News
Allstate bounces back in Q1 financials
The Allstate Corporation has made a huge turnaround, reporting $1.2 billion in net income applicable to common shareholders in the first quarter of 2024 following last year’s Q1 net loss of $346 million.
Here are some of the highlights from Allstate’s latest set of financial results:
Q1 2024 vs Q1 2023
Consolidated revenues, $15.3 billion vs $13.8 billion
Underwriting income (loss), property-liability $898 million vs $(1.0 billion)
Net income (loss) applicable to common shareholders, $1.2 billion vs $(346 million)
The bounceback in net income was mainly attributed to the improved property-liability underwriting numbers in the period.
Commenting on the insurer’s quarterly performance, chair, president, and chief executive Tom Wilson (pictured) said: “Allstate’s broad-based profitability reflects the benefits of strong operating capabilities, decisive actions to improve shareholder value, and lower catastrophe losses.
Markel Group reports 2024 first quarter results
Markel Group Inc. (NYSE:MKL) today reported its financial results for the first quarter of 2024. The Company also announced today it filed its Form 10-Q for the quarter ended March 31, 2024 with the Securities and Exchange Commission. Markel Group aspires to build one of the world's great companies and deploys three financial engines in pursuit of this goal: Insurance, Investments and Markel Ventures.
"We are pleased with the overall performance of our businesses as we start the year," said Tom Gayner, Chief Executive Officer. "Our insurance team grew the top line year over year, and both operating income and the combined ratio improved significantly from the close of last year as we work towards our long-term profitability objectives. Net investment income increased amid higher interest rates, and our public investments were up meaningfully. Lastly, our Markel Ventures businesses had another terrific quarter, and we couldn't be more pleased with the results of their efforts. Our promise to shareholders is to drive strong performance over the long-term, and with quarters like these, we continue to make progress towards that goal."
Q1 Combined Ratio 95.2
Selective Reports First Quarter 2024 Results
In the first quarter of 2024:
Net premiums written ("NPW") increased 16% compared to the first quarter of 2023;
The GAAP combined ratio was 98.2%, compared to 95.7% in the first quarter of 2023;
Commercial Lines renewal pure price increases averaged 7.6%, up 0.6 points from 7.0% in the first quarter of 2023;
After-tax net investment income was $86 million, up 17% compared to the first quarter of 2023;
Book value per common share was $46.17, up 2% from last quarter; and
Adjusted book value per common share¹ was $50.97, up 2% from last quarter.
Selective Insurance Group, Inc. (NASDAQ: SIGI) reported financial results for the first quarter ended March 31, 2024, with net income per diluted common share of $1.31 and non-GAAP operating income1 per diluted common share of $1.33.
For the quarter, Selective reported a combined ratio of 98.2%, including 3.3 points of unfavorable prior year casualty reserve development and 5.3 points of catastrophe losses. NPW grew 16% from a year ago, with strong top-line growth across all three insurance segments. After-tax net investment income was $86 million, up 17% from a year ago. Non-GAAP operating ROE1 was 11.7%.
"Our organization is committed to disciplined underwriting and enterprise risk management. Our detailed planning and reserving, specific underwriting and pricing actions, and results monitoring process allow us to quickly identify and respond to risks, opportunities, and trends. This positions us as a stable market for our customers and distribution partners," said John J. Marchioni, Chairman, President and Chief Executive Officer.
"During the quarter, we strengthened general liability reserves for recent accident years due to increased severities. We primarily attribute the elevated and uncertain loss trends to the impacts of social inflation, which we have discussed in recent quarters. Our fundamentals remain strong with a profitable combined ratio, average renewal pure price increase of 8.1%, and double-digit operating ROE in the quarter."
The Hanover Reports Strong First Quarter Net Income and Operating Income of $3.18 and $3.08 per Diluted Share, Respectively; Net and Operating Return on Equity of 18.5% and 15.1%, Respectively
Combined ratio of 95.5%; combined ratio, excluding catastrophes(1), of 89.5%
Net premiums written increase of 2.3%*
Renewal price increases(2) of 22.8% in Personal Lines, 11.5% in Core Commercial and 11.0% in Specialty
Loss and loss adjustment expense (LAE) ratio of 64.6%, 9.1 points below the prior-year quarter, driven by lower catastrophe and non-catastrophe losses
Current accident year loss and LAE ratio, excluding catastrophes(3), of 59.3%, 1.9 points below the prior-year quarter
The Hanover Insurance Group, Inc. (NYSE: THG) today reported net income of $115.5 million, or $3.18 per diluted share, in the first quarter of 2024, compared to a net loss of $12.0 million, or $0.34 per basic share, in the prior-year quarter. Operating income(4) was $111.9 million, or $3.08 per diluted share, in the first quarter of 2024, compared to operating income of $4.6 million, or $0.13 per diluted share, in the prior-year quarter.
