News
Justice Department and Federal Trade Commission Seeking Information on Competition Impact of Serial Acquisitions and Roll-Up Strategies
[Editor's comment: We will be watching this topic closely as the P&C ecosystem from repairers to insurtechs, investors and countless insurer vendor/provider partners (among all other industries) have interest in any potential regulation]
Agencies request information on how acquisition strategies impact competition across the economy including aftermarket/repair services.
The Justice Department and Federal Trade Commission (FTC) jointly launched a public inquiry May 23 to identify serial acquisitions and roll-up strategies throughout the U.S. economy that the agencies say have led to consolidation and harmed competition.
In a joint Request for Information (RFI), the agencies are seeking information from the public on serial acquisitions in all sectors and industries in the U.S. economy, including but not limited to aftermarket/repair, housing, defense, cybersecurity, distribution businesses, agriculture, construction and professional services markets.
US court approves $25 mln Allstate settlement in insurance rate class action | Reuters
A U.S. judge in California has approved a $25 million class-action settlement in a lawsuit accusing insurance giant Allstate (ALL.N), opens new tab of overcharging thousands of its automotive policyholders based on their willingness to pay a higher premium.
U.S. District Judge Yvonne Gonzalez Rogers in Oakland ruled, opens new tab on Tuesday that a small number of objections to the settlement did not derail the accord, which she called “fair, adequate, and reasonable.”
More than 1.2 million class members in California accused Allstate of violating California’s unfair competition law and other provisions by using motorists' tolerance for price increases to help calculate premiums, which is prohibited for insurance providers.
Affected policyholders can expect an average recovery of about $13 per class member, Rogers wrote. Allstate denied any wrongdoing in agreeing to settle the lawsuit, filed in 2015.
The company also agreed under the settlement not to use “any form of price optimization” to set private passenger auto rates for California policyholders. Illinois-based Allstate and the plaintiffs’ attorneys did not immediately respond to requests for comment on Wednesday.
In her ruling, Rogers approved nearly $7.8 million in legal fees and litigation costs. The fee award amounted to 30% of the settlement fund. Allstate did not oppose the amount.
Washington Premium Change Transparency Rule Kicks in June 1
Insurance will be required tell policyholders why their premiums have gone up staring June 1.
A new rule by Washington state Insurance Commissioner Mike Kreidler first requires insurers to provide an answer on why premiums have gone up, and in 2027, carriers will be required to provide that information automatically when a policy renews.
The new premium change transparency rule covers auto and homeowner insurance policies. full article
Nationwide dumping insurance for about 100,000 pets as vet costs rise
Nationwide, the nation's largest pet insurer, is dropping coverage for about 100,000 pets across the country, blaming the rising costs of veterinary care and other factors that it says are threatening long-term viability and profitability of its pet insurance business.
"As pet lovers ourselves, we understand the emotions connected to the protection of our family pets. Inflation in the cost of veterinary care and other factors have led to recent underwriting changes and plan availability in some states — difficult actions that are necessary to ensure a financially sustainable future for our pet insurance line of business," the company said in a statement Wednesday.
Affected policyholders are being informed in writing about Nationwide's plans. The company, which insures 1.2 million pets, began sending letters to policy holders this spring and will continue into the summer of 2025.
Nationwide is the country's largest pet insurer, but is having to drop coverage for about 100,000 pets because of rising costs of care and other factors. The move by the Columbus, Ohio-based insurer, which also is a leading employer in Des Moines, comes amid a spiraling crisis in insurance costs.
Commentary/Opinion
Decoding PFAS’ Impact: Expert Insights from Philadelphia Insurance Companies
Navigating the complexities of PFAS contamination and its impact on drinking water, Jon Peeples of Philadelphia Insurance Companies discusses the challenges faced by water treatment plants, potential litigation and the insurance industry’s response.
Dan Reynolds, editor-in-chief of Risk & Insurance, recently sat down with Jon Peeples, vice president and director of environmental underwriting at Philadelphia Insurance Companies. They discussed the pressing issue of contamination by PFAS (per- and polyfluoroalkyl substances), its impact on drinking water, potential litigation and claims, and the role of the insurance industry in managing this risk.
