News
Allstate makes massive $2 billion sale
Allstate Corp. has agreed to sell its employer voluntary benefits business to StanCorp Financial Group Inc. for $2 billion, with plans also underway to divest its individual and group health sectors. This move is part of a broader strategy to focus more intensely on its core personal liability and protection services.
Tom Wilson, the chairman, president and chief executive officer of Allstate, explained that the separation into distinct transactions for the three segments—employer voluntary benefits, individual health, and group health—aims to align these businesses with firms that can better utilize their growth potential. Originally, Allstate sought a single buyer but shifted strategy after market evaluation suggested more beneficial separate sales.
The transaction will see over 3.8 million customers of Allstate’s employer voluntary benefits continuing their services under Standard, which is StanCorp Financial’s brand. Moreover, Allstate agents will start offering a wider range of options to their clients through a five-year exclusive distribution deal with Standard.
This deal is set to provide a financial uplift for Allstate, projecting a book gain of about $600 million. Additionally, around $1.6 billion in incremental capital will be redirected to enhance market share in the personal property and liability sector
Aon reports dip in US P&C companies upgraded to ‘A’ by AM Best in 2023 - Reinsurance News
In 2023, Aon observed that only 6 out of 175 US Property and Casualty (P&C) companies were upgraded by AM Best from an “A-” to an “A” rating based on their own merit, which is below the 5-year average of 9 upgrades per year.
In the first half of 2024, only 2 companies received an upgrade from “A-” to “A” based on their own performance.
In 2023, just 1 company was upgraded from “B++” to “A-” based on its own performance, occurring in the latter half of the year. This is also below the 5-year average of 4 upgrades per year.
Aon reports that 6 companies were downgraded from “A-” to “B++” in 2023, slightly below the 5-year average of 7 downgrades per year. In the first half of 2024, there have already been 3 such downgrades.
From 2019 to 2024, 43 companies with an “A-” rating were given a Positive Outlook and later upgraded to “A.” The median duration under Positive Outlook was 1 year, with most upgrades occurring within 1-2 years. No company remained on Positive Outlook for more than 3 years.
During the same period, 27 “A-” companies were placed on Negative Outlook but later moved to a stable outlook without a rating change. Most of these companies remained on Negative Outlook for 3 years or less, though some experienced longer periods.
Florida welcomes ninth property insurance carrier since 2023
The Florida Office of Insurance Regulation (FLOIR) has approved Trident Reciprocal Exchange as the ninth new property insurance carrier to enter the state since 2023.
Trident received authorization on June 31 to write fire and homeowners multiperil policies, according to an order from Insurance Commissioner Michael Yaworsky.
This approval follows a series of legislative reforms aimed at stabilizing Florida's property insurance market, a report from AM Best said. After these reforms, Insurance Commissioner Yaworsky met with several insurance company executives to explore opportunities for expanding business in the state, according to a spokesperson from the insurance department
Companies such as Progressive Casualty Insurance Co, State Farm, AAA, and Kin Insurance Technology Hub LLC have expressed their commitment to Florida’s property market.
Research
Battery Electric Vehicle Collision Claims Continue to Rise Despite Sales Slowdown
Mitchell, an Enlyte company and leading technology and information provider for the Property & Casualty (P&C) claims and Collision Repair industries, today published its Q2 2024 Plugged-In: EV Collision Insights report. This edition features the latest U.S. and Canadian claims data on battery electric vehicles (BEVs), mild hybrid electric vehicles (MHEVs) and plug-in hybrid electric vehicles (PHEVs)—highlighting how differences in their complexity and construction are affecting claim costs and repair operations.
"Although BEV sales have slowed in 2024, sales of mild and plug-in hybrid automobiles remain strong," said Ryan Mandell, Mitchell's director of claims performance. "Like BEVs, these vehicles can be costlier to repair after a collision when compared to their internal combustion engine, or ICE, counterparts. However, with both an ICE and small electric battery, mild hybrids are remarkably similar to gasoline-only powered automobiles when it comes to claims severity."
In Q2 2024, average claims severity for repairable MHEVs was $4,726 in the U.S. and $5,302 in Canada. For vehicles with an ICE, it was $4,806 in the U.S. and $4,958 in Canada, a difference of $80 and $344, respectively. Since PHEVs rely on a larger, high-voltage battery in addition to a secondary ICE, their average severity is more closely aligned to BEVs at $5,059 versus $5,753 in the U.S. and $5,665 versus $6,534 in Canada.
Other notable findings in this quarter's report include:
Total Loss Frequency: The total loss frequency of BEVs and 2021 and newer gasoline-powered vehicles—which are comparable in their complexity and cost to repair—remains similar at 9.16% for BEVs in the U.S. versus 9.45% for ICE automobiles and 7.24% versus 8.52% respectively in Canada.
Repair Operations: Although BEV collision-damage estimates have a higher average number of mechanical labor hours than ICE appraisals (5.21% compared to 8.18%), they are less likely to include frame labor. Frame labor is added when technicians use a hydraulic frame machine to straighten both full ladder frame components and unibody structures. The lack of this labor type on BEV estimates could mean that their design is more effective at preventing crash energy from damaging the vehicle's structural components.
