launched C.L.U.E. Auto 360, which adds data from police records and other vehicle-specific sources outside of insurance claims that indicate damage.
How to get a CLUE report
The Fair Credit Reporting Act of 1970 gives individuals the right to ask for at least one free CLUE report for their property or vehicle each year. You can request a report from LexisNext online, by phone or by mail.
You’ll need to provide your full name, date of birth, address, city, state and zip code, as well as your Social Security number and driver’s license number.
You can’t request a CLUE report about a property or vehicle if you are not the owner. But if you’re buying a house or used car, you can ask the current owner to show you its CLUE report.
News
Vehicle Thefts Surge Nationwide in 2023
Vehicle thefts continue to surge nationwide, challenging vehicle owners and law enforcement agencies hoping to curb this growing crime trend. A new report released by the National Insurance Crime Bureau (NICB), the nation's leading not-for-profit organization exclusively dedicated to identifying, investigating, preventing, and deterring insurance fraud and crime, shows another record-breaking year for vehicle thefts in 2023.
Last year, more than one million vehicles were reported stolen and overall vehicle thefts increased about one percent nationwide from 1,008,756 in 2022 to 1,020,729 in 2023. Vehicle theft rates have risen steadily since 2019. California accounted for the highest number of vehicle thefts nationwide in 2023 with 208,668 vehicles reported stolen. The District of Columbia had the highest theft rate across the nation in 2023 with 1,149.71 thefts per 100,000 people, which is over three times the national theft rate.
"Criminals are employing increasingly sophisticated methods to steal vehicles, including the use of advanced technology to bypass security systems," said David J. Glawe, President and CEO of NICB. "From keyless entry hacks to relay attacks on key fobs, perpetrators are exploiting vulnerabilities in modern vehicle security measures with alarming success rates. It is critical that industry and law enforcement work together to develop more effective strategies for combating auto theft and safeguarding public safety."full press release
If US Inflation Reflected Rising Home Insurance Costs, It’d Be Even Higher
If the rising price of homeowners insurance were factored into the US Consumer Price Index — a key metric of inflation — it could have added 80 basis points, or about 0.8%, to last year’s CPI increase of 3.4%, according to an analysis from Bloomberg Intelligence.
By not including home insurance, the CPI “ignores climate costs,” writes BI senior analyst Andrew Stevenson in his April 9 note. article
ACORD releases Global Insurance Stock Index for Q1
ACORD has released its Global Insurance Stock Index for the first quarter of 2024 with positive results.
An extension of ACORD’s Global Value Creation methodologies and corresponding studies, the quarterly index tracks the performance of more than 200 of the largest publicly traded life and non-life insurance carriers.
“The ACORD Global Insurance Stock Index returned 32.4% in the first quarter 2024, amid a strong global equity market which ended the quarter up 21.0%,” ACORD reported. “Positive returns outnumbered negative 5:1.
“Signs of a robust economy, combined with expectations for a ‘soft landing’, underpinned the best quarter in several years for numerous market indices. Despite the positive results, headwinds remain as geopolitical tensions rise and inflation remains an issue.”
The largest insurance company payouts
Workers have begun to clear the wreckage of the Francis Scott Key Bridge in Baltimore, which collapsed after a container ship struck one of its support pillars. The harbor clean-up is expected to cost hundreds of millions of dollars, and analysts told Reuters that "insured losses could total between $2 billion and $4 billion," potentially making it the largest maritime insurance loss in history.
Questions are brewing over who will cover the cost of the Key Bridge disaster, with the Singaporean company that owns the container ship likely to push back on liability claims. But this certainly won't be the first time insurance companies will have to open their checkbooks. Here are five of the largest insurance payouts in U.S. history.
1. Lehman Brothers — over $115B
No institution sums up the massive plunge of the 2008 economic crisis like Lehman Brothers, when the shuttered investment bank underwent what is believed to be the largest insurance payout in history. Amid the collapse of the global economy, Lehman Brothers filed for bankruptcy in 2008, and insurance began paying out thousands of customer claims. This continued for 14 years until 2022, when the Securities Investor Protection Corporation announced the "return of more than $115 billion to [Lehman Brothers] customers and creditors." Most of this went back to former Lehman customers, who "received $106 billion, fully satisfying the 111,000 customer claims."
BY JUSTIN KLAWANS, THE WEEK US
Climate/Resilience/Sustainability
State regulators release national climate resilience strategy
"This is the first time we’re going to have a real coordinated response before the disaster happens"
State regulators release national climate resilience strategy Catastrophe & Flood
State insurance regulators released a plan Friday for a coordinated national effort to strengthen property insurance markets and fortify their states against severe weather and climate-related disasters.
The National Climate Resiliency Strategy for Insurance focuses on strengthening communities against wildfires, floods and storms and giving regulators better data and information to address coverage gaps.
“The goal of the strategy is to drive faster and more effective risk reduction by state insurance regulators to ensure that insurance continues to be available and reliable as communities across our nation face climate risk,” Andrew Mais, Connecticut insurance commissioner and NAIC president, said during a media briefing
Can we rely on property insurance data results even if states opt out?
Even if some states decide not to participate in a national effort to collect data on property insurance markets, the results of the initiative will still help regulators improve availability and affordability of coverage, a leading state official said.
The National Association of Insurance Commissioners last month launched a 90-day property and casualty market intelligence data call that seeks to collect zip-code-level information on about 70 data points – including premiums, policies, claims, losses, limits, deductibles, non-renewals and coverage types – from more than 400 insurers.
But at least one state – Louisiana – is not responding to the data call. Several others could opt out, consumer advocates have said.