What follows is a transcript of that conversation, edited for length and clarity.
Risk & Insurance: What are the main sources of PFAS contamination and their impacts on drinking water?
Jon Peeples: PFAS contamination has had a significant impact on drinking water because of four main release factors. The first is PFAS-contaminated wastewater effluent (waste that pours into water or air) where treatment plants did not have the technology to treat PFAS.
Second, PFAS releases from manufacturing facilities and municipal landfills have impacted groundwater and surface water.
A third major source derives from firefighting foam, particularly in areas with frequent firefighting training, such as Department of Defense spaces like the former Willow Grove Air Force base outside of Philadelphia.
The fourth notable impact comes from agriculture, as biosolids from wastewater treatment plants are often dried and used as fertilizer. These biosolids can contain PFAS, which went unanalyzed, unlike other contaminants, such as metals. As a result, PFAS contamination has been entering the environment and, unfortunately, humans for an extended period of time. full interview
What are the key pain points impacting insurance companies today?
In his role as partner and global insurance leader at PwC, Jim Bichard (pictured) oversees a team of some 15,000 professionals serving insurance clients across 100-plus countries on a daily basis. It’s a role that has helped him develop a unique point of view of how the sector has evolved, where it stands today – and what the future holds for the insurance market.
Digging into some of the key pain points he sees facing insurance businesses, Bichard looked to PwC’s most recent ‘Insurance Banana Skins’ report’ and its finding that insurance companies are being exposed to a plethora of macro-economic and geopolitical risks.
What’s pressing on insurance companies today?
Interest rates, inflation and geopolitical conflict are just some of the risks having either first or second order impacts on insurance companies today, he said. Meanwhile, as part of a regulated sector, insurance companies are grappling with increasing complexity.
“Technological disruption and climate change are risks that continue to move up the register,” he said. “Scenarios such as cyber are creating risks; and given the amount of reliance on data across the whole of the insurance market, it’s no surprise that data protection and cyber is high on the agenda.
Research
The insurance industry has big ambitions for analytics but struggles to realize benefits as progress stalls
According to a new survey result from WTW (Willis Towers Watson, NASDAQ: WTW), a leading global advisory, broking and solutions company, companies reveal slower than expected progress in their efforts to implement advanced analytics. Despite the scale of investment made by North American property and casualty (P&C) insurers, WTW’s 2024 P&C Insurance Advanced Analytics Survey highlights the challenges these companies face with data and analytics.
Insurers have long used analytics in pricing and underwriting, and only a few outliers remain today. However, traditional analytics is increasingly insufficient in these functions, with 49% of insurers saying they are incorporating AI into their analytics processes.
However, while AI is used more in pricing and underwriting, insurers struggle to integrate analytics into other areas of their organizations. The aspiration is present, with many insurers stating that they intend to incorporate analytics into different areas, including claims, marketing, distribution, and others, within the next two years. Nevertheless, considering the actual use of analytics over the last few years, the results demonstrate that progress has been significantly slower than initially hoped for and, in some cases, non-existent.
When asked about the most significant impediment to increasing the use of analytics in their organizations, the most frequent survey response was IT bottlenecks. Despite the considerable investment in technology over the last few years, this trend has deteriorated instead of demonstrating improvement. In addition to technology challenges, translating analytics needs into business realities was frequently cited in the survey as a driver behind the slow progress.
Laura Doddington, Head of Personal Lines, Insurance Consulting and Technology (ICT), North America, WTW, stated: “Insurers want to use analytics across their business - the ambition is there, but it’s not translating into reality. read on
InsurTech/M&A/Finance/Collaboration
Mylo Partners with Ascend Pushing the Modernization of the Insurance Industry Forward
Ascend, the leading provider of financial operations automation software to the insurance industry, is proud to announce its strategic partnership with Mylo, an insurtech leader connecting individuals and business owners with top-rated insurance products from over a hundred carriers across multiple coverage lines.
An Orange Partner of Vertafore, Ascend aims to partner with AMS360 agencies like Mylo to further advance the modernization of the industry's financial infrastructure integrations that complement Vertafore's suite of products, improving processes, simplifying workflows and driving new business.
