Research
World Property and Casualty Insurance Report 2023 | Capgemini
Become an underwriting trailblazer: Chart your transformation across a shifting risk landscape
The global P&C insurance industry faces significant challenges, with global combined ratios reaching 103% in 2022. Inflationary pressure and a volatile risk landscape have tested traditional underwriting strategies; accurate risk prediction and pricing are becoming increasingly challenging and leading to insurability concerns. In response, P&C insurers need to rethink their underwriting strategy to drive tangible business benefits.
Findings from the World Property and Casualty Insurance Report 2024, which reflects the views of 294 insurance executives, 201 insurance underwriters, and 3,323 policyholders, include:
- Underwriting challenges mount for P&C Insurers due to extreme weather events, digital disruption, and escalating customer demands – leading to sub-optimal combined ratios.
- Driving an underwriting transformation requires P&C insurers to connect the data dots, unlock actionable insights, and evolve the role of the underwriter towards strategic and sales-enablement activities. _ Trailblazers that actively work towards underwriting transformation can drive efficiency, fuel accuracy, and enhance the customer/broker experience.
U.S. Independent Collision Repair Shop Population Demonstrates Long-Term Growth
Over the past 10 years, the number of collision repair facilities has been growing, reversing the declining trend evident over the first decade of the 21st century.
According to the latest government data through the third quarter of 2023, the number of independent collision repair facilities is at the highest level since the first quarter of 2009, during the middle of the great recession. The third quarter result marks the 12th consecutive quarter that the number of repair facilities increased on a year-over-year basis.
As the chart below shows, after years of decline starting at the turn of the century, the number of collision repair facility locations in the U.S. have been increasing since the 21st century low in the first quarter of 2014.
News
2024 tropical cyclone prediction; "record breaking" 33
Michael Mann and colleagues predict a record-breaking 33 named storms for the 2024 North Atlantic hurricane season. It is the highest count ever projected.
For more than a decade, Michael Mann of the School of Arts & Sciences and his collaborators have annually reviewed historical weather data and current oceanic and atmospheric conditions, applying computational modeling to forecast coming hurricane seasons.
These predictions are important for disaster preparedness and risk management in regions prone to hurricanes. This year, Mann and team anticipate 33 named storms, the highest to date.
For more than a decade, climate scientist Michael Mann of School of Arts & Sciences at the University of Pennsylvania and colleagues have annually combed through historical weather data, reviewed current oceanic and atmospheric conditions, and applied computational modeling to forecast of coming hurricane seasons.
The team, comprising Shannon Christiansen, a senior research coordinator in the Mann Group, and Michael Kozar, a former graduate researcher in the Mann Research Group, today released their prediction for the 2024 North Atlantic season, which spans from June 1 to Nov. 30.
They forecast an unprecedented 33 named tropical cyclones, potentially ranging between 27 and 39.
How risk managers can prepare for a supercharged hurricane season
Experts are urging businesses to prepare for an above-normal hurricane season. Here’s how risk managers can respond
Hurricane experts are warning businesses to prepare for a “blockbuster” hurricane season.
While the Atlantic hurricane season does not officially start until June 1, there are already “serious and growing concerns” about what lies ahead, according to AccuWeather chief meteorologist Jonathan Porter.
Aon's Reinsurance Solutions delivers 7% organic revenue growth in Q1'24
Global insurance and reinsurance broker Aon has reported a 5% increase in total revenue in the first quarter of 2024 to $4.1 billion, reflecting 5% organic growth and a strong performance its Reinsurance Solutions arm.
Aon attributes the $199 million increase in total revenue to ongoing strong retention, net new business generation and management of the renewal book, and also a 1% favorable impact from fiduciary investment income and a 1% favorable impact from foreign currency translation, partially offset by a 2% unfavourable impact from acquisitions, divestitures and other items.
All of the broker’s business segments performed well in the quarter, with Aon’s Reinsurance Solutions delivering 7% organic revenue growth to $1.2 billion compared with $1.1 billion in Q1 2023.
The reinsurance unit benefitted from strong growth in treaty, driven by strong retention and new business generation, as well as double-digit growth in the Strategy and Technology Group.
“The majority of revenue in our treaty portfolio is recurring in nature and is recorded in connection with the major renewal periods that take place throughout the first half of the year, while the second half of the year is typically driven by facultative placements, capital markets activity and advisory work that is more transactional in nature,” explains Aon.
