Climate/Change/Sustainability/ESG
California Commissioner’s Analysis Shows $7.7B in Losses From Extreme Heat Events
The cumulative cost of the seven heat events in California in the past decade amounted to $7.7 billion in losses, a new report shows.
The analysis from California Insurance Commissioner Ricardo Lara’s office is the result of legislation he sponsored in 2022. It quantifies the uninsured and insured costs of seven recent extreme heat events across the state.
Hurricane Beryl: $3.3bn in insured losses estimated by KCC
Karen Clark & Company (KCC) has estimated that the privately insured loss from Hurricane Beryl will be close to $510 million in the Caribbean, $90 million in Mexico and $2.7 billion in the US.
According to the firm, its US estimate includes the privately insured damage to residential, commercial, and industrial properties and automobiles and business interruption, though does not include boats, offshore properties, or NFIP losses. Meanwhile, the estimates for the Caribbean and Mexico do not include automobiles or business interruption
Home Insurance Rates in America Are Wildly Distorted. Here’s Why.- The New York Times
Climate change is driving rates higher, but not always in areas with the greatest risk.
Enid, Okla., surrounded by farms about 90 minutes north of Oklahoma City, has an unwelcome distinction: Home insurance is more expensive, relative to home values, than almost anywhere else in the country.
Enid is hardly the American community that is most vulnerable to damaging weather. Yet as a share of home prices, insurance costs more in parts of Enid than in New Orleans, much of which is below sea level. More than in Paradise, Calif., which was destroyed by the Camp fire in 2018. More than in the Florida Keys, which are frequently wracked by hurricanes. Even more than in the Outer Banks of North Carolina, where houses have begun slipping into the rising sea.
Enid’s plight reveals an odd distortion in America’s system of pricing home insurance. As a warming planet delivers increasingly damaging weather, the cost of home insurance has jumped drastically. But companies are charging some people, especially in the middle of the country and parts of the Southeast, far more than other homeowners with similar levels of risk, an examination by The New York Times has shown.
Christopher Flavelle reported from Enid, Okla. Data analysis and graphics by Mira Rojanasakul. Photographs by Desiree Rios.
Research
Marsh McLennan still top, but Gallagher now world's third largest insurance broker
Ranked by 2023 total revenues, Marsh McLennan retains the top position for the 14th consecutive year in AM Best's rankings of the top global insurance brokers, with its total revenue rising nearly 9.7% to reach $22.7 billion in the year.
Our directory of the Top 20 Global Insurance & Reinsurance Broking Groups is based on research data from rating agency A.M. Best.
Among the top 20 firms, Marsh McLennan also experienced the largest revenue growth, increasing by $2 billion compared to the previous year.
Aon maintained its second position for the 14th consecutive year, achieving a 7.2% increase in total revenue, from $12.5 billion to $13.4 billion.
However, WTW dropped to fourth place from its third-place position in 2022. In its place, Gallagher ascended to the third spot for the first time since its acquisition of WTW’s treaty reinsurance operations finalised in December 2021.
Conning: U.S. MGA Market Grows Swiftly - Exceeds $102 billion in Premium in 2023
In 2023, premium produced by Managing General Agents ("MGA(s)") continued to grow more rapidly than the property casualty market overall, continuing the significant growth trend experienced over the last two years. The estimated MGA premium written by U.S. insurance companies grew by 13%, while total property-casualty premium grew at 10%. Conning estimates that the total U.S. MGA market, including business written for the account of Lloyd's syndicates, exceeded $102 billion in direct premiums written in 2023.
"MGAs' success hinges on a combination of talent, technology, capital and market conditions. In 2023, these factors converged, driving sustained growth and resilience, and paving the way for further sector expansion," said Lauryn Kothavale, a Vice President for Insurance Research at Conning.
By Conning's calculation, fronting companies accounted for more than $14 billion in premium written by MGAs in 2023, an increase of 27% over the previous year. Approximately 17% of total MGA premium is now supported by fronting companies, a share that has more than tripled since 2020.
Growth within the Lloyd's market – historically, and still today, the largest single source of capacity for U.S. MGAs – did not experience substantial growth and experienced stagnation. Lloyd's syndicates grew their U.S. binder business by just 1% to $7.5 billion in 2023.
The Conning study, "Managing General Agents: Ahead of the Pack" details MGA marketplace dynamics, trends, participants, and outlook. It includes analysis of the growing fronting market and findings from Conning's 2023 proprietary survey of MGA executives and insurers.
Commentary/Opinion
Insur.Tech.Talk: Insurtech Insights x Anil Vasagiri, Head of Property Solutions, Swiss Re - Modern Insurance
In celebration of Swiss Re’s newfound acquisition of Fathom, Megan Kuczynski, President of Insurtech Insights, sat down with Anil Vasagiri, Head of Property Solutions at Swiss Re, to consider how this will expand their offering and improve client solutions.
