Climate/Change/Sustainability/ESG
Record-breaking and long-lasting heat wave on way for millions
A June heat wave for the record books is set to send temperatures soaring from the Midwest and Ohio Valley to the Mid-Atlantic and Northeast beginning Sunday and continuing into the coming weeks.
Why it matters: Extreme heat is the top weather-related killer in the U.S. For millions of people, it will be the first heat wave of the season, heightening health risks.
Threat level: By next Friday, more than 260 million people in the U.S. are forecast to see air temperatures reach or exceed 90°F, with many of them experiencing heat indices at or above 100°F.
Big cities that will be affected by this event include Chicago, Washington, D.C., New York City, Hartford and Boston.
Even northern Maine, which typically is just emerging into warmer conditions at this time of year, is likely to see temperatures soar into the upper 90s°F.
Some computer models show that the center of the strong ridge of high pressure, also known as a heat dome, is likely to slide from the southern Great Lakes region to the northern Mid-Atlantic during midweek next week, and into New England.
News
U.S. job growth expected to spike workers' comp claims
As the U.S. job market exploded in May, employers and insurers braced for an uptick in worker's comp claims.
Employers will likely face an increase in workers' compensation claims in light of the U.S. Labor Department's May 2024 report indicating the country added 272,000 new jobs.
"New employees not only equal more workers' comp premiums, they are significantly more likely to incur a claim," Joe Paduda, owner of Health Strategy Associates, said in an interview with PropertyCasualty360.com. "Jobs in health care and construction are at the highest risk."
He added that the workers' comp insurance market has been extremely profitable for decades, leading to even more downward pressure on premiums as insurers fight for market share. "Meanwhile, wages have grown dramatically the last year and should significantly increase workers' comp premiums, but the declining rates will mitigate portions of a potential increase," Paduda said.
According to a recent study from the National Council on Compensation Insurance (NCCI), the job growth in May was broad-based, with 12 out of 14 industry groups adding to the total. At the same time, payroll growth remained strong and above the pre-pandemic average.
"Strong employment gains, coupled with strong wage gains, will continue to support payroll growth in workers' compensation," NCCI Executive Director and Senior Economist Stephen Cooper told PropertyCasualty360.com.
Research
Lifting, falling represent nearly half of disabling workplace injuries
Injuries caused by lifting heavy loads were once again named the costliest in workers compensation, according to data released Tuesday by Liberty Mutual Insurance Co.
The insurer’s Workplace Safety Index estimates the top 10 causes of the most serious workplace injuries — those causing an employee to miss more than five days of work — and ranks them by their direct costs of medical and lost-wage payments. The 2024 figures mirror those of the previous two years and are based on injuries occurring since 2021.
The insurer found that U.S. industries spent $58.07 billion on the direct costs of worker injuries, and 82.5% of that total was for the top 10 causes of disabling injuries and illnesses.
Ranking the types of injuries, Liberty Mutual found that “overexertion involving outside sources,” risked by lifting heavy loads, cost employers $12.49 billion in 2021. Falls, which typically rank as the top injury, took second and third place, with falls on same level costing employers $9.99 billion and falls to a lower level $5.68 billion. Combined, the three categories represented nearly half of all injuries.
Insurity Claims Solution Recognized by Independent Research Firm in Latest P&C Claims Management Systems Report
insurity was recognized as a Strong Performer and cited for its configurable claims system, Sure AI Assistant**, and for serving a more diverse client base, supporting personal and commercial lines
Insurity, the leading provider of cloud software for insurance carriers, brokers, and MGAs, today announced it has been recognized as a Strong Performer in Forrester Research’s report, “The Forrester Wave™: P&C Claims Management Systems, Q2 2024.” Insurity believes this recognition reflects its commitment to delivering innovative claims management solutions and its strategic focus on advancing its claims capabilities.
