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![It's Time to Get Back to Basics](https://dxj7eshgz03ln.cloudfront.net/production/link/image/839473/twenty_by_nine_extra_large_9c961456-1fef-44f5-b3a3-41c44eadb5ad.jpeg)
It's Time to Get Back to Basics
My friend Adrian last month shared a McKinsey deck from 1993. (You can find it here.) One of the last paragraphs of the 38-page paper says: "These principles are obvious. Why do so few companies follow them? Because the senior management commitment required is substantial while the payoff is down the road." That line has aged really well!
It is a pity for an insurer not to use data and technology to do their job better nowadays. All the insurers (that survive) will be #insurtech: meaning players using technology as the key enabler for achieving their strategic goals. So, let's take a look at the current state of insurtech to see why you should focus your innovation efforts on the basics of the insurance business.
Since the beginning of the year, we have seen a new report almost once a week about the 2022 funding to insurtech startups:
- FT Partners
- Gallagher Re
- CB Insights
In a nutshell, be more like HDVI and less like Root.
Matteo Carbone, founder and director of the Connected Insurance Observatory
Building connected insurance starts with customer-focused innovation
Connected insurance is primed for massive growth during the next decade, with telematics adoption leading the way. The global automotive embedded telematics market is anticipated to reach $87.3 billion by 2030. As insurers race to integrate telematics and IoT into their connected insurance offerings, it can be easy to lose focus on what really matters to customers.
INNOVATION AS A COMPANY VALUE
USAA was founded 100 years ago and is by definition an innovative company. “USAA started when 25 military officers came together because they weren’t supported in the proper ways by traditional insurance companies,” says Luke Harris, VP of Innovation at USAA. “As one of the very first military focused startups, that innovation has carried forward throughout our history, with nearly 1,000 patents developed by employees. Innovation is embedded in USAA.”
USAA’s recommendations for connecting with customers on connected insurance include:
Embrace the company’s inherent culture of innovation
Create solutions to solve business problems and member needs
Learn from all sides of the business
Engage insureds via education and preparation to minimize risk from catastrophic events
![Auto Insurance Customers With Poor Credit Pay up to 60% More](https://dxj7eshgz03ln.cloudfront.net/production/link/image/839279/twenty_by_nine_extra_large_ed728a34-89e3-4117-845e-ff59364a3f56.jpg)
Auto Insurance Customers With Poor Credit Pay up to 60% More
AutoInsurance.org recently released its list of the 12 most significant factors that affect auto insurance. While most people aren't surprised to read that a driver's history of accidents and traffic violations made the list, many did expect to see that credit score matters as much as it does.
According to the report, a low credit score could result in up to 60% higher car insurance rates. With that much at stake, insurance policyholders should look for ways to improve their credit.
According to AutoInsurance.org, a low credit score could result in up to 60% higher car insurance rates.
Melanie Musson, a nationally recognized car insurance expert with AutoInsurance.org, shares, "It's unlikely an insurer will run a policyholder's credit once their policy is established. Since credit score significantly impacts rates, the policyholder should request an updated credit report check."
Electric vehicles the next breakthrough for usage based insurance?
In 2022, more than 10.5 million battery electric vehicles were sold worldwide.
Driven by momentum on commercial-vehicle decarbonization as well as government policies, we estimate that global electric vehicle sales will reach 34 million in 2030, with around a 36% penetration rate of vehicles sold.
Although electric vehicles have great market potential, the higher auto insurance for electric vehicles pushes up the total cost of ownership, which has increased customers’ concerns about electric vehicles to a certain extent. According to Forbes, insuring an EV costs about $100 more per year than its internal combustion engine equivalent for the most popular models. Luxury electric vehicle owners, such as Tesla owners, are even being turned down by insurers due to high collision coverage costs, which is partially why Tesla invented developing insurance on their own.
PTOLEMUS Consulting Group report
![The Growing Cost of Wildfires: Getting Ready for Forest Fire SeasonThe Growing Cost of Wildfires: Getting Ready for Forest Fire Season](https://dxj7eshgz03ln.cloudfront.net/production/link/image/839474/twenty_by_nine_extra_large_fe6ffcc2-4862-4a8a-bb87-615dc8a9a685.jpg)
The Growing Cost of Wildfires: Getting Ready for Forest Fire SeasonThe Growing Cost of Wildfires: Getting Ready for Forest Fire Season
Wildfire seasons are getting longer and more destructivec and are a growing concern for everyone. Insurance companies are no exception. Since wildfire records began in 1983, there has been a 223% increase in wildfires, according to the National Interagency Fire Center. In 2022 alone, there were 68,988 wildfires in the U.S. compared to 58,985 in 2021, a 16.96% increase. Wildfire seasons are getting longer and more destructive, according to CoreLogic, with the annual destruction of wildfires during the last 10 years at an average of 6.8 million acres, compared to 2.7 million acres between 1983 and 1992. These fires are a growing concern for everyone, and insurance companies are no exception.
