OEMs & Auto Insurance
Senators call for investigation of sale of driving data to brokers
Senators call on Federal Trade Commission to investigate automakers' sale of driving data to brokers
Two U.S. senators are calling on the Federal Trade Commission to investigate automakers selling customers' driving data to brokers who package it and then sell it to insurance companies.
In a letter to FTC Chairwoman Linda Khan, Democrats Ron Wyden of Oregon, and Edward Markey of Massachusetts allege that General Motors, Hyundai, Honda and perhaps others are sharing drivers' data, such as sudden braking and acceleration.
The automakers, the senators said in a statement Friday, used deceptive tactics to manipulate customers into signing up for disclosure of the data to brokers.
After reading a report in The New York Times, Wyden's office looked into the three automakers and found that they shared data with broker Verisk Analytics. In the letter to Khan, the senators wrote that all three automakers confirmed disclosure of the data. GM also confirmed that it disclosed customer location data to two other companies that the automaker would not name, the letter said.
Verisk used the data to prepare reports on driving-behavior history and sold them to insurance companies, the letter said. Some automakers may have deceived customers by advertising data disclosures as a way to reduce insurance bills, without telling them that some insurers could charge more, the senators wrote.
“If the FTC determines that these companies violated the law, we urge you to hold the companies and their senior executives accountable,” the senators wrote to Khan.
Automakers Sold Drivers' Data for Shockingly Low Amounts of Money
GM, Honda, and Hyundai all sold data to Verisk, according to a letter two U.S. senators sent to the Federal Trade Commission.
- A letter to the Federal Trade Commission from two U.S. senators explains that automakers sold drivers' data for a shockingly low amount.
- The letter marks an escalation from a New York Times report that was published in March of this year.
- The letter from the senators focuses on GM, Honda, and Hyundai because all three sold data to Verisk, according to the initial NYT report.
Verisk paid Honda $25,920 over four years for information about 97,000 cars, amounting to just 26 cents per car. Hyundai was paid just over $1 million for data on roughly 1.7 million cars over a six-year period, totaling 61 cents a car.
Car and Driver
News
Nationwide announces layoffs to property and casualty division
Nationwide is joining the list of insurance companies that are cutting its workforce.
The Columbus-based company said it's reducing the workforce in its property and casualty division, but wouldn't give a specific number of people who will be laid off.
In a statement, Nationwide said the property and casualty division, along with some of its supporting functions, including technology, will operate with fewer positions.
"This is due to a variety of factors including associates voluntarily moving to other roles within and outside Nationwide, not filling open roles when possible, slowing business in underperforming lines, and operating model changes," the company said.
Nationwide said the changes will reduce its headcount by about 5% over the next year, but wouldn't speculate on the total number of job impacts.
The company added that the layoffs do not impact Nationwide's financial services business lines.
Bill LaFayette, owner of Regionomics who studies local economic trends says Nationwide’s announcement is concerning for the local economy.
Department of Justice Sues National General for Falsely Placing Insurance on More Than 650,000 Financed Vehicles
Alleges insurance was placed on vehicles financed by Wells Fargo even though borrowers already had insurance from other carriers.
The United States has filed a civil complaint under the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA) against National General Holdings Corp. and its subsidiaries alleging that, for over a decade, National General erroneously force-placed its Collateral Protection Insurance (CPI) product on vehicles financed through Wells Fargo, despite borrowers already having insurance through other carriers.
“Companies must deal fairly and honestly with consumers,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “Today’s lawsuit demonstrates that the department will use all of the tools at its disposable to protect the American public against deceptive and fraudulent business practices.”
“Today’s complaint alleges a long-running scheme to defraud hundreds of thousands of car buyers,” said U.S. Attorney Eric G. Olshan for the Western District of Pennsylvania. “For years, these defendants saddled ordinary Americans, including residents of this district, with allegedly unnecessary insurance, leading to dire real-world consequences like repossessed vehicles and other unwarranted collection activities. This enforcement action reinforces an important message: our office, together with our law enforcement partners, will take decisive action to combat fraud in the insurance industry, protect consumers and hold companies accountable for their wrongdoing under federal law.”
Personal Auto Driving P/C Insurers to 2024 Underwriting Profit
S&P Global Market Intelligence is forecasting a combined ratio of 99.2 for the U.S. P/C insurance industry overall in 2024, signifying a return to underwriting profitability for the first time since 2021.
According to the analysis, private passenger auto insurance is expected “to make a dramatic return to underwriting profitability,” with S&P GMI projecting a personal auto 2024 combined ratio of 98.4, down from 104.9 in 2023 and 112.2 in 2022. With personal auto representing almost 35 percent of overall P/C insurance industry premiums written, that turnaround is what will drive the overall underwriting profit for the industry, according to S&P GMI projections presented in the “S&P Global Market Intelligence 2024 U.S. P&C Insurance Market Report” published late last week.
The combined ratio for the industry overall will drop 2.5 points to 99.2 from a level of 101.7 in 2023, and improve a bit more to 99.0 in 2025, the report shows.
Tesla Blasts Off to Top P/C Insurance Growers Chart
While personal lines insurers reported double-digit rates of direct premiums written growth in 2023, some relative newcomers to the segment—including Tesla Insurance—saw triple-digit leaps although their volumes of business remained small, according to S&P GMI.
In the “S&P Global Market Intelligence 2024 U.S. P&C Insurance Market Report” published late last week, S&P GMI analysts delivered projections of premium growth and underwriting profits for the industry and for selected personal and commercial lines. In addition, one page of the report displays charts of the 15 “Fastest Growing P/C Writers” based on direct and net premium growth rates recorded for 2023.