Insurity’s claims solution, as cited in the report, offers significant benefits for insurers. Its configurable system drives impactful results, while its features, such as enhanced claims communication and adjuster collaboration through the AI assistant, streamline operations. The platform’s ability to quickly incorporate new data elements and fields, with changes circulated throughout the system in under five minutes, further enhances its value. According to the report, Insurity’s claim solution received the top score possible in the criteria of catastrophe and complex event management, adjuster/ecosystem collaboration, and claim communications, which Insurity considers to be a testament to the system’s effectiveness.
Insurity has made strides in serving a diverse client base, supporting both personal and commercial lines, and aims to mitigate the impact and cost of change for insurers looking to reduce costs and IT risks. This reinforces Insurity’s commitment to providing robust, scalable solutions tailored to the needs of mid-tier multiline insurers.
Commentary/Opinion
US homeowners keep underestimating their flood exposure – Munich Re
Floods are one of the most devastating types of natural disasters, yet many property owners underestimate their risk. Despite the potential for severe damage, only 22% of homeowners surveyed by Munich Re and the Insurance Information Institute (Triple-I) believe they are at risk of flooding. Of those who perceive a risk, only 78% have purchased flood insurance.
“Ninety percent of all natural disasters include some type of flooding,” Munich Re US EVP head of specialty Tim Brockett said. “It is an underestimation of risk.”
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In a report, Munich Re noted that inaccurate flood maps and wishful thinking may contribute to this underestimation. In 2019, only 42% of FEMA’s maps correctly predicted flood risk. Additionally, if mortgage lenders do not require flood insurance, property owners may opt to go without it to save on costs.
As the frequency of flooding increases, Munich Re highlights insurers which will play a crucial role in educating property owners about the risks and available insurance options. Insurers may develop new products to address the rising exposures and invest in technologies to model risk more accurately and prevent damages.
The cost of flood insurance and the administrative burden of purchasing a separate policy are two main reasons why homeowners might not buy flood insurance
Telematics, Driving & Insurance
Sfara announces Instant Trip Start to accompany its All-Speed Crash Detection with ZeroMotion, their next step covering the most common crash scenarios that others miss
Sfara continues innovating against the market's existing commodity crash detection solutions. Sfara has combined its previously announced ZeroMotionTM crash detection with their new Instant Trip Start feature, which includes attributing drivers to vehicles with no additional hardware.
With the release of SDK7, Sfara further widens its substantial lead against competitive crash detection solutions in covering the most common real-world crash scenarios that others miss. This coverage not only saves lives, but also improves enterprise economics, such as for First-Notice-of-Loss in the insurance industry.
Sfara already owns the industry's only crash detection that offers detection and reporting at all speeds, plus when the vehicle is not moving. With that alone, Sfara's technology covers the additional 70 percent of collisions that other solutions miss. By adding Instant Trip Start to ZeroMotion, Sfara can now provide crash detection the moment customers start their vehicles (with no installations, upgrades, dongles or tags).
As always with Sfara's smartphone-based solutions, no additional hardware or installations are required by the end user.
This is important because industry analysis has revealed that an astounding 25 percent of all collisions occur within 180 seconds of the start of driving. Further corroborating this is additional research showing that 23 percent occur within one mile of home. Plus, 20 percent of collisions occur in parking lots (*)
Despite the enormous percentage of collisions, damages, and injuries that occur within these scenarios, only Sfara has overcome the complexities of reliably detecting and reporting crashes within them.
Rocco Tricarico, Sfara
AI in Insurance
What Future Role Can AI Play in Workers’ Compensation?
With its multifaceted capabilities, AI is significantly reshaping the workers’ compensation industry today, addressing its inherent challenges, and enhancing its operational, clinical and customer service elements.
Suppose workers’ compensation carriers had more widely adopted artificial intelligence during the early stages of the opioid crisis. How might it have been used to mitigate the extent of it and, in effect, save lives?
Artificial Intelligence Explained
Artificial intelligence (AI) is the simulation of human intelligence in machines programmed to think like humans and mimic their actions. This technology encompasses learning, reasoning, problem-solving, perception, and language understanding capabilities. Its capabilities include:
Learning: AI systems can learn and adapt to new information or stimuli from their environment.