The NAIC will not release a list of participating states, Connecticut Insurance Commissioner Andrew Mais (pictured above, left) said Friday. But he stressed that the number of states submitting data won’t affect the reliability of the results because NAIC will be able to gather data from the insurance companies it’s surveying.
Mais, who is NAIC president this year, said the goal is to assess 80% of the national homeowners’ property insurance market, and the organization is on track to do that.
“We are confident that the data is valid,” Mais told reporters Friday when releasing NAIC’s climate resiliency strategy. The data collection is central to the strategy, which is the first collective effort by states to address the effects of severe weather and climate-related disasters on property insurance.”
Insurance industry not matching customer expectations for green parts – Solera
Insurance industry not matching customer expectations for green parts – Solera
'Insurers and garages can play a vital role in helping customers understand the green options available,’ says managing director.
Research
2022 was the ‘worst year ever for bicyclist deaths,’ new data shows - Route Fifty
The number of cyclists who died in traffic crashes reached the highest number in 2022 since the federal government started tracking those deaths half a century ago, with 1,105 people dying in that year while riding a bike.
That’s an increase from 976 cyclists who died in 2021.
The grim statistics come as part of a trove of data on 2022 road fatalities that the National Highway Traffic Safety Administration released earlier this week. Data on cyclists and their habits is notoriously hard to collect, and changing federal definitions make some year-to-year comparisons difficult. Part of the reason for the most recent jump appears to be a new way of classifying motorized bicycles.
But Ken McLeod, the policy director of the League of American Bicyclists, said 2022 was the “worst year ever for bicyclist deaths.”
“It’s probably not because there’s more people biking,” given the little data on cycling that’s available, McLeod said in an interview. “So it’s an increase in people being hit and in those crashes resulting in deaths.”
InsurTech/M&A/Finance💰/Collaboration
Top insurtech funding rounds, March 2024
There were about 50 funding events in the insurtech sector between March 1 and March 31, 2024, according to a review by Digital Insurance. What follows is a selection of these, focusing on those in the insurtech and property & casualty sectors that are part of the venture-capital financing model. (Other funding events, such as private-equity infusions, are included in the overall count.)
A portion of the data was sourced from Crunchbase. Other information, including quotes from investing VCs, comes from company announcements. For our previous edition, which covered the month of February click here. These updates will continue monthly.
Predict & Prevent
The Wake-Up Call From Taiwan's Earthquake | Insurance Thought Leadership
When two earthquakes made front page news in the past week, the one near New York City seemed to get more attention because, well, New York City.... But the earthquake that hit Taiwan is far more important, not just because of the billions of dollars of damage it caused but because of what it didn't cause.
The 7.4 earthquake (on the Richter scale) in Taiwan unleashed some 8,000 times as much energy as the 4.8 earthquake that shook the New York City area, yet the death toll was only 13 people, and only one of those was killed in a building collapse. The rest were killed by landslides and boulders.
How was Taiwan so well prepared that a massive quake killed only 13 people, 25 years after a similar quake there killed almost 2,500? Therein lies a tale – and an endorsement for the Predict & Prevent model for insurers and their clients.
The short answer about why Taiwan withstood the earthquake so well includes luck. The earthquake occurred just off the coast of a sparsely populated, mountainous area that absorbed much of the force before it reached Hualien County and its population of about 320,000.
But Taiwan has also been bracing itself, literally, for a quake like this for 50 years. Taiwan has been incorporating earthquake resistance into building codes since 1974 and has been continually strengthening requirements based on lessons learned from quakes around the world.
Taiwan has enforced the codes, too. After the Chi-Chi quake in 1999 killed almost 2,500 people, inspections found that many developers and builders had taken shortcuts or used cheaper materials to save on costs. Many were thrown in prison, as well as fined heavily.
Thousands of buildings were reinforced, including more than 10,000 schools. When a strong quake hit Hualien in 2018, building regulations were tightened further.
The BBC described the effects of Taiwan's preparations as stunning: full article
Paul Carroll, editor, Insurance Thought Leadership
Data Privacy
Your Car Is Spying on You. Seriously.
Automakers fail to meet basic security standards, collect intimate data, and may share it without your knowledge.The world of connected cars and telematics can deliver undoubted advantages, but there is a dark side.
On the positive side of the ledger, turning vehicles into data-harvesting machines can make for more efficient corporate fleet management. There are also safety benefits of installing technology that can alert first responders during accidents or breakdowns.
However, there is a negative point of view that the world of connected cars is a "privacy nightmare on wheels," according to a report by the U.S.-based Mozilla Foundation.
“All new cars today are privacy nightmares on wheels that collect huge amounts of personal information,” said Mozilla’s Jen Caltrider, the lead for *Privacy, Not Included.
The Mozilla report, released late last year, looked at 25 car brands that collected customer data.
This went well beyond data on how often and how far people drive.
“Deeply personal”
Today, connected cars exchange information across wireless networks, often in real-time, with vehicle manufacturers, third-party service providers, and infrastructure operators.
This data can be sold to data brokers for marketing and targeted advertising.
“New cars today are privacy nightmares on wheels that collect huge amounts of personal information."
According to Mozilla research, popular car brands such as BMW, Tesla and Toyota can collect "deeply personal" data such as sexual activity, immigration status, race, facial expressions, weight and genetic information.
Between 2019 and 2022, it has been reported that Tesla employees internally circulated intimate footage taken in private cars for their own amusement.
The report says sitting in a car was "a lot like handing your phone over to the auto manufacturer."
“Researchers found data is being gathered by sensors, microphones, cameras, and the phones and devices drivers connect to their cars, as well as by car apps, company websites, dealerships, and vehicle telematics,” the report said.