Research
J.D. Power: Top U.S. car insurance carriers by region
Even though auto insurance rates are up nationwide, loyal car-insurance customers tend to stick with their insurers, according to the J.D. Power 2024 U.S. Auto Insurance Study.
When insureds are loyal to their insurance carriers, customer satisfaction and brand advocacy outweigh price-increase frustration, researchers determined. That's good news for insurers, who are feeling pinched in several ways this year.
"Auto insurers are in a tough position right now," Breanne Armstrong, director of global insurance intelligence at J.D. Power, said in a press release about the 2024 U.S. Auto Insurance Study. "With repair costs still rising — and with more than 20% of vehicles involved in collisions now considered total write-offs — insurers are still losing money, despite passing along huge price increases to their customers. What's interesting in J.D. Power data is that even though high premiums negatively affect customer satisfaction, those negative influences can be offset by high levels of trust that insurers will come through when they are needed." The J.D. Power study surveyed average customer satisfaction with car-insurance carriers. The slideshow above illustrates the insurers who scored the highest for happy customers in each region of the U.S.
Elana Ashanti Jefferson serves as ALM's PropertyCasualty360 Group Chief Editor. She is a veteran journalist and communications professional. Reach her by sending an e-mail to ejefferson@alm.com.
News
Farmers to Streamline East Region in Move That Will Mean 84 Layoffs
Farmers Group is laying off more employees one year after it cut ties with 11% of its workforce or 2,400 people.
This time the insurer said it is not disclosing how many people may lose their jobs. However on August 7, the insurer filed a WARN (Workers Adjustment and Retraining Notification) in California reporting that 84 employees were being permanently laid off as of October 7.
Andrew G. Simpson
State regulator to fast-track reviews of home insurance rate hikes
Following delays in legislative efforts to address the review process for home insurance rate hikes, California Insurance Commissioner Ricardo Lara has taken action to expedite the reviews himself. The decision is in response to the growing pressure from insurers retreating from the state's market due to escalating wildfire losses.
It currently takes an average of seven months for insurers to receive decisions on their rate applications, which was described as “unsustainable” by Lara. Insurers like State Farm and Farmers have started declining to renew existing policies or writing new ones, exacerbating the problem. Lara emphasized the urgency of the situation in a written statement, noting that both consumers and businesses are suffering.
Lara issued a bulletin on Friday, August 9, as part of his broader Sustainable Insurance Strategy. It aims to stabilize the home insurance market through a series of reforms. The new measures require the Department of Insurance to review complete rate applications within 60 days.
If a decision cannot be reached during that time frame, regulators will be required to write a detailed explanation of the remaining unresolved issues. The process allows up to two additional 30-day extensions. After that, the department will issue an "estimated" rate the insurer can accept or reject. If rejected, the process will continue with 30-day extensions.
Climate/Resilience/Sustainability
Demand for Better Severe Weather Coverage Soars According to Insurity Survey
Insurity, a leading provider of cloud software for insurance carriers, brokers, and managing general agents (MGAs), has released findings from its 2024 Severe Weather P&C Consumer Pulse survey, shedding light on consumer attitudes towards severe weather insurance coverage.
Insurity, a leading provider of cloud software for insurance carriers, brokers, and managing general agents (MGAs), has released findings from its 2024 Severe Weather P&C Consumer Pulse survey, shedding light on consumer attitudes towards severe weather insurance coverage.
The survey highlights an increasing demand for advanced insurance solutions as severe weather events become more frequent and severe.
Conducted in April 2024 with over 1,000 randomly selected adult participants across the United States, the report revealed that 36% of consumers would consider switching insurance providers for better severe weather coverage. Despite nearly half of Americans expressing confidence in their current insurance plans to handle severe weather’s financial impacts, there is a strong inclination towards providers offering more comprehensive policies and investing in technology to simplify the claims process.
The urgency of the demand is underscored by the fact that the United States has experienced 15 severe weather events, each causing losses exceeding $1 billion, as of July 9, 2024, according to the NOAA National Centers for Environmental Information. The statistic highlights the significant financial risks posed by the increasing frequency of severe weather, and the need for more robust insurance coverage.