Parts Utilization: OEM parts continue to be used more frequently in the repair of BEVs, with 89% of the parts dollars on estimates for repairable BEVs being OEM parts as compared to 65% for ICE automobiles.
Fronting market to face more complexities despite strong reinsurance support – Conning
The fronting insurance market maintained its rapid growth in 2023 and into 2024, but the industry is also facing greater complexity, according to a new report by Conning.
The report, authored by Steven Webersen (pictured above), managing director in Conning's Insurance Research unit, highlights that the fronting business has become more challenging to manage and analyze due to several factors.
These include a growing reliance on reinsurance, dependence on multiple third parties, a shift toward higher premium retention, and an increased need for capital.
Webersen observed that while fronting companies are maturing and demonstrating improved earnings, they are also experiencing higher leverage. Many companies continue to have significant concentration among their customers and reinsurance partners.
The report delves into the use of reinsurance and the role of key business partners, noting that fronting companies benefit from strong reinsurance support and are becoming increasingly important to reinsurers.
Mergers and acquisitions within the fronting sector appear to be on hold, possibly due to a valuation gap between buyers and sellers and a more rigorous due diligence process.
Webersen said that fronting companies have been able to grow at a rapid pace, driven in part by the growth of the underlying managing general agent (MGA) market. However, he cautioned that the proliferation of fronting could slow down, potentially leading to market consolidation.
Commentary/Opinion
How auto insurers are leveraging advanced data scoring to provide more customized rates
Today’s automotive and auto insurance industry continues to evolve, driven by the integration of advanced data, analytics and data scoring technologies. This shift is enabling insurance companies to offer more personalized, affordable and fair insurance rates to their customers.
By harnessing vast amounts of data and employing sophisticated analytical strategies, insurers can better assess risk, predict customer behavior and tailor their offerings to meet individual needs. This deeper level of data technology is reshaping the landscape of auto insurance and helping insurers offer the best quote possible.
According to a June 2024 Forbes Advisor article, the cost of auto insurance increased by 63.8% between 2014 and 2023. With these rising costs, insurers must find a way to leverage data to score and price policies more competitively as car insurance costs continue to rise.
Furthermore, with the increased proliferation of electric cars and trucks on the roads, insurers are paying close attention to how they price premiums for electric vehicle drivers. A June 2024 analysis by the Wall Street Journal found monthly EV premium insurance costs to be on average 12% higher compared with gas-powered vehicle rates.
Bob Homer is vice president and general manager of insurance, Equifax
Retentions still holding, current P&C market sentiment to persist: Althoff, Hannover Re
Sven Althoff, Member of the Executive Board for P&C at Hannover Re, said today that the global reinsurer is not expecting a change in P&C market sentiment despite another active period for catastrophe losses, notably from secondary perils.
This morning, reinsurer Hannover Re announced a very strong set of results for the first half of 2024, including P&C revenue growth of 9% to €9.1 billion, despite expenditure for large losses hitting €588 million, driven by flooding around the world and civil unrest in New Caledonia.
According to industry estimates, natural catastrophe losses again exceeded $60 billion in the first half of this year, with secondary perils, notably severe convective storms and flooding, contributing heavily.
While insured losses from natural disasters continued to be elevated through the first half of 2024, reinsurers worked to secure tighter terms and conditions throughout 2023, and the now higher attachment points means that primary insurers are retaining a greater share of losses than in the past, particularly when they come from frequency type events.
AI in Insurance
Ascend Launches AI-Powered Automated Invoicing
Ascend, the leading financial operations automation platform for insurance businesses, announced today the launch of its Automated Invoicing (AI) feature, designed to simplify and improve the invoicing process for insurance agents. Ascend's users can now upload any document into Ascend and leverage AI to automatically read and process data such as carrier, premium, coverage type, commission rate, and generate digital invoices and payment links with one click.
Ascend's Automated Invoicing aims to significantly reduce the time spent on billing and payment tasks as well as reduce human errors by making it easier to directly transform documents like binders into personalized invoices. By leveraging AI, businesses no longer need to rely just on integrations with their management systems to transfer data into the Ascend platform.
"Ascend's Automated Invoicing is a practical application of AI that saves insurance businesses significant time by automating time-consuming administrative work," said Carl Niedbala, National Managing Director - Digital Product Strategy & Innovation of The Baldwin Group. "This empowers insurance professionals to spend time on the uniquely human work of risk management, client relationships and serving complex insurance needs."
"Many of our partners have asked us to make invoice creation as easy as possible", stated Andrew Wynn, co-founder and CEO of Ascend. "We're now able to make this a reality by using AI to read, categorize, and populate the relevant data across all types of binders and carrier quotes. Ascend's invoice creation is now as easy as one upload, continuing our commitment to building solutions that reduce time spent on time intensive manual billing and accounting tasks."