Ping An’s operating profit rises to $5.3bn in Q1’24
Ping An has announced a rise in operating profit for Q1 2024 to RMB38,709 million (USD 5.34bn) on the back of a solid performance and growth in both its Property & Casualty (P&C) and Life & Health (L&H) insurance businesses.
The Chinese insurers’ P&C segment sustained steady growth and maintained high business quality, with insurance revenue increasing by 5.7% compared to Q1’23, totalling RMB80,627 million (USD 11.12 billion).
For Q1, the company reported an overall P&C combined ratio of 99.6%, and 98.4% excluding guarantee insurance, consistent with the results from the end of 2023, but marking a 0.9 percentage point increase compared to the previous year.
The uptick in the combined ratio was primarily due to snowstorms early in the Chinese New Year period and increased customer travel, which negatively impacted the combined ratio by 2.0 percentage points in the first three months of 2024.
Ping An also experienced steady growth in its Life sector, driven by advancements in sales channels, enhanced business quality, and the introduction of diverse products and services.
The new business value in Ping An’s Life & Health (L&H) division rose by 20.7% compared to Q1’23, reaching RMB12,890 million (USD 1.78 billion).
Additionally, L&H saw a 1.2% increase of realised premium income year-on-year, totalling RMB185,346 million (USD 25.57bn).
WTW reports Q1'24 organic revenue growth of 5%
Global insurance broker WTW has announced 5% organic revenue growth to more than $2.34 billion for the first quarter of 2024, although Group net income fell by 6% year-on-year to $194 million.
Alongside the slight dip in net income, WTW has reported Q1 2024 income from operations of $280 million, down 2% on the prior year quarter’s $285 million.
However, adjusted EBITDA for the quarter was $568 million, or 24.3% of revenue, an increase of 13% compared to adjusted EBITDA of $503 million, or 22.4% of revenue, in Q1 2023.
Within the company’s Risk & Broking segment, total revenue increased 8% on both a reported an organic basis to $978 million from $904 million, as the unit’s operating income rose 13% to $203 million, with a Q1 2024 operating margin of 20.8%, compared with 19.9% a year earlier.
WTW attributes the higher revenue to strong client retention across all geographies and higher levels of new business activity. The operating margin improved as a result of interest income, transformation savings and revenue growth in Corporate Risk & Broking, partially offset by the impact of book-of-business activity, foreign exchange, and Insurance Consulting and Technology’s flat revenue growth.
Global Insurance Prices Continue Moderating as Rates Decline in Most Regions: Marsh
Global commercial insurance rates increased by 1% on average in the first quarter of 2024, compared with a 2% increase in Q4 2023, according to the Global Insurance Market Index published by Marsh, the insurance brokerage business of Marsh McLennan.
Rates continued to be relatively consistent, with most regions experiencing small decreases in Q1, said the report. Marsh explained this was largely driven by a strengthening of the trend for decreases in financial and professional and cyber lines and increasing competition among insurers in the global property market.
InsurTech/M&A/Finance💰/Collaboration
Innovation Group | Scale up claims, speed up repairs.
innovation Group North America (“IG”), a leading provider of cutting-edge technology solutions for insurers, fleet companies and automotive manufacturers, has announced an exciting collaboration with Crash Champions, one of the largest founder-led providers of high-quality collision repair service in the U.S, and the nation’s premier collision repair company.
The alliance between Innovation Group’s advanced technology and Crash Champions’ operational expertise will drive significant advancements in the industry, while further enhancing processes, turnaround times, and the exceptional service customers have come to know from Crash Champions.
“Innovation Group welcomes Crash Champions to our network,” said Pete Douglas, CEO of Innovation Group North America. “Their commitment to quality, to service and their impressive location footprint support IG’s strategy to build the very best outsourced accident management solution in the country.”
Renowned for its dynamic technological platforms and robust operational support infrastructure, Innovation Group North America spearheads innovation in enhancing efficiency and efficacy within insurance and automotive sectors. Their unwavering pursuit of excellence and commitment to pushing the boundaries of technological advancement align strongly with Crash Champions' vision to be the collision repair provider of choice for customers.
Announcements
Great American Insurance Group Announces the Formation of a Dedicated Team to Expand its Embedded Insurance Offerings
Great American Insurance Group is pleased to announce the formation of a dedicated embedded insurance team. Building upon the company’s 20 years of experience offering embedded insurance products, the new team will streamline and simplify the distribution of these offerings.
This newly-formed group, led by Chris Banocy, Divisional Senior Vice President, will assist in finding and evaluating new embedded insurance opportunities for Great American Insurance Group’s specialty property and casualty operations. In addition, the team will develop a suite of custom embedded products, including ticket and travel coverages, which are anticipated to be available in 2024.
