Research
The states with the most expensive car insurance, mapped
The cost of car insurance is hitting high water marks nationwide, though drivers in some states are feeling the pain more than others.
Why it matters: Fast-rising insurance rates are contributing to a transportation affordability crisis, especially in the many parts of the country where people have few alternatives to car ownership.
- And they come alongside all sorts of other rising consumer costs in recent years — like that of groceries, for example.
Driving the news: The nationwide average annual cost of full-coverage car insurance hit $2,329 in June, per Insurify, a digital insurance agent that helps users collect quotes from multiple insurers.
- That's up from $1,601 in January of 2021.
Zoom in: Rates are highest in Connecticut ($3,598), Maryland ($3,400) and South Carolina ($3,336), while they're lowest in New Hampshire ($1,000), Maine ($1,209) and North Carolina ($1,403).
Alex Fitzpatrick, Alice Feng. Axios and Insurify
News
Florida's state-backed Citizens property insurance is seeking 13.5% rate hikes
Florida regulators Thursday dug into a proposal that would lead to double-digit rate increases for customers of Citizens Property Insurance Corp., as the state insurer of last resort continues trying to push policies into the private market.
The Florida Office of Insurance Regulation, which would have to sign off on increases, held a three-hour hearing on the proposal, which in part would lead to an average 13.5 percent rate increase for the most-common type of Citizens policy, known as homeowners' multi-peril coverage.
That would translate to the average price of homeowners multi-peril policies going from $3,560 to $4,041, said Brian Donovan, chief actuary for Citizens.
Other types of policies would see varying increases, but all averages would be in double digits. For example, condominium-unit owners would see an average 14.2 percent increase for multi-peril coverage. The hikes would take effect in 2025.
The hearing put on display longstanding tensions surrounding Citizens' rates, as many homeowners struggle to find affordable coverage — or any coverage — in the private market. Meanwhile, Citizens says it typically charges lower rates than private carriers, which effectively creates a disincentive for property owners to turn to the private market.
"We certainly don't take our request for a rate increase lightly," Citizens President and CEO Tim Cerio said during the hearing. "We know that Citizens customers themselves are just like everyone in the private market. Nobody wants to face a rate increase.
Geico Lays Off Close to 10% of IT Staff
The latest round of job cuts began Thursday and is part of the carrier's restructuring efforts.
Geico has eliminated close to 10% of its technology employees in a new round of cuts that began Thursday as the auto insurance giant continues to restructure key parts of its business, according to people familiar with the situation.
The job cuts affected IT analysts, software engineers, developers and engineering managers, sources said. In a town hall meeting with employees, CTO and CIO Hari Govind said the insurer would be divesting from legacy IT systems and investing in new emerging technologies such as artificial intelligence, cybersecurity and data analytics.
"We continue to review and adjust our company needs and resources to respond to an ever-evolving insurance and business landscape," Geico said in a statement.
Commentary/Opinion
Riding the Insurance Roller Coaster
Over the past four years the P&C industry, among others, fits the roller coaster analogy perfectly. And that is an understatement.
So, buckle up. The roller coaster ride is far from over.
COMPLETE ARTICLE as published on InsurTech Consulting Insurance & Insurtech Blog.
by Alan Demers and Stephen Applebaum
InsurTech/M&A/Finance💰/Collaboration
Ryan Specialty announces $1 billion deal, reports results
Ryan Specialty Holdings Inc. said Thursday it has agreed to buy builders risk specialist US Assure Insurance Services of Florida Inc., which does business as InsuranceLink, for up to $1.48 billion.
The announcement came as the specialty intermediary announced a nearly 20% increase in second-quarter revenue.
Ryan Specialty will pay $1.08 billion for US Assure and up to $400 million more in performance-based consideration. The deal is expected to close on Sept. 1.
Climate/Change/Sustainability/ESG
Hurricane Debby threatens to flood eastern U.S. after hitting Florida | PropertyCasualty360
As much as 12 inches of rain is forecast to fall across a wide area from northern Florida to North Carolina this week.
Hurricane Debby threatens to unleash days of heavy rain and flooding along the Eastern Seaboard of the U.S after slamming into Florida near Tallahassee, knocking out power to thousands.
As much as 12 inches of rain is forecast to fall across a wide area from northern Florida to North Carolina this week as Debby meanders around the South, inundating roads, damaging crops and likely driving people from their homes. Some parts of Georgia and the Carolinas may get 30 inches before the storm ends, the U.S. National Hurricane Center said.
“This potentially historic rainfall will likely result in areas of catastrophic flooding,” the hurricane center said in an advisory. “This will likely result in areas of considerable flash and urban flooding, with significant river flooding expected.”
Debby’s top winds dropped to 75 miles (121 kilometers) per hour, just at the threshold for hurricane strength, as it moved northeast about 60 miles from Cedar Key, Fla. The storm has already cut power to more than 250,000 customers across the northern part of the state, according to PowerOutage.us. It’s also grounded over 890 flights around the U.S., said FlightAware, an airline tracking service.
Brian K. Sullivan
‘Impossible’ Weather Increasingly Blamed on Climate Change
Today may be the day when the impossible becomes possible—based on the number of headlines in recent days saying pretty much that.
A slew of recent articles this week focus on studies and research reporting on how unlikely the weather, extreme weather in particular, is without a changing climate.
