News
Your Driving, Tracked - The New York Times
We explore the apps that are quietly tracking drivers’ habits.
You know you have a credit score. Did you know that you might also have a driving score?
Driving scores are based on how often you slam on the brakes, speed, look at your phone or drive late at night — information that, likely without your knowing, can be collected by your car or by apps on your smartphone. That data is sold to brokers, who work with auto insurers.
These scores can help determine how much drivers pay for insurance. That’s not necessarily a bad thing: Experts say that basing premiums on how we actually drive — rather than on our credit scores and whether we’re married or went to college — could be a fairer system, and ultimately improve road safety.
But this tracking will only lead to safer driving if people know that it is happening.
How it happens
The smartphone apps collecting driver data might not be obvious at first glance. One, Life360, is popular with parents who want to keep track of their families. MyRadar offers weather forecasts. GasBuddy can help you find cheap fuel on a road trip.
But all of these apps also have opt-in driving analysis features that offer insights into things like safety and fuel usage. Those insights are provided by Arity, a data broker founded by Allstate.
Kashmir Hill, NY Times Journalist
US P&C insurance sector bounces back in Q1
New report spotlights significant improvement in sector's combined ratio
The US property and casualty insurance industry has turned things around following losses posted in the first quarter of 2023, according to AM Best’s analysis of P&C insurers’ Q1 financial results made available by May 29, 2024.
According to the “First Look: Three-Month 2024 US Property/Casualty Financial Results” report by AM Best, the industry enjoyed a net underwriting gain of $9.3 billion in the first quarter of 2024, a stark contrast to the $8.5 billion loss in the same period the previous year.
The companies whose data were used for the analysis cover about 98% of the total P&C industry’s net premiums written.
Read more: What’s on the horizon for US P&C earnings in 2024?
State Farm zigzags on California home policy non-renewals - The Press Democrat
State Farm has changed its policy on non-renewals, taking a page out of other carriers’ playbooks.
The largest carrier in California announced in March it would not renew more than 70,000 policies in the state — 30,000 of them home insurance policies. Much of the reason centered on the increasing risk of wildfires in the state.
Now according to a statement from the insurer’s California spokesman, Sevag Sarkissian, it will renew those policies — but with a hitch.
State Farm clients will have to specifically secure fire coverage from the California FAIR Plan, the state’s insurance program of last resort that’s less comprehensive and costs more. It covers fire as a peril but not other coverages such as liability. Those policies dated for renewal after July 3 will need a “FAIR Plan Policy Perils Exclusion,” Sarkissian’s email read.
Research
The Most Profitable Insurance Company in the World
We recently compiled a comprehensive report on the 20 Most Profitable Insurance Companies in the World and in this article, we'll be discussing the world's most profitable insurance company.
The Current State of Insurance
The Red Sea Crisis is impacting the insurance industry. On January 16, Reuters reported that war insurance claims have risen tremendously amid the Red Sea Crisis. The insurance industry claimed that risk premiums have increased to almost 1% from 0.7% a week before the report date. This translates to higher costs for ships making trips through the Red Sea for trade. The report also highlighted that shipowners considered voyaging through South Africa to be more cost-effective than paying hundreds and thousands in transit fees and insurance premiums.
The Travelers Companies, Inc. (NYSE:TRV) and AXA SA (OTC:AXAHY) are among the most profitable insurance companies in the world. Let's read some recent updates from these companies. You can also read our piece on the largest insurance companies in the world. READ ON
InsurTech/M&A/Finance💰/Collaboration
How Insurtechs and Incumbents Fared in Q1 | Insurance Thought Leadership
The Equal Ventures Insurance Index is a quarterly summary of public equity performance in the P&C insurance industry. This post summarizes performance of our insurtech/legacy indices in Q1 2024, highlighting key themes and trends in valuations.
Q1 was a strong quarter for stocks, and particularly so for the P&C insurance industry. 10Ks that hit during the quarter confirmed that the industry appears to be turning a corner on profitability. Capital is flowing again toward the hardest risks (Chubb called property the “best-priced business in the world”), and there were explosive stock price increases at insurtechs that demonstrated higher-quality growth.
Q1 2024 Summary Stats:
- Insurance equities broadly performed well in Q1: All four of our indices outperformed the broader market (SPX + 10%; Nasdaq + 9%)
- Insurtechs outperformed legacy peer groups in both distribution and carrier indices, consistent with the trend we saw in Q4 and in FY 2023.
- Carriers generally outperformed as higher rates and lower losses led to stronger results and improved guidance. The Insurtech Carrier Index, in particular, nearly tripled over the quarter, as investors anticipate and try to get ahead of a turnaround in fundamentals.
Slow week for FinTech with just $176m raised across 13 deals
It was a slow week for FinTech deals, with just 13 deals completed and a total of $176m raised.
This was a relatively slow week for the sector compared to last week which saw $332m raised across 21 deals.
Without the US, this week’s FinTech deals activity would have been nearly nonexistent. The country was responsible for eight FinTech deals, including five of the biggest funding rounds. In total, US-based FinTech companies pulled in $138m.
The US-based companies to secure funds this week were SpyCloud, HYPR, Indico Data, Understory, Sixfold, Authentic Insurance, Liminal and Prósperos.
A handful of European countries also recorded deals this week. These were Germany (re:cap), France (Continuity), the UK (WealthOS) and Switzerland (Kaspar&). Only one country outside of the US and Europe recorded a deal this week, with India recording one deal (Vegapay).
In terms of sectors, InsurTech reigned supreme, recording four deals. These companies were Understory, Sixfold, Authentic Insurance and Continuity.