MAPFRE RE sees premiums grow 5.5% in H1 2024 - Reinsurance News
MAPFRE RE, the reinsurance arm of Madrid-headquartered insurer MAPFRE, has reported that premiums, which include the reinsurance and global risks businesses, increased by 5.5%, reaching over €4.3 billion, in the first half of 2024.
Of the €4.3 billion in premiums, the company noted that €3.3 billion came from the reinsurance business, while over €1 billion came from the firm’s global risks business.
The reinsurers combined ratio also reached 95.1%, which was supported by the recovery of tariffs, especially catastrophic covers.
MAPFRE RE also noted that the most relevant event for the firm in H124 was the flooding in the Rio Grande do Sul region in Brazil, which had a €41-million net impact on the Group’s attributable result.
The net result reached €139.5 million, climbing 15.4% from the previous year’s €120.9 million, which included €119 million from its reinsurance business and €20.5 million from the global risks business.
Meanwhile, the reinsurers parent, MAPFRE reported that total premiums grew 5.5% in H124, surpassing €15.1 billion, and improving from last year’s €14.3 billion.
InsurTech/M&A/Finance💰/Collaboration
Cowbell secures $60m Series C from Zurich for SMEs cybersecurity boost - Reinsurance News
Cowbell, a provider of cyber insurance for small and medium-sized enterprises (SMEs), has announced the closure of a $60 million Series C equity round funded by Zurich Insurance Group (Zurich), a global multi-line insurer.
With this $60 million investment, Cowbell plans to enhance its operations to accommodate growing demand, increase its footprint in key international markets, improve its cyber resilience services, launch innovative products, and strengthen strategic partnerships.
By harnessing advancements in AI and Generative AI (GenAI), the company aims to upgrade its technological framework.
This will drive efficiency and support faster decision-making for policyholders and brokers across traditional, digital, and API-driven platforms.
Climate/Change/Sustainability/ESG
Thousands battle Western wildfires as millions under air quality alert
Wildfires across the western United States and Canada put millions of people under air quality alerts on Sunday as thousands of firefighters battled the flames, including the largest wildfire in California this year.
The so-called Park Fire had scorched more than 550 square miles (1,430 square kilometers) of inland Northern California as of Sunday morning, darkening the sky with smoke and haze and contributing to poor air quality in a large swath of the Northwestern U.S. and western Canada.
Although the sprawling blaze was only 12% contained, cooler temperatures and increased humidity could help crews battle the fire, which has drawn comparisons to the 2018 Camp Fire that tore through the nearby community of Paradise, killing 85 people and torching 11,000 homes.
10 Insurance And Climate Actions For 2024: Oliver Wyman
10 trends for insurers to consider
The sustainability agenda remains a complex area for insurers. While we expect many of the 2023 themes to persist in 2024, the challenges around strategy, transition planning, and reporting will only continue to increase, and the bar of stakeholder expectations continue to rise. With the need for climate adaptation and resilience finally on the mainstream agenda, and the accelerated focus on tangible actions in the real economy, the insurance industry cannot afford to deprioritize sustainability, notwithstanding the near-term implications of geopolitical unrest. We also anticipate that the growing focus on nature topics will ensure that it breaks through to the mainstream of board and management discussions. As ever, prioritization remains a challenge. Here, we suggest 10 major sustainability issues that should be at the top of every insurance executive’s list in 2024.
Anthony Bice, Robert Bailey, and Kerry Adams-Strump
How to Advise Clients Amid Record Storms | Insurance Thought Leadership
It is crucial to work with policyholders to help them understand their unique risk exposures to storms and to help them navigate that risk.
Mike Seiwert CSP, ARM is a senior loss control representative with Pennsylvania Lumbermens Mutual Insurance, the oldest and largest mutual insurance company dedicated to the wood products and materials industry.
AI in Insurance
Outlook Positive, AI Use on the Rise for Independent Agents, Says Nationwide
Despite challenges posed by inflation, market volatility and rapidly changing technologies, independent agents remain positive about their businesses and report more optimistic perceptions of national business conditions than in 2023.
The recent Nationwide Economic Impact Survey Report: Independent Insurance Agents Findings report found that 62% of agents gave a positive rating to the current business conditions in the U.S. overall, up from 41% in 2023. Outlook was very positive for individual businesses and agencies, with agents giving a 79% positive rating for 2024, up from 73% in 2023.
Data Privacy/Cyber Security
Insuring your online presence: Limitations on social media coverage
As social media continues to grow, businesses have turned to different platforms to promote their products. This advertising strategy can have unintended consequences, including copyright infringement claims, if businesses fail to take certain steps when sharing photos and videos to promote their product.
For example, many multinational music companies have filed lawsuits against brands for copyright infringement. Given the frequency of these claims, businesses may think that infringement and similar intellectual property claims are covered by their liability insurance policies. But that is not always the case.
The most common source of coverage is "Coverage B" in commercial general liability policies, which protects against claims alleging personal and advertising injury. Those claims can include allegations of libel, slander, invasion of privacy, copyright infringement, false arrest, and wrongful eviction. All policies are not created equal, however, and references to advertising or intellectual property rights may not actually lead to coverage for social media missteps involving alleged infringement. As a result, it is important for an insured to understand the coverage afforded under their CGL policies and additional coverage options that may provide broader coverage.
There are several common limitations on coverage that may come into play for claims involving social media.
Geoffrey B. Fehling, partner, insurance coverage group, Hunton Andrews Kurth | Torrye Zullo, associate, insurance coverage group, Hunton Andrews Kurth
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