News
Progressive to Pay $48M to New York Drivers Over Underpaid Total Loss Claims
EDITORS' COMMENTS: This is yet another example of class-action legal risks associated with the blanket use of automated third party ACV software to settle Total Loss claims, a common industry practice for decades. Actual Cash Value amounts must be based on local market and vehicle specific information - period.
Progressive Insurance has agreed to a $48 million settlement with a class of 93,000 New York policyholders who claim the insurer underpaid their total loss claims on their vehicles.
The $48 million represents approximately 54% of the compensatory damages alleged by the plaintiffs plus pre-judgment interest. The settlement covers New York drivers who have filed claims since July 28, 2015. After payment of attorneys’ fees and administrative expenses, the amount to be distributed is approximately $31.3 million, yielding individual payments of about $335 on average.
The plaintiffs allege that the third party software used by Progressive — Mitchell International, Inc.’s WorkCenter Total Loss — applies an improper adjustment called the projected sold adjustment (PSA) in settling total-loss claims. By using the Mitchell valuation reports, and applying the PSA, Progressive “systemically thumbs the scale” when calculating the actual cash value of claimants’ loss vehicles, according to the plaintiffs’ complaint.
Andrew G. Simpson, freelance writer and editor, retired Chief Content Officer for Wells Media Group
AI in Insurance
Can generative AI truly transform the insurance industry, or is it just hype?
This was the fundamental question that underpinned Oxbow Partners’ interviews with executives and senior leadership at 22 of the largest reinsurers and specialty car...
Climate/Resilience/Sustainability
Warmer Than Normal Ocean Temps Will Fuel More Powerful Storms Like Hurricane Beryl
Hurricane Beryl’s explosive growth into an unprecedented early whopper of a storm shows the literal hot water the Atlantic and Caribbean are in right now and the kind of season ahead, experts said.
Beryl smashed multiple records even before its major hurricane-level winds approached land. The powerful storm is acting more like monsters that form in the peak of hurricane season thanks mostly to water temperatures as hot or hotter than the region normally gets in September, five hurricane experts told The Associated Press.
Beryl set the record for earliest Category 4 with winds of at least 130 mph (209 kilometers per hour) — the first-ever Category 4 in June. It also was the earliest storm to rapidly intensify with wind speeds jumping 63 mph (102 kph) in 24 hours, going from an unnamed depression to a Category 4 in 48 hours.
Seth Borenstein has been covering hurricanes for nearly 35 years and is on X at @borenbears
Sorry, Wrong ZIP Code: Regulators Move Forward With California Reforms
Why isn’t my ZIP code on the map?
Questions along those lines emerged at a public hearing hosted by the California Department of Insurance last week when CDI sought comments on proposed regulatory text that will allow insurance carriers to use catastrophe modeling in residential and commercial property rate filings.
In mid-June, CDI released the draft text, clarifying exactly where insurers have to write more homeowners insurance—and by how much—to qualify for the option.
For the most part, speakers representing the insurance industry and those from organized consumer groups put forth predictable objections to the regulatory language, echoing themes from past hearings. Insurers said the requirements to write more business in the state were too strict; consumer groups find them too lenient.
In the middle, homeowners and community supervisors scrutinized a map that CDI released with the draft text and offered new worries about missing areas of distress, and about what will happen when communities move off a map of such area but they still don’t have affordable insurance options.
Susanne Sclafane, Executive Editor at Wells Media Group, Inc.
InsurTech/M&A/Finance💰/Collaboration
Top insurtech funding rounds, June 2024
There were about 40 funding events in the insurtech sector between June 1 and June 30, 2024, according to a review by Digital Insurance. What follows is a selection of these, focusing on those in the insurtech and property & casualty sectors that are part of the venture-capital financing model. (Other funding events, such as private-equity infusions, are included in the overall count.)
A portion of the data was sourced from Crunchbase. Other information, including quotes from investing VCs, comes from company announcements. For our previous edition, which covered the month of May, click here. These updates will continue monthly.
LossExpress Pioneers Digital Vehicle Title for Total Loss with Elephant Insurance
The new solution replaces manual and complex processes of lien release and title procurement to resolve total loss claims faster, with increased confidence in consistency and quality.
LossExpress (Dallas), a provider software-enabled lien and title release capabilities for insurance carriers in the U.S., has launched fully digital vehicle title for total loss with Elephant Insurance, representing the first of many for LossExpress in its efforts to advance the traditional title procurement process for total loss vehicles. Elephant Insurance (Richmond, Va.), a digital-first auto insurance company, has adopted the title procurement enhancement to its longstanding use of LossExpress solutions, according to a LossExpress statement.
“We are excited about this efficiency enhancement for the insurance industry,” comments Rhys Pearce, Head of Claims, Elephant. >
“Policyholders deserve a smooth and expedient claims process, and that’s what LossExpress’ digital title procurement tool can help deliver. The often frustrating vehicle titling process can be simplified and reduced from weeks or months, down to a matter of days. And that’s a win for the customer.”
The new solution addresses the process of obtaining and transferring a vehicle title from the vehicle owner to the insurance carrier during a total loss, commonly referred to as title procurement, which historically has been fraught with challenges driven by a confluence of factors, including the inherent complexities of managing multi-jurisdictional rules and requirements, the time-consuming process of tracking down titles and documentation from vehicle owners and lienholders, manually completing forms and compiling paperwork, and the considerable amount of time waiting for the new title to be produced. Though some insurance carriers still manage this process internally, many have outsourced the handling of this labor-intensive process to salvage companies and other third parties.