“Technology has changed the way consumers make purchases, whether in traditional sectors like auto sales and retail, or in digital spaces. Our mission is to make the process of obtaining coverage as convenient as possible by bringing insurance to the point of sale,” said Rich Suter, Divisional Group President.
“While Great American has vast experience in the embedded channel, the demand for embedded coverages continues to grow at a rapid pace. The formation of a dedicated team allows us to expand our distribution reach and reinforces Great American’s commitment to this channel.”
Great American Insurance Group’s embedded solutions team offers a broad range of flexible, customizable specialty commercial and personal lines products for hundreds of niche industries, leading APIs and other embedded technology.
For additional information, visit our website, or email Chris Banocy at cbanocy@gaig.com or Darnella Schutzman, Divisional Assistant Vice President, at dschutzman@gaig.com.
People
Sedgwick Announces Retirement Of Executive Chairman Dave North
[Ed. Note: Rare and exceptional record of leadership and accomplishment]. During North’s tenure, he steered the company from $50 million in annual revenue to over $4.6 billion
Sedgwick, a leading global provider of claims management, loss adjusting and technology-enabled business solutions, announced that Dave North will retire from his role as Executive Chairman of Sedgwick**, effective June 30, 2024 but will remain a member of the company’s board of directors.
“For the past 29 years, I’ve had the honor of working with a tremendously talented team of Sedgwick colleagues to develop cutting-edge solutions for clients and to share in the successes and opportunities we created,” North said. “Together, we’ve established a customer-focused approach to managing claims and fostered a creative environment where people can grow, perform meaningful work, and serve the needs of our clients. Working at Sedgwick has been among the greatest privileges of my life, and I look forward to seeing the company’s caring counts philosophy continue to flourish.”
North previously served as Sedgwick’s President and Chief Executive Officer from 1995 to 2020. Under his visionary leadership, Sedgwick experienced dramatic growth, evolving from a boutique, regional third-party claims administrator with 500 colleagues to a premier global provider now operating across 80 countries with more than 33,000 colleagues. During North’s tenure, he steered the company from $50 million in annual revenue to over $4.6 billion, offering innovative business solutions in the areas of workers’ compensation, disability, productivity and absence management, managed care, property loss adjusting, risk consulting and other specialty services.
“Dave’s remarkable and transformational leadership has made Sedgwick what it is today. On behalf of the entire company, we extend our heartfelt gratitude to Dave for taking the claims profession to new heights and for his immeasurable contributions to the work we do each day,” said Mike Arbour, CEO of Sedgwick. “I am personally indebted to Dave for his mentorship and trust over the years, and I’m grateful he will continue to support me and our outstanding leadership team as a member of the Sedgwick board of directors.”
Data Privacy/Cyber Security
Dashboard confessions: unveiling the privacy issues in connected cars | Reuters
Technology and everyday items have transformed many passive objects into rich data sources in the digital age. This evolution is evident in the automotive industry, where connected cars have become ever-present. These vehicles with internet connectivity have changed the driving landscape by integrating valuable features such as in-car apps, Wi-Fi hot spots, remote functionalities, and GPS navigation.
However, these vehicles also pose significant privacy risks by collecting vast data on drivers' behaviors. Automakers use this data and share or sell it to third parties, including insurance companies that use it for various reasons, including to make decisions about driver insurance premiums and renewals. This data collection and use usually needs to be more transparent and consistently regulated across states. For instance, while some states have enacted laws allowing consumers to opt out of having their personal information sold, these protections vary widely and typically do not include connected-car data, leaving many privacy gaps.
One prominent example is General Motors (GM) and its OnStar connected services. While initially designed to enhance vehicle safety and functionality, these services also facilitate the collection of extensive and detailed driver data. A consumer disclosure report provided by LexisNexis to a Chevy Bolt driver contained over 130 pages detailing every drive over six months and tracking metrics such as speed, braking intensity, and acceleration patterns, as revealed in a recent court case discussed below. This level of detail surprised the vehicle owner and underscored the invasive nature of such data collection practices.
Drivers have discovered that these types of driving habits reports have been shared with their insurers, causing an increase in the insurance rates and, in some cases, insurance cancellations. Sharing driver data with insurance companies is often justified by the potential benefits of usage-based insurance (UPI) models, which propose that safer driving habits, monitored directly through the vehicle, should lead to lower insurance premiums. However, that is not always the case.