Changing weather trends call for new insurance considerations
Ninety percent of U.S. counties suffered a weather disaster in the last 15 years.
Natural disasters are the fifth most common cause of bankruptcies in the U.S.
Many people across U.S. now find themselves recovering from a series of intense summer weather events.
The National Oceanic and Atmospheric Administration (NOAA) reported four new billion-dollar disasters in June 2024 alone, including Category 5 Hurricane Beryl in the South, catastrophic flooding in the Midwest and record-breaking heat waves across the country.
These events have brought this year's total of declared disasters to 15, three more than in June 2023.
Natural disasters are penetrating our armory of insurance coverage with an increasing intensity. The evolving nature of severe weather calls for a reevaluation of existing insurance frameworks and a sincere consideration of supplemental disaster insurance solutions to ensure more comprehensive coverage that protects consumer financial resilience.
Commentary/Opinion
Bad Cops No More: Friendlier Auto Insurers Needed for Telematics Future
Executive Summary
IoT Insurance Observatory Director Matteo Carbone envisions a time before the end of the decade when the most advanced insurers will use auto telematics data to support all the functions of their businesses, and when customers protected by connected devices will come to love their insurers, who deliver significant rewards and benefits in addition to insurance coverage that becomes more affordable and available.
But getting to this point will require a rethink of marketing messages and agent rewards, he told Carrier Management. The time is right for friendlier processes in the wake of the publication of a series of New York Times articles delivering reports that portray insurers as inquisitive “bad cops” on the hunt to penalize drivers by tying rate hikes to driving behaviors that some customers say they didn’t know were being monitored.
Susanne Sclafane, Executive Editor at Wells Media Group
Fitch Ratings: U.S. Auto Insurer Strong Performance Recovery to Continue Through 2025
More favorable mid-year 2024 results of U.S. personal auto insurers are likely to continue through the end of 2024 and into 2025 due to material price increases and a moderation of claims severity trends “vastly” improving the segment’s profit footing, Fitch Ratings reported.
There was a caveat in the report: a return to underwriting profitability could lead to a sudden flattening of price movement going forward, and that improved performance will eventually lead to competitive pressure and resistance from policyholders and regulators for further price increases.
5 Tech Trends Driving Innovation In 2024 | Insurance Thought Leadership
The time for adoption is now, and insurers must take action in our increasingly digital and data-driven landscape.
The global insurtech market, valued at $3.85 billion in 2021, is expected to reach $166.7 billion by 2030, representing a jaw-dropping compound annual growth rate (CAGR) of 52%. Driving this explosive growth are once-traditional insurers that are adapting to today’s more customer-centric business models while also implementing technologies to optimize and protect their operations.
Following are five of the technological trends that are reshaping the insurance sector:
Amit Patel is a senior vice president at Consulting Solutions, an IT workforce and consulting services provider in North America, where he leads the consulting practice.
InsurTech/M&A/Financeđź’°/Collaboration
[ED. NOTE: EXCELLENT REPORT, AS ALWAYS] -- FT Partners Publishes Q2 2024 InsurTech Insights – Financing Volume Rises 2x Sequentially
Highlights of the Report
- In Q2 2024, private InsurTech company funding volume totaled $1.4 billion representing a 2x sequential increase over Q1 2024 volume of $698 million. Volume also increased on a year-over-year basis, though more modestly at 12%.
- There was an uptick in large financing rounds during the quarter, with nine $50 million+ financing rounds, compared to just three in Q1 2024 and six in Q2 2023.
- The top three largest capital raises during the quarter included Sidecar Health's $165 million Series D, Transcarent's $126 million Series D and Honey Insurance's $108 million Series A.
- Funding activity for the European InsurTech sector specifically picked up in the first half of 2024, with a 66% increase in the number of deals compared to the first half of 2023. Large rounds for European InsurTech companies in Q2 included capital raises by Finland-based ICEYE, UK-based Vitesse and UK-based FintechOS.
- Markd and Anthemis have made the most total investments (new or follow-on) in the sector during the first half of 2024 with seven and six investments, respectively, while Portage made the most new InsurTech investments thus far, a total of three.
- On the strategic side, American Family Ventures had led the way as the most active, with five follow-on investments.
