Climate/Change/Sustainability/ESG
Deadly hurricane frequency surges by 300%, says Deep Sky
The frequency of deadly hurricane weather has surged by 300%, according to findings from Deep Sky Research.
In its latest report, Deep Sky, a Montreal-based carbon removal project developer, explores how climate change is increasing hurricane risks.
Its Hurricane Rainfall Model shows that intense hurricane rainfall, which used to occur once every 100 years, is now expected every 25 years. Additionally, the likelihood of smaller storms has doubled.
The report also highlights a 33% increase in the severity of extreme hurricane rainfall.
Deep Sky Research’s new machine learning model projects over $450 billion in hurricane-related losses over the next five years for Gulf and South Atlantic coast states, with Florida expected to face the highest losses, followed closely by Texas.
Mid-Sized Carriers Can Be Heroes in Climate-Related Insurance Crisis | Insurance Innovation Reporter
With the right technology systems in place, middle-tier insurers can help consumers in panic mode as they seek alternative coverage.
As climate-related disasters push large P&C carriers out of key insurance markets such as California and Florida, mid-sized carriers can step up and be heroes to consumers in panic mode as they seek alternative coverage. But first, they must ensure their technology systems are up for the challenge.
There’s no way to sugarcoat it. An insurance crisis began in California and is spreading to other states. As a result, large carriers opted out of specific geographic markets, and policyholders from East to West are paying the price in the form of higher premiums, canceled policies, and fewer coverage options.
Steve Johnson is the co-founder and head of product for insured.io, a company focused on improving the customer journey and accelerating digital transformation for insurance organizations.
Guidewire HazardHub provides risk data as wildfire season continues in the US
Guidewire, a provider of software solutions to the insurance industry, has announced the release of critical data and maps detailing wildfire risk in the United States, with this being available at the national, state, and local levels.
Wildfire season typically runs from spring to fall, but varies by region, typically impacting California and the western US. High temperatures, low humidity, and seasonal winds (such as the Santa Ana winds in California) further exacerbate wildfire risks.
Guidewire’s service leverages more than 1,000 data points and HazardHub risk scores for climate risks and extreme weather events.
The top states for wildfire risk are Nevada, Oregon, California, Idaho and Wyoming, according to Guidewire HazardHub Enhanced Wildfire Risk Score – which bases its results on the percentage of homes receiving an “F” rating for wildfire risk.
Commentary/Opinion
7 predictions for the insurance industry - WTW
We are often inspired and excited about the future of the insurance industry.
But after meeting numerous brokers and carriers over several months to discuss Neuron, our digital trading platform, we’re more excited than ever before about the future role technology will play in the insurance industry. The insurance sector is now poised for a digital transformation that will benefit brokers, insurers and insurance buyers alike.
A data-driven digital transformation of insurance
The insurance industry already has the ecosystem and data to enable digital trading. Brokers and carriers are using data and analytics and application programming interfaces (APIs) to connect with trading partners. Now, they’re also looking for ways to use data they already have to connect any broker to any insurer and drive better decision making, improve risk appetite and more effectively match risk to capital.
We foresee numerous changes that will propel the insurance industry into a digital future:
1. New industry entrants will further transform the industry
2. Data, AI and technology will return the human touch to the center of insurance.
3. The insurance industry will move from insure and restore to predict and prevent.
4. The insurance market will become more connected and less fragmented than ever.
5. A faster pace of innovation will close insurance coverage gaps.
6. A principal challenge for the industry will be change management
7. Transparency and trust will come to define the industry.
Financial Results
Tesla reports Q2 results for its insurance carriers
Tesla has released the Q2 financial results for its insurance carriers. Tesla offers coverage in 12 states.
Tesla General Insurance, which offers coverage in Nevada, Oregon, and Virginia, ended the period with $22.3 million in written premiums, an increase of 105% compared to the same period last year.
The carrier ended the period with a net underwriting loss of ~$4 million and a combined ratio of 121%.
Tesla Property & Casualty, which offers coverage in Colorado, Maryland, Minnesota, Texas, and Utah, ended the period with $74 million in written premiums, an increase of 197% compared to the same period last year.
The carrier ended the period with a net underwriting loss of ~$17.6 million and a combined ratio of 127%.