Gallagher Bassett Acquires NetClaim from NAVEX
Gallagher Bassett acquired NetClaim from NAVEX.
NetClaim provides first notice of loss and first report of injury services for risk management clients, insurance carriers and third-party administrators throughout the U.S.
NetClaim will join Gallagher Bassett’s incident management team under the direction of Niel Simon, executive vice president of Gallagher Bassett Global Solutions.
Gallagher Bassett is an Arthur J. Gallagher & Co. subsidiary. Arthur J. Gallagher is an insurance brokerage, risk management and consulting services firm headquartered in Rolling Meadows, Illinois.
Meet Five Sigma: Revolutionizing Claims Management with AI - Insurtech Israel News
In this installment of our series on the Israeli Insurtech delegation attending the upcoming ITC Vegas convention in October 2024, we are thrilled to introduce our readers to the innovative companies reshaping the insurance landscape, continuing with Five Sigma, and delve into the depth of their journeys, challenges, and cutting-edge technologies through in-depth interviews.
Novidea Acquires Docomotion - Insurtech Israel News
Novidea, creator of the cloud-based, data-driven enterprise insurance management platform for brokers, agents, MGAs/MGUs, carriers, and wholesalers, today announced the strategic acquisition of Docomotion, an automated document generation technology provider.
The acquisition of Docomotion is the latest in a series of strategic moves by Novidea in its journey to become an insurtech industry leader.
Novidea, creator of the cloud-based, data-driven enterprise insurance management platform for brokers, agents, MGAs/MGUs, carriers, and wholesalers, today announced the strategic acquisition of Docomotion, an automated document generation technology provider. The acquisition of Docomotion is the latest in a series of strategic moves by Novidea in its journey to become an insurtech industry leader. The transaction is set to close within the week.
The acquisition will accelerate product innovation and create unparalleled value to customers, adding new capabilities to Novidea’s award-winning insurance management platform, including automated forms processing, design, management, and e-signatures. Docomotion’s customers will benefit from a broader product suite, increased focus on product development, enhanced customer experience, and global access to professional expertise.
Commentary/Opinion
Is Your Car Spying on You? | Interview with Matteo Carbone | Insurance Thought Leadership
Lawsuits and press coverage are pushing back against the spread of telematics, but Matteo Carbone says the real issues lie elsewhere--and are ripe for solutions.
Paul Carroll
In the U.S., a backlash against telematics may be taking shape, along the lines of, “Your car is spying on you.” How big a problem do you think that will be?
Matteo Carbone
Let's separate perception from reality. If we look at the perception in the insurance community, in the OEM community [the big car makers, known as original equipment manufacturers], sure, this is perceived as a big issue. But if we look at the reality, I'm not convinced that the issue is so big.
First, after the problem with General Motors was highlighted in the New York Times, GM said it discontinued providing data on drivers to data brokers. And Verisk shared in their earnings call that this service only accounted for $1 million in revenue, so we’re talking about nothing.
In my research, the number of policyholders who share driving data through an opt-in program is about 19 million. How many of them did it through OEMs? Less than a million. Almost everyone is sharing data through an insurer’s own mobile-based app after opting in to its UBI [usage-based insurance] program. There is no comparison. One is an elephant. The other is a small insect.
Paul Carroll, editor-in-chief, Insurance Thought Leadership
Autonomous Driving/Insurance
Mercedes "ready" to cop the blame if autonomous cars crash, as nations introduce liability laws
Mercedes-Benz says it is ready to accept the legal and financial burden posed when one of its autonomous cars is at fault in an accident, with the technology now available in some of its vehicles globally.
Currently Mercedes-Benz is rolling out Level 3 autonomous driving technology on a market by market basis through its Drive Pilot software, which was first introduced in Germany as an optional extra on its S-Class and EQS models from May 2022, followed by the US states of California and Nevada in 2023.
Level 3 means conditional automation under certain conditions – the car can be in control (rather than the human being) up to 60km/h, but only on a freeway and the driver must be able to take back control within 10 seconds.
Mercedes is hoping to increase the speed permitted to 90 km/h later this year, and 130km/h by the end of the decade.
However, from Level 3 upwards, instead of drivers being held to blame in the event of a crash the responsibility can be put in the hands of insurance providers, software developers, and automotive manufacturers – when the car is operating under autonomous settings.
Speaking to Drive at the German car maker’s Intelligent Drive Insight event in Melbourne this week, Jochen Haab, the head of Mercedes-Benz's autonomous driving program, said it was ready to act, but as yet it’s theory hadn’t been put into practice.
Canada
Insurance investment group partners with online brokerage
Insurance investment group Southampton Financial has partnered with the driving force behind brokerage Cheep Insurance, a deal designed to provide the brokerage with cutting-edge digital technologies.
Southampton Financial announced its equity partnership with WebBroker Canada Inc. on Tuesday. The deal adds to the firm’s other transactions involving Canadian P&C operations that offer digital car and home insurance.
“Through its equity partnership with Southampton Financial, Cheep Insurance is poised to revolutionize its operations using innovative applications offered by Southampton’s digital platform,” the firm says in a press release.
“This strategic alliance opens the door for expanded operations into Ontario, Alberta, and British Columbia, and signifies a pivotal moment in enhancing the customer experience while fostering employee satisfaction and growth opportunities.”