- M&A activity continued at a similar pace to recent quarters with 31 deals announced, though total dollar volume of $509 million was made up of just six deals with announced purchase prices and represented a decline of 68% year-over-year.
John Hancock and Ethos Collaborate to Offer Simple Term with Vitality and a Return of Premium Rider | Business Wire
John Hancock and Ethos have joined forces to offer John Hancock Simple Term with Vitality through Ethos.
This simplified term life insurance product provides customers with generous Return of Premium (ROP) benefits and the ability to earn John Hancock Vitality rewards and discounts, all with a 100 percent instant underwriting decision.
“Ethos is proud to collaborate with John Hancock on the first ROP product we've offered”
Ethos has built one of the most advanced technology platforms with one of the strongest product portfolios in the industry. It offers customers and agents a seamless experience and streamlines the life insurance purchasing process.
"We are excited about this new distribution relationship with Ethos, enabling us to reach a broader customer base with our Simple Term product and providing access to the unique John Hancock Vitality PLUS Program," says Michelle Dauphinais, Vice President and Head of Distribution at John Hancock.
John Hancock Simple Term with Vitality and ROP offers agents an instant, hassle-free way to protect a wider range of families and help meet their life insurance needs.
Phyn and Bamboo Insurance Partner to Provide Innovative Water Solutions for California Homeowners
Phyn, the leader in intelligent water solutions, today announced that it is joining forces with Bamboo, a property and casualty insurance organization that prioritizes simplicity, transparency, and savings, to protect homes from water-related loss and help address the challenges California residents face in securing dependable homeowners insurance.
The partnership offers eligible Bamboo policyholders a 10% discount* on insurance premiums for homeowners who install Phyn Plus and a 15% discount on the Phyn product suite.
“At Bamboo, we’re committed to continually innovating and finding solutions to ensure we deliver an insurance experience that puts our customers first, even in a high-risk environment”
In a landscape where California’s insurance market is experiencing unprecedented challenges with many insurers leaving the state, many homeowners face limited options and higher costs. Bamboo has stepped up to ensure Californians can secure reliable and affordable homeowners insurance. Phyn’s solutions protect a home’s plumbing system to prevent leaks and ensure it is watertight while empowering homeowners to conserve and avoid unnecessary water loss.
“With our roots in California, Phyn is proud to partner with Bamboo as they double down on their commitment to the state and continue to offer Californians quality insurance options while empowering them with the tools to protect their homes from unnecessary water damage and reduce water loss,” said Ryan Kim, CEO, Phyn
InsurTech startup QuickFacts raises $2m to expand market presence
QuickFacts, an InsurTech startup focused on enhancing efficiency within the insurance industry, has announced the successful closure of an oversubscribed $2m funding round.
This capital injection positions the company for a strong market launch in Quebec and the United States, building on its recent expansion across the Canadian Western provinces.
The financing round was led by Sandpiper Ventures, a fund that invests in women-led technology companies. Other investors include Killick Capital, a St. John’s-based private investment firm led by Mark Dobbin, and Paul Hill, a Canadian technology executive and angel investor.
The round also attracted investments from InsurTech NY, Neil Mitchell, former Managing Director at Marsh Canada, Phil Gibson, former Managing Director at Aviva and senior executive at Allstate and Travelers US, Don Jacobi, the previous owner of Jacobi Brien Insurance, East Valley Ventures, and other angel investors.**
Co-founded by Christy Barsalou (President & CEO) and Jeff Barsalou (CRO) in late 2020, QuickFacts has developed a platform that consolidates insurance carrier information into a user-friendly, searchable database.
Announcements
National Workers’ Comp Adjuster Day | August 17
Honor National Workers' Comp Adjuster Day and recognize the hard work and dedication of all workers’ comp adjusters! Show your appreciation today!
- Workers’ comp adjusters ensure workplace safety
- Workers’ comp adjusters provide financial support for injured workers- Workers’ comp adjusters promote fairness within businesses
- By ensuring that employers are complying with regulations regarding safety in the workplace, workers’ compensation adjusters are helping to promote fairness and equality among employees.
National Workers’ Comp Adjuster Day is an opportunity to recognize their important contributions toward creating a just and equitable workforce!