2020 was one of the costliest in history, with wildfires causing $16.5 billion in damages. This not only impacts government bodies and utility companies who are responsible for repairing damages to infrastructure, but it also impacts homeowners in high-risk areas. This continues to have an effect on insurance everywhere.
Digital twins can empower insurers to overcome the climate crisis
As natural disasters continue to sweep the globe, climate change brings increasingly unpredictable and damaging weather patterns that insurers must battle to ensure profitable yet competitive underwriting.
Throughout 2022 in the United States alone, there have been 15 weather-related climate disasters with losses exceeding $1 billion each. This is the eighth consecutive year in which the U.S. has endured ten or more billion-dollar disaster events, which have included drought, flooding, severe storms, tropical cyclone events, and wildfires. The National Oceanic and Atmospheric Administration estimates that damage costs from weather and climate disasters in 2022 could exceed $100 billion.
How can insurers stay one step ahead in this chaotic, destructive and temperamental risk landscape? They must use advanced technologies to undertake a risk management approach that encompasses inevitable yet turbulent hyper-scale events.
Chubb introduces Chubb Climate+
Chubb announced the name for the new global climate business unit the company launched last month: Chubb Climate+. In addition, Chubb announced the appointment of three executives who have joined the business unit’s leadership team.
Chubb Climate+ will provide a full spectrum of insurance products and services to businesses engaged in developing or employing new technologies and processes that support the transition to a low-carbon economy. The business unit also provides risk management and resiliency services to help those managing the impact of climate change.
InsurTech/M&A/Finance💰/Collaboration
Root Books Another Loss; Stays Positive on Embedded Insurance
Calling embedded insurance the “next secular trend in distribution,” Root Inc. CEO Alex Timm in a letter to shareholders said the company has an advantage to scale access in the channel and become profitable.
Root reported a net bottom-line loss of $58.3 million for fourth-quarter 2022, an improvement over a net loss of about $110 million during the same period in 2021. For all of 2022, Root recorded a net loss of about $298 million compared with a net loss of about $521 million in 2021.
However, Timm said the InsurTech is positioned for profitable growth in new writings and continued improvements in loss ratios. The company’s fourth-quarter combined ratio clocked in at about 180, which is an improvement over combined ratios of about 185 and 217 for the third and second quarters of 2022, respectively. The Q4 2021 combined ratio was about 212.
![Socotra launches CorePlus line of end-to-end insurance IT solutions, powered by Socotra Connected Core and Socotra App MarketPlace](https://dxj7eshgz03ln.cloudfront.net/production/link/image/839570/twenty_by_nine_extra_large_80c783ea-a10a-481b-97db-2d9e073a74ee.jpg)
Socotra launches CorePlus line of end-to-end insurance IT solutions, powered by Socotra Connected Core and Socotra App MarketPlace
Socotra today announced the launch of Socotra CorePlus™, a line of complete insurance IT solutions composed of Socotra Connected Core, seamlessly integrated via Socotra App MarketPlace with industry-leading software and data providers, including Mendix, Snapsheet, and Stripe. Socotra CorePlus is designed to decrease risk and costs, while increasing speed-to-market and standardization.
“Snapsheet, like Socotra, is deeply invested in giving customers the best experiences possible”
“The needs of today’s insurers have far outstripped what any one vendor can provide,” said Dan Woods, Founder and CEO of Socotra. Socotra CorePlus delivers a line of end-to-end insurance IT solutions from the industry’s leading technology providers. Insurers gain control of their business and increase their competitiveness through the agility that Socotra CorePlus provides.”
Two Sigma Insurance Quantified and SambaSafety Partner to De-Risk Doctored MVRs for Commercial Auto Underwriting
Two Sigma Insurance Quantified (TSIQ), a leading underwriting technology company for the commercial property and casualty industry, today announced a partnership with SambaSafety, the market leader in driver risk management technology. The partnership makes SambaSafety’s suite of driver intelligence data available to users of TSIQ’s leading-edge underwriting workbench, SubmissionIQ.
With the integration now live, underwriting teams utilizing the SubmissionIQ workbench have the ability to access a comprehensive set of SambaSafety data, including current and historical motor vehicle records (MVRs), traffic court data, aggregated telematics data and more. Available through a direct API connection, the combined power of this partnership allows teams to proactively validate drivers, combatting any attempt at disguising data and providing underwriters with a better picture of driver riskiness in order to capture the accurate premium reflective of the exposure.
“Partnering with best-in-breed data providers like SambaSafety is a central tenet of TSIQ’s commitment to supply critical data to underwriting teams earlier in the process to make informed decisions,” said Michael Tessalone, CFO and Head of Corporate Development at Two Sigma Insurance Quantified. “In the commercial transportation industry, doctored MVRs and other types of fraud are an unfortunate reality. The ability to detect that type of activity early is critical to accurately evaluating submissions and preventing unnecessary risk to the firm.”