Following just behind InsurTech was WealthTech, which recorded three deals (WealthOS, Prósperos and Kaspar&.) There were also two CyberTech deals this week, SpyCloud and HYPR, which both raised $35m – the biggest deals of the week.
WTW and Guidewire collaborate to enhance underwriting and insurance pricing - Reinsurance News
WTW, a global advisory, broking, and solutions company, has announced a new partnership with Guidewire, a provider of software solutions for the insurance industry.
This collaboration will enable carriers to quickly integrate WTW and Guidewire’s cloud platforms, enhancing the sophistication and speed-to-market of pricing, rating, and underwriting.
Will Murphy, Vice President, Global Technology Alliances at Guidewire, commented: “We’re excited to welcome WTW as a new technology solution partner and look forward to their contribution to the Guidewire Marketplace. The combination of PolicyCenter with WTW’s Radar analytics solution will enable insurers to realise quicker and more accurate underwriting and pricing performance.”
Canada
What’s the biggest challenge for P&C brokers?
Canada’s property & casualty (P&C) insurance market is transitioning after years of significant price increases. With premium growth now tapering, brokers and their insureds must navigate a new dynamic amid persisting challenges.
“We are seeing a levelling out in the market and, in some cases, significant softening. That is going to create some challenges for both brokers and our insurance partners,” said Ilan Serman (pictured), who was recently named chief markets officer at Gallagher Canada.
According to Serman, catastrophe risks, particularly wildfires, pose significant hurdles for P&C. The heightened unpredictability of natural disasters, especially during last year’s record-breaking wildfire season in Canada, has prompted some carriers to withdraw capacity from cat-exposed areas.
“It’s getting increasingly difficult to find capacity for some of our clients who might be wildfire exposed,” Serman said.
Innovation
Megacasting Is One More Way Tesla Just Has to Be Different
[EDITOR'S NOTE: Increased auto repair costs are very much linked to greater technology, more expensive parts and procedures. Sensors and related diagnostic scanning and calibration are a good example of how OE's began using them for ADAS systems somewhat ahead of insurer and consumer awareness. This scenario might repeat itself again and again. Imagine a "throw away" chassis and how much additional cost for a moderate collision.]
While much of the automotive industry continues to build electric vehicles at a loss, Tesla is making them at a profit. The now Texas-based company achieved this through a variety of measures, such as selling its carbon credits to automakers whose product lines fall short of federal mandates. But Tesla has also introduced new manufacturing methods that cut down on assembly costs.
This includes a technology called megacasting—or gigacasting in Tesla parlance—developed by Italy's dra Group. Tesla uses it at a number of its factories, including the Texas facility that produces the Model Y and the Cybertruck.
Megacasting is a form of die-casting, a process that involves jamming liquid metal (typically aluminum, in the automotive industry's case) into a mold under high pressure. The amount of pressure depends on the size of a given component. A piece with a larger surface area needs more metal injected into the mold at higher pressure, necessitating an increase in the clamping force of the press used to hold the model together during the casting procedure.
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Traditionally, automakers use dozens of different extruded, stamped, forged, and cast pieces in the structures of their models, bonding, welding, and sticking these pieces together as part of the assembly process. Megacasting, however, eliminates this assembly complexity, replacing a multitude of parts with one large piece, such as an entire front or rear structure. Whereas smaller parts stamped and cast under conventional methods may need a few hundred tons of clamping force, the additional metal and larger surface area of parts produced using megacasting requires a press capable of achieving upward of 9000 tons of force.
People
Lee Yuan Siong Named Chairman of The Geneva Association | Insurance Innovation Reporter
Lee, who is Group Chief Executive and President of AIA, succeeds outgoing Chairman Christian Mumenthaler, CEO of Swiss Re.
The Geneva Association, a global association of insurance companies whose members are reinsurance CEOs, has announced that Lee Yuan Siong, Group Chief Executive and President of AIA, has been named Chairman of the organization at its spring 2024 board meeting on June 5. Lee, who has been Vice Chairman of The Geneva Association since November 2021, succeeds outgoing Chairman Christian Mumenthaler, CEO of Swiss Re.
The association also announced that three members of the Association were elected to the board of directors at the 2024 General Assembly on 6 June: Satoru Komiya, CEO, Tokio Marine; Pauline Leclerc-Glorieux, CEO, BNP Paribas Cardif; and Bianca Tetteroo, CEO and Chair of the Executive Board, Achmea.
“It is an honor to be appointed Chairman of The Geneva Association,” comments Lee Yuan Siong. “In every corner of the world, we are facing increasingly complex risks covering ageing, health, climate and technology. Over the last 50 years, the Association has established a much-needed global platform, bringing knowledge, debate and recommendations to address the most pressing societal challenges. The Geneva Association’s belief in ‘Insurance for A Better World’ has never been more relevant than it is today. I look forward to working with the board and our members to drive greater impact and understanding of the insurance industry’s role in helping to create a more resilient future.”
CNA names Worman to succeed Robusto as CEO
CNA Financial Corp. said late Wednesday that underwriting chief Doug Worman will become CEO of the insurer next year, succeeding Dino Robusto, who will become executive chairman.
Mr. Worman, who joined CNA in 2017 from Endurance Specialty Holdings Ltd., is currently executive vice president and global head of underwriting. He will become president and CEO on Jan. 1, 2025, CNA said in a statement.
Before Endurance, Mr. Worman was an executive at Alterra Capital Holdings Ltd. and Sharebridge Underwriting Group. He began his insurance career at American International Group Inc., where he became president and CEO of its excess casualty division.
Mr. Robusto joined CNA from Chubb Ltd. in 2016 as chairman and CEO.
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