Commentary/Opinion
Harvard Study Again Stirs the Pot on Demotech Ratings of Florida Carriers
A study by researchers from Harvard and Columbia universities and at the Federal Reserve has reopened the debate about the financial fortitude and the financial rating system for dozens of Florida property insurance companies.
The president of Demotech, the firm that rates the vast majority of Florida-domiciled carriers, said the study was incomplete, out of date, and was a continuation of a “hit job” that began in 2022, after Demotech reportedly warned that it planned to downgrade multiple Florida insurers.
“One of the authors contacted us yet never responded when I offered to send whatever data she needed,” Petrelli said in an email. Petrelli did not respond to Insurance Journal when asked for clarification on some of his other points.
Demotech’s “A” financial stability ratings have long been considered to be roughly equivalent to AM Best’s “B”-level ratings, which are strong enough for Fannie Mae and Freddie Mac, the quasi-governmental entities (GSEs) that buy mortgages and require homes to be insured.
But the study found that Demotech’s examinations and ratings are not as rigorous.
The Harvard/Columbia report can be seen here
Insurers Face Rapidly Developing Talent Challenges
The traditional value exchange between carriers and professionals has given way to antagonistic goals undermining the development of institutional knowledge and a strong managerial pool.
The twin challenges of talent and knowledge management are central to many of the conversations we have with insurance carrier CIOs now. The demographic realities are increasingly clear. By 2030, 75 percent of the U.S. Labor Force will be made up of Zoomers and Millennials. The leading edge of Gen X will be picking up Medicare cards and eligible for retirement. That’s a profound wake up call.
When I had the opportunity to host RPM Ventures NC’s most recent Silicon Valley Innovation event, I was struck by several attributes of the participants. One was that the average age was notably lower than had been the case previously. A second was the very high level of technical proficiency that spanned the audience—which contrasted with a general lack of deep knowledge of the industry. It implies both opportunities and risks as companies prepare for what comes next.
Rob McIsaac is the President and CEO of RPM Ventures NC, LLC
Claims
Insurity Delivers Unmatched Claims Efficiency and Integration Capabilities to Personal and Commercial Line P&C Carriers with Claims Solution
Insurity's claims solution reduces costs and enhances agility by enabling insurers to quickly self-adjust claims processes without IT support, streamlining downstream adjustments
Insurity, a leading provider of cloud-based software for insurance carriers, brokers, and MGAs, has announced that its cloud-based claims solution, unmatched in its support for personal and commercial lines in the P&C industry, reaffirms Insurity's commitment to delivering a comprehensive, contemporary, and cloud-native claims solution for multiline carriers across all tiers. With over 330 customers deployed on AWS and Azure, Insurity is the largest cloud software provider for P&C insurance, a testament to its scale and expertise.
Insurity's claims solution aims to reduce the high costs traditionally associated with adapting to changing claims conditions, enabling carriers to extend their claims systems rapidly and adjust loss assignments, business rules, automated correspondence, and more in hours instead of days. This capability empowers business users to expand the system as configurations without the need for coding or database development while still retaining a base implementation.
Insurity’s claims solution can also integrate with over 50 third-party services across supported lines of business for faster, lower-cost implementations. It is integrated with Insurity’s AI Assistant to drive faster claims intake by as much as 75%. Insurity’s claims configuration and integration flexibility represents a pivotal advancement in streamlining the insurance claims process, positioning it as a transformative development for the industry.
Sylvester Mathis, Chief Insurance Officer at Insurity, stated, "Insurity’s claims solution is designed to provide insurers with the agility and efficiency needed to face the challenges of today and tomorrow within the P&C insurance industry. The solution's immediate update capability, such as responding to natural disasters, allows insurers to manage claims effectively under rapidly changing conditions. This ensures enhanced responsiveness and service, crucial for maintaining customer trust and satisfaction."
InsurTech/M&A/Finance💰/Collaboration
ICEYE raises oversubscribed $93 million growth funding round
ICEYE, the global provider of satellite-powered disaster management solutions, has signed a definitive agreement for an oversubscribed $93 million growth funding round, led by Solidium Oy.
The firm aims to use the funds raised to further accelerate investment in “the world’s largest constellation of SAR satellites and expand the company’s portfolio of innovative data and subscription products.”