Problem-Solving: Through algorithms and decision-making capabilities, AI can solve problems, often optimizing for specified objectives.
Automation: AI enables automation of various tasks and processes, reducing human intervention.
Data Analysis: AI can analyze and interpret vast datasets, deriving insights that can inform decision-making.
Natural Language Processing: AI enables interaction and communication by understanding and generating human language.
Pattern Recognition: AI can identify patterns and anomalies in various forms of data.
AI in Workers’ Compensation
With its multifaceted capabilities, AI is significantly reshaping the workers’ compensation industry today, addressing its inherent challenges, and enhancing its operational, clinical and customer service elements. By intertwining intelligent technology with human expertise, the industry is optimizing its processes, improving its service delivery, and ensuring better outcomes for injured workers navigating their recovery journey. Examples include:
Pricing and underwriting are affected, employing machine learning models to develop more accurate, dynamic pricing for policies, considering numerous variables that might influence risk. Implementing AI algorithms to automate the underwriting process, analyzing data points to evaluate risk, and determining policy terms efficiently are also utilized.
Colorado Tries to Stop Insurance Discrimination in Age of AI
Insurance is increasingly relying on computers to make decisions that affect people—which means industry regulators must try to understand and prevent discrimination in those AI systems.
Colorado is among the states furthest ahead on regulating algorithmic discrimination in insurance, and officials there are wrestling with thorny questions: What constitutes unfair discrimination when artificial intelligence is making insurance decisions? And how do you measure it without collecting data on the race of policyholders?
The state’s law sets out to protect consumers from unfair discrimination by insurance carriers, and zeroes in on how companies are using the plethora of data available on their customers. The law—passed in 2021—is still being implemented, and next week an industry group will present its proposal to answer the questions about measuring discrimination and inferring race.
It’s industry practice for insurers to not ask people for their race when they apply for a policy. To comply with the law, Colorado insurers will have to guess the race of their policyholders. They’ll probably do that using a method that infers someone’s race based on their name and ZIP code, but that’s still under discussion.
“It’s a technical problem, but really key to getting at the what the statute is all about,” said Jason Lapham, big data and AI policy director at the Colorado Division of Insurance, which is tasked with implementing the law.
InsurTech/M&A/Finance💰/Collaboration
Amplify Completes Successful $20 Million Series B
Crosslink Capital and Anthemis led the round, with new investors Moneta Ventures and Evolution Ventures joining, alongside existing investors MRV and Greycroft.
Amplify was founded in 2019 and is a platform that allows users to invest in various public equities and alternative assets using their life insurance premiums, aiming to help Americans access tax-free returns throughout their lifetime.
Hanna Wu, Amplify CEO and co-founder, told Business Insider: “Both my parents were life insurance agents who started a policy for me when I was very young. After graduating from college, I was able to take some money out of my life insurance policy to open an office.”
Wu argues that people are often unaware of the financial benefits available through life insurance policies, and Amplify seeks to change that. The company uses proprietary machine learning data to model customers’ lifetime values and attract high-value customers, leading to higher average premiums than the broader industry.
The insurtech claims to have grown its revenues by 200% annually since its $12 million Series A in 2022. The company will use its new funding to expand its suite of products through its digital platform.
Events
ITC Vegas 2024 - The world’s largest gathering of insurance innovation
Event Date: Tuesday, October 15 – Thursday, October 17, 2024
Event Location:
Mandalay Bay Convention Center 3950 Las Vegas Blvd S Las Vegas, NV 89119
ITC Vegas combines unbeatable networking with what’s new and next, ensuring your time will be spent meeting more people, sourcing more solutions, and creating valuable partnerships.
Discover solutions to your biggest challenges, gain access to unique and meaningful education, and meet the insurance industry’s best and brightest. Join the insurance event that doesn’t just bring the industry together – it moves the entire industry forward.
The future of insurance is here – at ITC Vegas. If you aren’t here, you are missing out on the conversations that are propelling the industry forward