Tesla also offers coverage in California, Illinois, Ohio, and Arizona through a fronting arrangement with State National. For December 31, 2023, State National reported $387 million in written premiums produced by Tesla.
Ping An posts 3.9% P&C insurance revenue growth in H1'24 - Reinsurance News
Ping An has released its financial results for the first half of 2024, revealing a solid 3.9% year on year growth in property & casualty (P&C) insurance revenue, amounting to RMB 161,910 million.
At the same time, the organisation also posted an overall combined ratio of 97.8% in the period. Auto insurance premium income climbed 3.4% year on year to reach RMB 104,824 million, while vehicles insured increased 5.9% during H1’24.
Moving towards Life & Health, new business volume (NBV) amounted to RMB 22,320 million in the period, an increase of 11% from the prior year.
As well as this, Ping An’s banking business displayed steady growth, as evidenced by its net profit increasing by 1.9% year on year to reach RMB 25,879 million.
During H1’24, Ping An’s insurance funds investment portfolio witnessed an annualised comprehensive investment yield of 4.2%, up 0.1 percentage points from the previous year.
Even more so, the group’s insurance funds investment portfolio grew 10.2% from the beginning of the year to more than RMB 5.20 trillion as of June 30, 2024.
All in all, Ping An delivered a 16.4% annualised operating return on equity (ROE) in H1’24, with operating profit reaching RMB 78,482 million.
InsurTech/M&A/Finance💰/Collaboration
PURE Insurance Selects VIP Software to Optimize Claim Expenses | Insurance Innovation Reporter
The vendor’s solution integrates with PURE’s XactAnalysis estimating platform and its Guidewire ClaimCenter system.
Privilege Underwriters Reciprocal Exchange (PURE; White Plains, N.Y.), a policyholder-owned insurer of high-net-worth individuals, has selected VIP Software’s (St. Petersburg, Fla.) vendor management platform, BAP, for precise vendor invoicing and comprehensive reporting.
VIP Software describes its claims expense management platform as meticulously designed to seamlessly integrate with PURE’s XactAnalysis estimating platform, expediting implementation and ensuring a seamless user experience. PURE’s decision to adopt the BAP platform was influenced by its widespread adoption among other carriers and vendors, according to a VIP statement.
“Through our partnership, PURE Insurance improves vendor invoice management through data-driven insights,” comments James Makris, Founder and CEO, VIP Software. “Our platform’s multi-line functionality and seamless integration with Guidewire Claim Center empower PURE to manage vendor invoicing seamlessly and accurately.”
Anthony O'Donnell is Executive Editor of Insurance Innovation Reporter
One Inc Hosts Inaugural InsurTech Innovate Users Conference
One Inc, the leading digital payments network for the insurance industry, hosted its first-ever users conference, InsurTech Innovate, this summer in Boston, MA.
The event brought together 130+ industry leaders and 7 of the top 25 insurers to collaborate on the latest trends and innovations shaping the insurance payments landscape.
“The panel sessions offered valuable content that aligned with our organizational goals, while giving us with the opportunity to network with industry peers.”
Sponsored by Guidewire, Mastercard, U.S. Bank, and Ernst & Young, InsurTech Innovate brought together a robust group of internal and external experts. The discussions aimed to create a seamless payment experience for policyholders while also focusing on reducing fraud. By leveraging the combined expertise of these industry leaders, the event fostered innovative solutions that promise to enhance the efficiency and security of insurance transactions.
“As a leader in the digital transformation of the insurance industry, One Inc was honored to host such a diverse and influential group of insurers and industry leaders for our first ever users conference,” said Ian Drysdale, CEO of One Inc. “With digital transformation reshaping the insurance sector, InsurTech Innovate served as a dynamic platform to listen to our customers and collaborate, building a space to innovate commerce together.”
Legal System Abuse/Social Inflation
Opinion: Third-party funding of lawsuits is dangerous
The civil justice system in the United States, particularly its tort law framework, is fundamentally broken and in desperate need of reform.
Originally designed to compensate victims of wrongdoing and to deter negligent behavior, it has devolved into an inefficient, unfair and often exploitative process that frequently fails to serve its intended purpose and levies significant costs on California families and businesses.
