Increased automobile claims frequencies and severities drive GEICO's underwriting losses  February 27th 2023

Berkshire Hathaway reports underwriting loss for 2022 but reinsurance result improves

Berkshire Hathaway, the Warren Buffett-run holding company and conglomerate, has reported an underwriting profit of $244 million across its insurance and

At GEICO, which writes private passenger automobile insurance, Berkshire highlights the continuation of changes in average claims frequencies and severities in 2022, which saw losses and loss adjustment expenses rise from $30.1 billion in 2021 to $36.3 billion in 2022.

As a result, GEICO has reported an underwriting loss of $1.88 billion for 2022 compared with a gain of $1.259 billion in 2021, and a gain of $3.428 billion in 2020.

Liberty Mutual Tackling U.S. Personal Lines Challenges

The story of U.S. personal lines challenges impacting the results of multiline insurers was repeated for Liberty Mutual, which reported underwriting losses and waning policy growth in the segment in 2022.

President and Chief Executive Officer Tim Sweeney reported overall drops in net income for Liberty Mutual Holding Company’s fourth-quarter and full-year 2022 on Thursday, principally related to changes in investment returns, as well as overall jumps in companywide premiums driven by two acquisitions: State Auto in the U.S. and AmGeneral in Malaysia. He also highlighted developments in U.S. personal lines.

Allstate agent number drops to record low level

Allstate Insurance Company has reported a considerable drop in its insurance agent count.

In a Securities and Exchange Commission filing submitted on February 16, the insurer disclosed that it has just 8,400 agents that are contracted to sell Allstate auto and home insurance exclusively. That count is a significant drop from the 9,300 it had claimed a year ago, and 10,400 two years ago, based on previous SEC filings.

Crain’s Chicago Business reported that the Illinois-based Allstate had topped an agent count of 12,000 in recent years, before the decline occurred.

It was reported that on top of the agent reductions, Allstate agents’ physical storefronts have also dropped in number. Hundreds of the insurer’s agents have been urged to instead work out of their homes, as Allstate encouraged sales reps to utilize centralized call centers to offer services to clients.

11 Ways Inflation and Economic Volatility are Influencing Insurance in 2023

With inflation rising, every line of insurance must stay on top of its impact and what that means for business moving into the new year.

Just 9% of home policyholders adjusted coverage to account for inflation

Most homeowners (56%) haven’t reviewed their property insurance policy during the past 12 months and just 9% have adjusted their limits to account for growing construction costs and inflation, according to Policygenius.

Further, the online insurance marketplace reported just 33% of homeowners are “very sure” their policy limit is high enough to cover the full replacement of their home.

“Construction costs on single-family homes were up nearly 17% in 2022, yet our survey found that just 14% of homeowners increased their insurance limits or added coverage features to account for this,” Pat Howard, licensed property and casualty insurance expert at Policygenius, said in a release. “Most people are aware of how prices have skyrocketed over the last two years, but one of the most overlooked impacts of inflation is how it has caused homes to be underinsured, which happens when a home’s insurance coverage isn’t high enough to pay for a full rebuild after a disaster.”

AI-based solution to speed up auto claims for insurers and fleets

The company, a specialist in vehicle lifecycle management, is attending Insurtech Insights Europe on 1-2 March to exhibit its end-to-end vehicle claims and risk management solution.

The technology uses the power of AI and visual intelligence (VI) of Qapter VI, e-Driving and Mentor to provide a smoother and more efficient automotive touchless claims journey for fleet and automotive insurers. It’s said to be the only technology to integrate driver risk management, emergency response and AI-driven claims management in one integrated platform.

It’s designed to speed up the claims process through automated, AI-driven decision making – reducing the average claim estimate time from two hours to 10 minutes.

3 reasons insurers should implement AI into core systems

From underwriting to claims processing, the insurance industry is on the cusp of a seismic shift. Traditional processes which rely on rules-based engines are being replaced by artificial intelligence and deep learning models – condensing weeks of work into a matter of days or even minutes. 

For many insurance companies, the AI revolution is already well underway in claims processing and distribution – particularly around fraud detection. Accurately detecting fraud depends on being able to analyze huge quantities of data to spot anomalies. So, replacing multiple databases, pivot tables and spreadsheets with dynamic AI-based applications is an obvious place for insurers to start their AI journey.  

But fraud detection isn't the only area that can benefit from an injection of AI. As digital transformation across all sectors continues, it's clear that insurers must modernize every part of their back office. This is where AI shines. Not only can AI-based applications process huge quantities of unstructured data in seconds, it's also much quicker to adapt to new scenarios – like the recent telehealth revolution, or growing insurance losses stemming from the increase in natural disasters. 

Éric Sibony, CSO amd Co-Founder, Shift Technology

[Ed. Note: Recommended] What P/C Insurance Leaders Read; Carrier Management Classics

Ten years ago this week, Wells Media announced the launch of CarrierManagement.com.

Mark Wells, executive chair of Wells Media Group, introduced the brand explaining, “There are other publications that target the executive suite of P/C insurance companies, but they talk mostly about insurance. Here, we’re talking more about management—about activities that don’t necessarily just relate to insurance or underwriting.”

Ten years later, it’s clear that we not only delivered on that mission—internally, we refer to it as being the Harvard Business Review of property/casualty insurance—but also that our leadership and management content is what our readers cared about most.

For easy reference, we’ve collected executive summaries of the 100 most popular features—10 for each full year we’ve published—so that you can quickly browse and locate the articles you need.

Tuning up your auto insurance underwriting

The effects of the pandemic have wreaked havoc on the health of many auto insurers’ books of business. From “boomerang kids” moving home to supply chain issues and widespread inflation, the lifestyle and economic changes of the past few years have created new challenges for achieving profitability.

Compounding the problem, some insurers paused or relaxed renewal underwriting programs during the lockdowns of 2020 and have struggled recently to obtain approval for proposed rate increases.

So how can the auto insurance industry improve its performance without increasing rates? The answer is simple: Tuning up their underwriting.

From mass layoffs to resignations - how workplace changes are impacting workers’ comp

The nature of work for many has changed greatly since 2020 – and with it has come challenges in the workers’ compensation sector.

Matthew Zender, senior vice president of workers’ compensation strategy at AmTrust Financial Services, Inc., has had a front row seat on how the world of work has changed, and how the sector has, and will have to adapt to this new working world.

“There are massive dislocations in terms of the job force right now,” said Zender. “You have huge influxes of new employees. And the data tells us that new employees are more likely to be injured (on the job). They’re less familiar with what to do and how to do it.”