"The year is off to an excellent start, highlighted by strong underwriting margins and operating return on equity(5) of 15%," said John C. Roche, president and chief executive officer at The Hanover. "In Specialty, we produced another quarter of exceptional profitability, reporting a sub-90s combined ratio while investing in capabilities and positioning ourselves for enhanced growth. We delivered strong performance in Core Commercial, growing our small commercial business by 8% while diligently executing on property profitability actions in middle market. In Personal Lines, we continued to take a disciplined and discerning approach to our growth, as we reposition this book to add more earnings resiliency and to drive strong, sustainable returns. We also began to reaccelerate new business in states where we reached target profitability on a written basis, while continuing to manage micro-concentrations and CAT vulnerability elsewhere, primarily in the Midwest. Our successful execution in the market is a testament to our proven strategy, experienced team and the strong relationships we have with the best independent agents across the country."
Insurtechs Root, Lemonade Book Q1 Net Income Losses but Each Tout Progress
Insurtech Root Inc. posted a net loss for the first quarter 2024 of $6.2 million but said it recorded operating income for the first time in the company’s history.
The net income loss for the first three months of the year is compared to a loss of nearly $41 million during the same time period a year ago. Root booked operating income of $5.4 million compared to a loss of almost $30 million in the first quarter 2023.
The Columbus, Ohio-based company’s Q1 2024 net combined ratio was 102—an improvement of about 59 points from Q1 2023.Full article
Verisk first-quarter profit beats estimates
Data analytics firm Verisk beat estimates for first-quarter profit on Wednesday, driven by strong demand for its products used by property/casualty insurers to assess underwriting risks.
Insurers’ earnings have been hit by higher catastrophe losses in recent years due to extreme weather events around the world, prompting them to spend more on analytics that help determine policy risks.
Global insured losses from natural catastrophes in the first quarter were estimated to be $20 billion, heavily driven by storm activity in the United States, according to a report by reinsurance broker Gallagher Re.
Verisk now caters primarily to the insurance industry after divesting its specialized markets and financial services businesses in March 2022 and April 2022, respectively.
Commentary/Opinion
Claims inflation – will things get worse before they get better?
This article was produced in partnership with Amwins Group.
Gia Snape of Insurance Business America sat down with Jason Kunert, head of claims at Amwins Group, to discuss claims inflation, the factors that continue to drive this phenomenon, and the implications for brokers and their insureds.
Claims inflation has been a silent force shaping the insurance landscape over the past decade. The rise of claims costs over time can be attributed to several factors, including economic trends and societal shifts.
At least one claims expert believes the trend will continue in the casualty space as insurers pay out ever-growing settlement values.
"It's been a gradual climb over the past decade or so,” said Jason Kunert (pictured), head of claims at Amwins Group. “I think that it will get worse before it gets better.”
This inflationary pressure has been felt across various sectors of insurance, leading carriers to increase premiums and restrict coverage limits. The rising number of outsized jury awards, often in excess of $10 million, is a particular source of concern, according to Kunert.
Kunert, a veteran with over 30 years of insurance experience, said he had observed the steady rise in claims costs since the early 2010s. But nothing prepared him for the explosion of settlement values in the past few years.
“What caught our attention was the acceleration we've witnessed since the onset of the COVID-19 pandemic,” he said. “It is outpacing regular economic inflation.”
InsurTech/M&A/Finance/Collaboration
Vista-Backed Auto Data Firm Solera Files Confidentially for IPO
Vista Equity Partners-backed automotive data and software services provider Solera Global Corp. has filed confidentially for an initial public offering.
Westlake, Texas-based Solera announced the filing in a statement Wednesday and didn’t offer any additional details. Its IPO could launch as soon as July and raise more than $1 billion, Bloomberg News has reported. The company has picked banks including Goldman Sachs Group Inc., Morgan Stanley, Bank of America Corp. and Jefferies Financial Group Inc. to work on the offering, people familiar with the matter have said.
Solera is a global software-as-a-service provider of integrated vehicle life-cycle and fleet management. It helps clients including insurers address vehicle claims, repairs and fleet management. Solera serves more than 300,000 customers, according to a statement in March.
Prudential to shut down Assurance, the insurance tech startup it acquired for $2.35B in 2019
Insurance giant Prudential is shutting down Assurance IQ, five years after spending $2.35 billion to acquire the under-the-radar tech startup based in the Seattle region.
“As we look to the future, we believe that directly investing in our core businesses and capabilities will help us become a higher growth, more capital efficient company,” Caroline Feeney, head of Prudential’s U.S. businesses, wrote in an email to employees obtained by GeekWire. “After a careful review of our businesses and strategic initiatives, we have made the difficult decision to wind down our Assurance business.”