The rapid increase in civil litigations aimed not at righting wrongs or making clients whole, but instead at generating income for attorneys and return on investment for investors, is in large part to blame for these current issues.
While such actions range in size and scope, they increasingly entail patent infringement actions by companies known as “patent trolls” that don’t make products or offer services but instead exist solely to weaponize acquired patent rights in profit-motivated lawsuits that often target the kinds of innovators that are based in California.
Driven by a practice known as third-party litigation funding, billions of dollars are now invested in tort litigations every year by private equity managers and hedge funds, which seek to manipulate federal civil lawsuits for their own financial benefit. By giving financial backers the power to influence key decisions in lawsuits such as whether to settle and, if so, when and for how much, third-party litigation funding arrangements can also potentially override the best interests of individual claimants. And because funders can currently conduct their business in near total secrecy due to the lack of legally enforceable standards governing third-party litigation funding, these arrangements can hinder the ability of the courts to fairly resolve disputes and hide unethical conduct or conflicts of interest.
RAND Study Eyes Impact of Legal System Abuse and Social Inflation
A study from RAND found that rising litigation rates, trial awards and claim severity are consistent with the expected effects of social inflation.
The study, What Is the Evidence for Social Inflation? Trends in Trial Awards and Insurance Claim Payments, found a 10% increase in the annual number of new court filings per capita between 2012 and 2019 in 19 states, and that 64% of cases reached a verdict in favor of the plaintiff in 2019, up from 53% in 2010.
It also found a 7.6% compound annual growth rate in inflation-adjusted trial awards in personal injury/wrongful death cases from 2010 to 2019, and a 2.7% annual rise in the inflation-adjusted severity of bodily injury insurance claims between 2010 and 2019 for certain commercial liability and personal auto policies.
Those involved in the study say the increase of legal system abuse generated by billboard attorneys, combined with third-party litigation funding of lawsuits by dark money investors, are contributing factors to rising social inflation—a term to describe social trends believed to expand the liability of parties allegedly responsible for.
Telematics, Driving & Insurance
Verra Mobility partners with Xtract to offer incident management solutions to vehicle fleet customers
Verra Mobility's tolling, violation and title and registration customers can leverage Xtract's platform and connected vehicle data to detect and analyze collision events in near-real time.
Verra Mobility Corporation (NASDAQ: VRRM), a leading provider of smart mobility technology solutions, announced today a partnership with Xtract, a global leader in digital First Notice of Loss (FNOL) and near-real-time vehicle collision reconstruction insights for automated incident management.
Through this partnership, Verra Mobility will offer its fleet customers the ability to improve claims processing speed and accuracy by automatically aggregating connected vehicle data and analyzing trips in near-real time to better detect and manage collision events.
"Incident management is a time-consuming, manual and painstaking process for fleet owners and fleet management companies," said Steve Lalla, Executive Vice President of Verra Mobility's Commercial Services division. "Xtract's innovative approach to simplify and automate incident management is a perfect complementary fit in our suite of fleet solutions. Verra Mobility believes data generated from connected vehicles will increasingly enable more efficient solutions to benefit fleet operators, and incident reconstruction is a crucial use case for how data can be used to save fleets time and money."
Xtract's digital reporting process replaces paper accident forms and enables the capture of standardized incident data by leveraging vehicle telematics and AI in order to reduce the time and exposure of claims handling. Through the Xtract platform, fleet managers will receive an instant notification when a collision occurs involving one of their vehicles so they can proactively manage the incident and reduce risk.
People
Seth Ingall Named Chief Legal Officer at Crash Champions
Seth Ingall was appointed Chief Legal Officer at Crash Champions. Ingall served more than 35 years at GEICO in various leadership capacities
*Crash Champions today announced the appointment of longtime insurance industry executive Seth Ingall as the organization’s Chief Legal Officer.
Ingall brings more than 35 years of industry experience to the position, most recently serving as Senior Vice President & Chief Legal Officer at GEICO. He was previously Senior Vice President & Chief Claims Officer, a position he held from 2013-17.
“We are proud to welcome Mr. Ingall to the executive leadership team and look forward to the value he will bring as we continue to execute our mission and vision to build the industry’s premier collision repair organization,” said Crash Champions Founder and CEO Matt Ebert.
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