Several articles keyed in on the international attention focused on the sweltering Olympics:
Don Jergler, Editor of Claims Journal, West Editor of Insurance Journal
Financial Results
Berkshire Hathaway's re/insurance businesses deliver $2.3bn net underwriting result for Q2'24
Berkshire Hathaway, the Warren Buffett-run holding company and conglomerate, has achieved an 82% year-on-year rise in net underwriting earnings across its insurance and reinsurance businesses for the second quarter of 2024, as the firm’s property and casualty (P&C) reinsurance operation again generated more than $1 billion in underwriting profit.
Within P&C reinsurance, premiums written fell 5.4% in the second quarter to $5.6 billion as a result of reductions in property, while premiums earned increased 5.3% to $5.6 billion.
Turning to GEICO, Berkshire’s auto insurer, and pre-tax underwriting earnings increased significantly year-on-year to $1.786 billion in Q2 2024, reflecting higher average premiums per auto policy, lower claims frequencies, and improved operating efficiencies. Premiums written grew by almost 11% to $10.5 billion, reflecting an increase in average written premiums per auto policy of 11.3%.
AXA reveals earnings and plan to exit one business line
AXA has published its earnings report for the first half of 2024, revealing a strategic decision involving one of its business lines.
Lifting the lid on the numbers, AXA chief executive Thomas Buberl said: “We have delivered strong growth across all lines of business, leveraging the attractive positioning of our franchise and a positive initial contribution from growth initiatives. P&C revenues were up 7%, with continued good demand, notably in commercial lines, and positive pricing dynamics across all lines.
“Life & health premiums were also up 7%, including targeted growth in employee benefits. The planned acquisition of Nobis announced today (August 1) is expected to further strengthen our P&C retail franchise in Italy, including the expansion of our distribution network, which is one of the key levers of our strategy.”
Buberl was referring to the deal to purchase Gruppo Nobis, which posted €35 million in net income last year. Meanwhile, in his comments, the CEO also cited the company’s plan to offload its asset management operations.
AI in Insurance
How autonomous AI can expedite commercial-insurance underwriting
Autonomous AI assistants are coming. Here are four ways insurance organizations can begin using this tech right now.
Autonomous AI assistants are the next evolution of generative AI as this technology can take on distinct personas, self-learn and self-correct.
While AI assistants can benefit the entire insurance lifecycle, they are having a significant impact on underwriting.
There are often capacity challenges for underwriting teams, especially in commercial lines. Deep and intuitive underwriting proficiency requires a specialized skillset, and training professionals in risk evaluation takes time. However, autonomous AI assistants can help to reduce the talent gap as they can be trained as reliable resources on many task-oriented underwriting processes, freeing underwriters up to focus on more complex risk analysis, workflows and priorities.
Implementing AI assistants into underwriting workflows may raise some questions at first. Will these assistants disrupt existing workflows? How will underwriters manage and interact with them? Can their output be trusted?
Insurers should think of AI assistants as well-qualified interns. As a starting point, underwriters can train them to take on simple roles and tasks and then progress to more elaborate assignments. AI assistants can learn to perform tasks quickly and accurately while self-learning as they execute their assignments.
What follows are four ways insurance organizations can begin using role-based AI assistants in their underwriting processes right now to help commercial underwriting teams and boost their capacity.
By Sathish Kumar Manimuthu
Legal System Abuse/Social Inflation
The right way to reduce Arizona’s insurance costs
As Arizonans, we’ve all felt the sting of rising insurance premiums in recent years, whether it’s our homeowner policies or auto coverage. The numbers are startling. Since 2019, homeowner premiums in our state have surged by over 60%, while nationwide auto insurance rates have climbed more than 40%. In metro Phoenix alone, the average household shells out about $2,770 annually for car insurance, a hefty $226 more than the national average. These increases are not just statistics – they hit our wallets hard and demand a closer examination of their causes.
Prominent Democrats, including those in the White House and on Capitol Hill, have voiced concerns about the role of insurers in these significant price increases. However, this is a complex issue with various contributing factors. Let’s look beyond the political discourse and examine the economic realities that underpin these rising costs.
J.D. Hayworth represented Arizona in the U.S. House of Representatives from 1995 until 2007, and is owner of The Great 48th Group LLC, a communications and public policy consultancy..
Demotech, Inc. Unveils Critical Findings on Impact of Tech-Enabled Insurance Claim Instigation on the Transportation and Logistics Sector
Incorporated in 1985, Demotech, Inc. (Demotech) is a leading financial analysis firm serving the Property and Casualty, Life and Health, and Title insurance sectors. In July 2022, Demotech became the tenth firm to be registered with the U.S. Securities and Exchange Commission as a nationally recognized statistical rating organization (NRSRO) in the class of insurance companies, joining AM Best, Fitch, Moody's, and Standard & Poor's.
While proud of this significant milestone, Demotech's 2022 discovery of a covert practice by unscrupulous lawyers targeting insurers marks a defining moment. Demotech research conducted with Todd Kozikowski exposed troubling trends that we are comprehensively detailing today.
We observed a sharp rise in claims litigation against certain insurers that had ceased writing new business, shed policies, or reduced underwriting. The growth exceeded what was expected due to rampant lawyer advertising, prompting us to engage Mr. Kozikowski, an expert in data analytics and artificial intelligence, to explore the potential role of technology in this phenomenon.
Our research revealed the "tech-enabled claim instigation" business model: a combination of search engine optimization (SEO), litigation marketing, litigation analysis platforms, and litigation financing aimed at originating contested claims. The model heavily targets the transportation and logistics sector and commercial automobile liability insurance providers.
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