This round builds on the success of the Series D round in February 2022, bringing the total amount raised to $438 million.
Finnish sovereign wealth fund, Solidium Oy, leads the round, with participation from Move Capital Fund I, Blackwells Capital, Christo Georgiev, and existing investors.
Rafal Modrzewski, CEO and Co-Founder of ICEYE, commented: “As a Finnish heritage company headquartered in Finland, we welcome our newest investor and board member, Solidium.
“This backing from the domestic and international investment community shows trust in ICEYE’s vision to improve life on Earth by becoming the global source of truth in Earth Observation. It is with great pride that we align with our newest investors in the pursuit of ICEYE leading the global market in SAR technology and its broad applications.”
News
Guy Carpenter's revenue rises to $1.1bn in Q1'24
Guy Carpenter, the reinsurance broking arm of Marsh McLennan (MMC), recorded a 7% rise in revenue in the first quarter of 2024 to $1.1 billion, as MMC President and CEO, John Doyle, welcomes a “terrific start” to 2024 for the global broking group.
The company’s reinsurance arm sits within its Risk & Insurance Services division, which achieved 9% year-on-year revenue growth to $4.3 billion in Q1 2024, as operating income increased 12% to $1.6 billion.
As well as Guy Carpenter, Marsh, the insurance broking arm, sits in the same division, and contributed to the growth in the quarter with a 9% rise in revenue to $3 billion. Within Marsh, MMC reports underlying revenue growth of 8% in US/Canada, and growth of 8% in international operations, which reflects 9% growth in EMEA, 8% growth in Latin America, and 6% growth in the Asia Pacific region.
In its Consulting business, revenue totalled $2.2 billion in Q1 2024, an increase of 9% year-on-year, as operating income rose 5% to $432 million.
MMC’s Consulting business includes both Mercer and Oliver Wyman, which produced underlying revenue growth of 6% to $1.4 billion and 13% to $789 million, respectively, in the first quarter of 2024.
[Ed. note: Research and advisory firm Celent is part of the Oliver Wyman group
Ivans: Q1 2024 renewal rates inch up
When surveying renewal rates between Q4 2023 and Q1 2024, all major commercial lines experienced an increase in renewals, according to Ivans.
Average commercial-insurance premium renewal rates for all major commercial lines of business except workers' comp remain up year over year, according to the latest report from Ivans.
"This quarter's Ivans Index results show that the premium renewal rates continue to increase across all major commercial lines, signaling continued hard market conditions," Kathy Hrach, the company's senior vice president of Product Management, said in a press release.
"The continued rate increases of the hard market is being closely tracked across the industry as renewals and remarketing become more and more important, and Ivans Index will continue to be a source of data on rate trends."
AI in Insurance
How AI is changing the claims industry – for the better
How AI is changing the claims industry – for the better. Yet there is one factor to fear.
AI is coming for the insurance industry – whether your company is ready or not. Speaking to Insurance Business, Wendy L. Madevu (pictured), vice president of property, specialty, and casualty claims at Swiss Re Corporate Solutions, said that the tech is already having a big impact on daily operations.
“AI solutions have had a big impact on improving claims management,” Madevu said. “Using information from claims data, we’ve been able to collect large amounts of data, allowing for improved workflows and opportunities to reduce time and costs.”
The Claims Brain is the AI-powered brainchild of Swiss Re Corporate Solutions risk team. A foundational reservoir of claims data serves as the epicenter for enhanced claims analytics – through it, predictive models for subrogation and counter-fraud have emerged, empowering the system to recognize keywords and phrases, maximizing opportunities for recovery.
And it’s a gamechanger for the industry.
Emily Douglas, Insurance News
Data Privacy
LexisNexis Hit With Privacy Class Action Over Alleged Use of PII to 'Turn a Profit' | Legaltech News
The complaint alleges that LexisNexis wielded its “trove of PII” to advertise its Lexis Personal Records Products without the subjects’ authorization. This case was first surfaced by Law.com Radar.
LexisNexis and parent company RELX Group were hit with a privacy class action lawsuit filed in the U.S. District Court for the Central District of California on April 17.