InsurTech/M&A/Finance💰/Collaboration
Charlie.ai and Duck Creek Form Strategic Partnership
The collaboration will integrate Charlee.ai’s AI technology into Duck Creek Claims to help insurers make more informed decisions, streamline claims processing and reduce costs.
Charlee.ai (Pleasanton, Calif.), a provider of AI-based predictive analytic solutions, and Duck Creek Technologies(Boston), a prominent provider of SaaS core systems for the insurance industry, have joined forces in a solution partnership to enhance claims management processes through cutting-edge predictive analytics.
The collaboration will integrate Charlee.ai’s AI technology into Duck Creek Claims, a claims management solution offered by Duck Creek Technologies. By infusing AI capabilities into Duck Creek Claims, insurers will benefit from enhanced predictive analytics, empowering them to make more informed decisions, streamline claims processing, reduce costs, and ultimately improve customer satisfaction, according to a Charlee.ai statement.
“Partnering with Duck Creek Technologies presents an exciting opportunity to continue revolutionizing claims management within the insurance industry,” comments Sri Ramaswamy, founder and CEO, Charlee.ai.
“Our AI-driven predictive analytics enables insurers to proactively identify claims trends, assess risks more accurately, and optimize claims handling processes, leading to improved operational efficiency and customer experiences.”
Meet Connected Insurance: Fleet Optimization - 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 Connected Insurance, and delve into the depth of their journeys, challenges, and cutting-edge technologies through in-depth interviews.
GeoX partners with Sompo Japan to develop AI-based automated underwriting platforms - Insurtech Israel News
GeoX, a leader in supplying geospatial data to insurers, has partnered with Sompo Holdings Inc., Sompo Japan Insurance Inc., and Sompo Risk Management Inc., specialty providers of property and casualty insurance and reinsurance with operations in the U.S. and 80,000 employees in 228 cities in 30 countries.
This partnership will support Sompo Japan as it develops an automated underwriting methodology utilizing state-of-the-art AI technology.
In recent years, advances in geospatial data technologies such as higher resolution and 3D satellite imagery have led insurers to use data in ways they had not previously considered. By combining GeoX’s ground-breaking technology with Sompo’s significant expertise and established global distribution networks, this partnership will fuel digital transformation within the insurance industry while enhancing customer experience.
GEICO Partners with AsTech to Use Rules Engine on Pre/Post Diagnostic Scan Reimbursement for ARX Shops
In an email to GEICO Auto Repair Xpress (ARX) direct repair facilities, the third-largest private passenger auto insurance company in the U.S. announced a new partnership with asTech that the insurer will use to standardize pricing and speed approvals for diagnostic, programming, and calibration operations.
Under the new initiative GEICO ARX facilities can speed reimbursement for OEM and “OEM-compatible” scans based upon the use of the asTech Rules Engine to identify the appropriate scan for the vehicle.
“Over the past several years, and with the advent of new technologies in vehicles the frequency of the need to diagnose, program and calibrate vehicles has increased to ensure all advanced systems are functioning correctly after repairs,” GEICO said in the shop communication.
“As dealers, sublet vendors and in-house calibration and scanning systems have worked hard to ensure these needs are met, a variety of price points have emerged and the complexity of tracking price points depending on vendor and calibration type has created some challenges in estimating.”
“To address these challenges, GEICO is happy to announce that we have reached an agreement with asTech to standardize pricing and reduce friction for diagnostic, programming, and calibration operations,” GEICO continued.
People
Dr. Yael Benvenisti Joins InsurTech Israel - Insurtech Israel News
InsurTech Israel announced that Dr. Yael Benvenisti has joined their team. The company noted that, Dr. Benvenisti brings with her extensive experience in the fields of longevity and investments, having previously served as the CEO of Israel’s largest investment fund in this area. Yael is considered a world-renowned expert and is a significant addition to our team, poised to lead major initiatives for the benefit of our startups and business partners globally.
In recent years, the Israeli InsurTech ecosystem has been growing at an impressive rate, particularly since October. In the first quarter of 2024, our startups raised over $100 million. Kobi Bendelak, CEO of InsurTech Israel, notes, “Dr. Benvenisti is a significant enhancement to our team and the ecosystem. Her joining InsurTech Israel is expected to further boost our activities and the Israeli InsurTech ecosystem, adding new dimensions to the insurance and InsurTech world, particularly in the areas of longevity innovation, health, health promotion, and wellness, which the international insurance industry has been strongly focusing on over the past year.”
Dr. Yael Benvenisti added, “I am thrilled to join the impressive activities that have flourished here in Israel, making the Israeli InsurTech ecosystem a global leader in the industry. I look forward to working with the team to continue advancing the field and bringing innovation to the insurance sector.”
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