![Origami Risk Gains Momentum in New Aite-Novarica Report on P&C Policy Administration Systems](https://dxj7eshgz03ln.cloudfront.net/production/link/image/839601/twenty_by_nine_extra_large_0fa38dc2-0bce-4a73-a6f7-c35d5b213a7b.jpg)
Origami Risk Gains Momentum in New Aite-Novarica Report on P&C Policy Administration Systems
Origami Risk, the industry-leading risk, safety, and insurance Software as a Service (SaaS) technology firm, is rapidly gaining industry recognition for its multitenant core solutions policy administration capabilities for property & casualty insurance carriers, pools, MGAs, TPAs, brokers, and agents.
“Origami Risk has the momentum to be considered a ‘contender’ in the market and offers policy administration features on a SaaS multitenant platform, which is a plus for many buyers” -- Martina Conlon, head of P&C Practice at Aite-Novarica.
The new Aite-Novarica Property/Casualty Policy Administration Systems Report (compiled in February) groups Origami among “contenders,” a designation for providers with “substantial customer experience and momentum.” Origami Risk’s policy administration solution moved to the “contender” category from its position in the “new entrant” category in the previous (2021) report. This reflects the growth of Origami Risk’s P/C insurer client base and expanding market presence in the insurance industry.
![FinishMaster sold to LKQ Corp. through $2 billion Uni-Select acquisition - Repairer Driven NewsRepairer Driven News](https://dxj7eshgz03ln.cloudfront.net/production/link/image/839594/twenty_by_nine_extra_large_b4c72bec-9459-4f99-afec-04136f77efe8.jpg)
FinishMaster sold to LKQ Corp. through $2 billion Uni-Select acquisition - Repairer Driven NewsRepairer Driven News
Alternative and specialty parts giant LKQ Corp. will acquire Uni-Select in a deal valued at $2.1 billion, the corporations announced Monday.
In Canada, Uni-Select supports more than 16,000 automotive repair and collision repair shops and more than 4,000 shops through its automotive repair shop banners and automotive refinish banners. In the U.S. it’s better known for its subsidiary, FinishMaster.
“This acquisition further enhances LKQ’s global automotive vehicle parts distribution business,” Dominick Zarcone, LKQ’s president and chief executive, said in a release. “Uni-Select’s North American automotive refinish paint and mechanical parts distribution operations complement LKQ’s existing footprint and will allow us to distribute a broader array of products to our customers.”
![Insurtech Oyster covers high-end bikes, jewelry at purchase](https://dxj7eshgz03ln.cloudfront.net/production/link/image/839602/twenty_by_nine_extra_large_b8dc4a91-abe5-406e-990c-8ff5d2a7e934.jpeg)
Insurtech Oyster covers high-end bikes, jewelry at purchase
Insurtech Oyster Technologies co-founders Vic Yeh, Nikhil Kansal and Jonathan Patel had been software engineers and operations experts for financial technology providers and financial firms. They realized the rising consumer demand for modern checkout experiences across the board, and sought to create that for insuring valuable personal property, according to Yeh, CEO of the company.
"When you want to get insurance for your engagement ring or get insurance for e-bikes, for electronics and so on, typically, consumers have to call their insurance agents, add it to their homeowners policy, or do a tedious Google search post-purchase," he said. "That got us thinking about what this insurance would look like if it was redesigned."
Events
InsurTech Hartford Reveals Honorees of Inaugural Industry Influencer Awards Held at InsurTech Hartford Symposium May 2nd
InsurTech Hartford, a thriving community of InsurTech startups, investors, solution providers, agents and brokers, and insurance carriers, is pleased to announce the honorees of the organization's inaugural 2023 Industry Influencer Awards. The awards will be given as part of the opening ceremony at InsurTech Hartford Symposium 2023 held at the Mohegan Sun Casino and Resort on May 2-3 2023.
2023 honorees are being presented with the InsurTech Hartford Industry Influencer award in recognition for making waves and changing currents in the ocean of insurance. It recognizes each influencer's significant contributions toward driving industry innovation forward and making a substantial and positive impact on the industry.
"As an organization that values innovative thought leadership, it is a privilege for us to showcase these individuals, especially at our biggest event. It's important to recognize influencers who are driving a positive future and inspiring us to do better," said Stacey Brown, Founder of InsurTech Hartford.
Insurance AI and Innovative Tech USA 2023, 12–13 April, 2023 Marriott Marquis, Chicago, USA
Agile Technology. Advanced AI. Actionable Insights.
An unmatched opportunity for carriers is within reach. Yet the question remains - with each pillar posing its own challenges, can you achieve all three: tech enabled, AI fueled, and data driven insurance?
Keeping up isn’t enough. Lead with innovation to guarantee retention and growth. Unlock your teams’ capabilities or risk your customers moving to competitors.