The complaint alleges that the companies disclosed “trove[s] of personally identifiable information of millions of Americans to advertise their Lexis Personal Records Products” without authorization, violating the California Right of Publicity Act and Illinois Right of Publicity Act.
LexisNexis told Legaltech News it doesn’t comment on pending litigation. Attorneys have not yet appeared for defendants in the case.
Specifically, the lawsuit refers to Lexis Personal Records Products’ seven-day free trial, which provides access to the search or review of “any and all of the personally identifiable information in the Defendants’ vast database of personal data.”
Through this trial, the complaint alleges, LexisNexis wields its PII collection as an advertising tool, providing prospective customers with access to “full names, addresses, phone numbers, occupations, employers, social media accounts, and personal property,” which the lawsuit claims “runs afoul of the well-established right of privacy of at least the residents of California and Illinois.”
Privacy4Cars Awarded Three More Patents as New Regulations Require Deletion of Consumer Personal Data Stored in Vehicles in New Jersey and Illinois
Patent Count Grows to Eight Cementing Privacy4Cars' Innovator Role in the Automotive Privacy Tech Space
Privacy4Cars, the first privacy-tech company focused on solving the privacy and security issues posed by vehicle data to protect consumers and automotive businesses, announced today the US Patent Office approved three new patents.
Two are novel areas of expansion for Privacy4Cars:
"Artificial Intelligence Based System and Method for Generating Dynamically Variable Multi-Dimensional Privacy Rating for Vehicles" is the first patent covering how to build privacy rating systems in automotive, a space Privacy4Cars pioneered with Vehicle Privacy Report™, which launched in May 2023 as a free tool for consumers and a merchandising solution for dealerships. It includes the world's first privacy labeling system covering circa 600 million vehicles across the US, Canada, the UK, and the EU.
"Methods and Systems to Reduce Privacy Invasion and Methods and Systems to Thwart Same" is a novel approach to defeating AI and Computer Vision systems that are increasingly used to invade privacy of consumers.
Originally developed to dramatically decrease the accuracy of Automated License Plate Readers (ALPR) without illegally altering plates, it has much broader applicability to reduce the reliability of systems that collect biometrics, use facial recognition, and other image-based IDs.
Recommended Events
Skills today's insurance professionals need | Friday, April 19, 2024 1:00 p.m. ET / 10:00 a.m. PT
Work environments have changed significantly over the last several years as businesses transitioned from full-time office work to fully remote environments. Now, as companies blend both types of experiences into a new hybrid model, the skills required from today's professionals have changed.
Margaret Milkint of Diversified Search Group and Beth Jarecki of Omnia Paratus share how insights on how to succeed in an increasingly digital world.
EMEA
Britain’s Insurers Under Pressure Over Spike in Car Insurance Premiums
The rising cost of car insurance has triggered a barrage of complaints in the cost of living crisis, Britain’s financial watchdog told lawmakers on Wednesday, as the sector insisted that prices remain at 2018 levels in real terms.
Matt Brewis, director of insurance at the Financial Conduct Authority (FCA), said he has heard “heartrending stories” from people trying to make ends meet as costs such as insurance rise.
Generali reveals new organizational structure - Reinsurance News
The Board of Directors of Generali, chaired by Andrea Sironi, has approved a new organizational structure to reflect its main activities proposed by Philippe Donnet, Group Chief Executive Officer.
Effective June 1st 2024, the Generali Group will operate as a diversified financial group focused on two main businesses, namely Insurance and Asset Management.
This transformational change in structure, according to the group, is “designed to further accelerate growth and address key business priorities for the insurance and asset management businesses more effectively, fully aligned with the ambitions of the Group strategic plan “LifeTime Partner 24: Driving Growth.”
The Insurance Division is led by Giulio Terzariol, CEO Insurance, who will drive business performance across all geographies, enhancing coordination, strategic alignment and a closer proximity to markets, by adopting a streamlined and simplified organizational model.
The business units DACH and International will be reorganized as part of the new Division, which will consist of the five business units, which are Italy, France & Global Business Activities, Germany, Austria, Switzerland and three Regions that include Mediterranean & Latin America, Central Eastern Europe and Asia. The entire division will report directly to Terzariol.