InsurTech/M&A/Finance💰/Collaboration
Companion Protect, National Pet Insurance and Wellness Administrator, Announces $20.25M Series A Extension Round Led by Top FinTech and Strategic Investors
Additional strategic investments from Avanta Ventures, Liberty Mutual Insurance, Old Republic International Corporation, and Stray Dog Enterprises to fuel continued growth and digital innovations in customer and agent experience**
Companion Protect®, a Kansas City-based pet health administration company, announced it has closed a $20.25 million extension round from Series A investors. This follows a $27 million Series A financing round in 2023 from Avanta Ventures, Liberty Mutual Insurance, Old Republic International Corporation, and Stray Dog Enterprises.
Companion Protect is a national B2B2C pet insurance and pet wellness program administrator that leverages its innovative PALS® platform to provide pet owners with a seamless, user-friendly pet insurance and wellness experience – all fully branded and customized to partner specifications. The proceeds from this Series A extension round will fuel product and partner expansion, along with digital innovation to enhance the customer experience.
Companion Protect has launched and grown pet health programs for leading personal lines insurance companies, including Liberty Mutual, Safeco, and CSAA Insurance Group. It recently contracted with another Top 5 insurer to launch a new pet insurance program in the coming months. Additionally, Companion Protect continues to expand its custom offerings to retailers, affinity groups, shelters, and other strategic channel partners.
“This level of investment from our strategic partners demonstrates incredible belief in our purpose to ensure better outcomes for pets because pets make us happy,” said Chuck Laue, founder and CEO of Companion Protect. “Additional investment reflects our investors' confidence in the Companion Protect team to deliver customized pet healthcare solutions to our channel partners and their customers.”
Claims
Integrating Loss Control and Support for Positive Claims Experiences
Today, HawkSoft and ClaimSetter are announcing a new collaboration to help independent insurance agencies regain control of their insured's experience during the claims process. ClaimSetter is the newest addition to HawkSoft's Solution Partner program – an initiative focused on curating services that bring meaningful improvements to the day-to-day of running an independent insurance agency.
ClaimSetter gives independent agents control of their customers' claim experience. ClaimSetter is the only claims concierge for independent agents that turns claims into a profit center. ClaimSetter engages with contractors, material providers, and carriers' adjusters to expedite a smooth property claim experience from the first notice of loss through complete recovery.
"We are thrilled to integrate with HawkSoft to provide transparency and newfound control to independent agents over the property claim process," said Elnor Rozenrot, CEO and Founder of ClaimSetter.
"Property damage claims offer one of the best opportunities for agents to prove their commitment to serve clients," says Rushang Shah, CMO of HawkSoft. "We encourage agents to be hands on during this difficult time for clients. ClaimSetter helps agents do this head-on, and that made them immediately stand out as a worthy addition to our Solution Partner program."
This marks the start of a relationship that both companies express a hope in growing. ClaimSetter is actively evaluating HawkSoft's Partner API for future integration. To learn more about ClaimSetter and HawkSoft, visit: https://www.hawksoft.com/partners/
Awards
Sure featured on the 2024 Inc. 5000 as one of America's fastest-growing private companies
Sure, the insurance technology leader that unlocks the potential of digital insurance, today announced it has been recognized on the 2024 Inc. 5000, an annual list of the fastest-growing private companies in America. This is the second consecutive year Sure has made the prestigious list that provides a data-driven look at the most successful companies within the American economy's most dynamic segment — its independent, entrepreneurial businesses.
"We're taking an ecosystem approach to connect two sides of a market that's been bogged down by legacy players, and the acute problem we are solving for is what has enabled us to thrive," said Wayne Slavin, co-founder and CEO of Sure. "We're honored to be included in the Inc. 5000 for the second consecutive year, and there's so much to be excited about on the road ahead for us as we build the rails of digital insurance."
The Inc. 5000 class of 2024 represents companies that have driven rapid revenue growth while navigating inflationary pressure, the rising costs of capital, and seemingly intractable hiring challenges. Among this year's top 500 companies, the average median three-year revenue growth rate is 1,637 percent. In all, this year's Inc. 5000 companies have added 874,458 jobs to the economy over the past three years.
Majesco Recognized as One of the World’s Top Insurtech Companies by CNBC and Statista
Majesco, a global leader of cloud insurance software solutions for insurance business transformation, today announced its inclusion in The World’s Top Insurance Companies 2024 report, compiled by CNBC in collaboration with the market research firm Statista.
This prestigious recognition highlights Majesco’s pivotal role in driving innovation and transforming the insurance industry through its advanced technology solutions.
As the insurance industry continues to face unprecedented change due to macro-economics, profitability and growth challenges, shifting customer demographics, increased risk, and rapid adoption of modern technologies, the demand for innovation and next-gen, intelligent solutions has never been higher. The World’s Top Insurance Companies 2024, honors the top 150 insurtech companies globally, recognizing those that are leading the charge in replacing traditional, cumbersome processes like claims processing, quote comparisons, and underwriting with cutting-edge digital technologies.
“We are honored to be recognized among the world’s leading insurtech companies,” saiid Adam Elster, CEO at Majesco. “This award is a testament to our relentless focus on innovation and commitment to empowering insurers with next-gen, intelligent solutions, including embedded AI and GenAI, to drive operational optimization and innovation in today’s insurance landscape.”
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