"Our partnership with Ascend signifies a major milestone in our pursuit of insurance transformation through technology," states Mylo's President and COO, Belen Tokarski. "By adopting Ascend's advanced automation tools, we are poised to unlock enhanced operational efficiencies, streamline financial management processes, and deliver an unparalleled customer experience. This collaboration exemplifies our commitment to leveraging innovative technologies to drive profitability and establish Mylo as a leader in the technology-driven insurance landscape."
InsurTech leverages technology to enhance, automate today's insurance industry
It’s expected that the American life and non-life insurance market will grow from $2.02 trillion this year to $2.83 trillion by 2029, in terms of net written premiums value. Driving this increase, according to ResearchAndMarkets.com, is the growing use of InsurTech.
A subset and younger sibling of FinTech, InsurTech is the use of innovative technologies like artificial intelligence, big data analysis, cloud computing, wearables and sensors, and more, to enhance, improve and automate the traditional insurance industry.
“Pre-COVID, you could probably go to a FinTech event every week, but if you were an insurance person going to a FinTech event, you were pretty much an ugly duckling,” said David Gritz the co-founder and managing director of InsurTech NY, along with Tony Lew, who recently presented at the Big I New York’s GO BIG! convention in Syracuse.
Gritz and Lew founded InsurTech NY in 2019 to bring together carriers, brokers, investors, and InsurTech startups and to help them take advantage of the latest digital technology to improve efficiencies and increase revenue
“There are a lot of Main Street people that can benefit from some of the innovations coming out of the InsurTech space,” Gritz said. “And our hope was to raise the profile of those companies and help first facilitate those connections.”
Bindable Partners with HoneyQuote to Enhance Home Insurance Options for Florida Residents
Consumers using Bindable's insurance marketplace now have access to the top insurance companies providing coverage across the state of Florida, including coastal properties
Bindable, the InsurTech leader for alternative distribution solutions, has announced a new partnership with HoneyQuote, a home insurance comparison tool that is changing the way homeowners shop for insurance in Florida. Now customers looking for Florida home insurance via Bindable's insurance comparison shopping platform will be connected to HoneyQuote.com to access additional options to meet their home insurance coverage needs.
"We recognize that finding an affordable yet sufficient home insurance policy these days can be difficult, especially for homeowners in Florida, " said Jean-Marie Lovett, president of Bindable. "Our partnership with HoneyQuote ensures our Florida customers have access to competitive options for home insurance, and reflects our commitment to always exploring new ways to provide the most comprehensive selection of products for consumers."
VOOM Insurance partnered with Driver Technologies
Driver Technologies (Driver), an AI-based mobility tech company that delivers a safer, connected driving experience, and VOOM Insurance, an insurtech company that provides data-driven, usage-based insurance products for the future of mobility, today announced their new partnership to help more rideshare drivers get the tailored auto insurance they need while providing them with the technology to enhance their driving safety on the roads.
VOOM provides premium access to the Driver app and the option to receive a lower deductible on their insurance by enabling external video recording in the Driver app in the event they share their accident footage during their claim.
Driver’s No. 1 rated AI driving copilot app, Driver®, transforms a driver’s smartphone into an advanced mobile driving assistance system and dash cam designed to make connected mobility technology more accessible. As part of its premium service offerings, drivers can access their Driver Cloud to view all of their telematics data and videos, monitor their road safety score, the Driver Score, receive automated coaching and have the ability to share any videos for claims purposes.
“We are excited to partner with VOOM to equip rideshare drivers with the tools they need to improve their driving habits,” said Rashid Galadanci, CEO and co-founder of Driver Technologies. “At Driver, we’re committed to developing mobility solutions for rideshare drivers to protect themselves and their passengers on the road while implementing safe driving habits that can result in discounted insurance premiums.”
Events
InsurTech Summit 2024 June 4, 2024 | 2:00 – 7:30 PM (ET)
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As a leader in insurance innovation, we extend this exclusive invitation to join us for InsurTech Summit 2024, a curated half-day program featuring top insurance-focused investors, start-up founders, key players from emerging companies and other industry stakeholders.
Experience engaging discussions and gain sharp insights into the commercial and legal issues currently impacting this rapidly evolving sector.
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