Prudential noted in its first quarter earnings report on Tuesday that it “decided to exit” the Assurance business. The company confirmed the shutdown in a statement to GeekWire.
Assurance uses technology to match consumers with insurance plans that are purchased online or through an agent.
Neptune Flood Acquires Data Science Firm Charles River Data to Enhance AI-Driven Flood Insurance Solutions
Neptune Flood, the nation's largest private flood insurance company, today announced its acquisition of Charles River Data, a renowned Boston-based data science consulting group. This strategic move aims to bolster Neptune Flood's already cutting-edge Triton underwriting system through advanced data science, machine learning, and artificial intelligence capabilities.
Charles River Data contributes a prestigious background rooted in big tech and academia, enhancing Neptune's ability to analyze and underwrite flood risk with even greater precision and speed. "The integration of Charles River Data's expertise will enable us to expand our analytical capabilities, ensuring faster and more accurate flood risk assessments for our customers," said Trevor Burgess, CEO of Neptune Flood. "This acquisition aligns perfectly with our commitment to leveraging the best technology to revolutionize insurance."
Matt Duffy, Chief Risk Officer at Neptune Flood, emphasized the synergy between the two companies. "Joining forces with Charles River Data empowers us to enhance our Triton system with new layers of predictive analytics, machine learning, and generative AI, further solidifying our position at the forefront of the insurance technology industry," said Duffy.
This acquisition marks a significant milestone in Neptune Flood's growth strategy, following a series of technological innovations aimed at improving customer experience and operational efficiency. The company's commitment to investing in cutting-edge technology has positioned it as a leader in the flood insurance sector, capable of responding to the evolving needs of its customers.
Innovation
Open introduces innovative travel insurance solution with instant claims technology
Open, a global embedded insurance partner, has introduced a new travel insurance offering tailored to meet the diverse needs of individual travellers and travel providers.
This latest product integrates Open’s Instant Claims technology and introduces Smart Flight Delay, a feature designed to automatically provide lounge passes to customers and up to four companions for flight disruptions of 60 minutes or more, according to InsurTech Insights.
The aim of this innovation is to offer timely assistance to travellers without the hassle of filing a claim.
The travel insurance product by Open follows their digital-first approach, enabling customers to conveniently manage their policies, personalise their coverage, and access support whenever required.
It is crafted to provide customised complimentary coverage for banking, telecommunications, and payment card partners, ensuring that customers receive trip protection tailored to their specific needs.
Moreover, the platform empowers travel providers to seamlessly integrate travel insurance into existing products and services or offer standalone travel insurance for digital brands. This flexibility enhances their portfolios and allows them to create attractive offerings in various contexts.
Sam Hoppe, Chief Commercial and Insurance Officer UK at Open, stated, “Our excitement around our latest travel insurance launch comes from bridging the gap between modern digital travel experiences and innovative insurance solutions.
“The frictionless tech driven journey that travellers expect from airlines and OTAs should seamlessly extend to insurance and that hasn’t been the case up until now and is where we are aiming to lead the way.”
AI in Insurance
AI in the Insurance Industry: The good, the bad and the unknown
The introduction of artificial intelligence into the insurance industry has been met with a mix of both concern and excitement. The ability to streamline manual, time-consuming tasks, sort through vast amounts of data to improve underwriting accuracy and binding policies faster as well as improve customer service at every stage of the insurance process is extremely appealing to carriers, agents, and brokers. At the same time, providing access to personally identifiable information and other confidential data creates some risks for insurers and vendors who handle these documents, particularly as compliance regulations evolve around the globe.
It would probably surprise a lot of people to learn that we've all been using some form of artificial intelligence for well over two decades, but we've probably become more aware of its use as it's become more mainstream, powering chatbots, analyzing weather patterns to predict future forecasts or helping companies to better manage their marketing and customer service activities. Joining me today to discuss all of these issues and much more is Garrett Gray, president of Global Insurance Solutions at CoreLogic, where he leads a team of industry experts focused on building market-driven solutions across the property insurance ecosystem. Previously, he was the founder and the CEO of NextGear Solutions, which was acquired by CoreLogic in August, 2021. Thank you so much for joining us today, Garrett.full interview
Editor's Note
Insurance Industry's Mixed Signals
P&C industry Q1 2024 financial results continue to rebound from massive underwriting losses over the last two years. Sustained rate increases and underwriting actions, improved reinsurance markets and lower CAT activity are attributed to this turnaround.
However, there is fallout. Enormous rate increases brings into question insurance affordability, availability and widespread "premium pain" causing many mixed signals
We wrote about mixed signals and the Insurance Clock in February 2024's Insurance Industry's Mixed Signals
"Today’s world is confusing, replete with mixed and conflicting signals"
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