News
Allstate Approved to Raise Home Insurance Rates by 34% in Wildfire-Prone California
Allstate Corp. is set to increase home insurance rates for California customers by an average of 34.1 percent, marking the biggest jump in premiums for a major insurer in three years as the state faces a deepening property insurance crisis.
The rate hike, which will take effect from November, will impact about 350,000 policyholders across California. Some customers will face premium increases of up to 650 percent, while others may see their rates drop by as much as 57 percent, according to company filings.
Commentary/Opinion
Home insurance turning homeownership into 'American Nightmare'
Prospective homebuyers are cheering on declining mortgage rates — the rate on a 30-year fixed has fallen in the last week to the lowest reading since 2023. However, the lingering issue of home insurance is casting a dark cloud over the housing market for excited buyers.
Content creator, podcaster, and "In This Economy?" author Kyla Scanlon joins Madison Mills on Market Domination Overtime to highlight the increasing price tag for home insurance. Scanlon outlines "a perfect storm for home insurance" as costs rise, especially in states like California and Florida where extreme weather and climate events ravage communities.
For those purchasing homes in the attempt to live the American Dream, Scanlon says it is instead turning into the "American Nightmare."
For more expert insight and the latest market action, click here to watch this full episode of Market Domination Overtime.
InsurTech/M&A/Finance💰/Collaboration
Fitch anticipates rise in reinsurance M&A activity as market softens
Although 2024 has not seen any major reinsurance M&A announcements, Fitch Ratings expects that as the market inevitably softens and organic growth opportunities diminish, companies that have accumulated capital may seek to acquire less successful re/insurers.
Fitch analysts noted that M&A activity has slowed in 2024 following several large deals in 2023, largely due to the ongoing hard market.
“While higher market valuation multiples of re/insurers has increased the currency of acquiring companies, the same holds true for most potential acquisition targets. This makes acquisitions expensive and less likely to be executed, acting as a constraint to the consideration of large-scale M&A activity,” Fitch explained.
Recently, global reinsurers have steered away from M&A and have focused more on organic growth opportunities, thanks to continued favourable pricing and beneficial terms and conditions.
Additionally, challenges such as integration risks, concerns over casualty reserve adequacy, and regulatory approval uncertainties have also hindered M&A activity.
On the IPO front, the situation has been mixed. Hamilton started trading on the New York Stock Exchange in November 2023, raising about USD 81 million to expand its business. This IPO improved Hamilton’s financial flexibility and access to capital markets after being private since its formation in 2013.
Events
ITC Vegas 2024 - The world’s largest gathering of insurance innovation
Insurtech Consulting and our ‘Connected’ newsletter are proud media partners of ITC Vegas 2024
Event Date: Tuesday, October 15 – Thursday, October 17, 2024
Event Location: Mandalay Bay Convention Center
3950 Las Vegas Blvd S
Las Vegas, NV 89119
ITC Vegas combines unbeatable networking with what’s new and next, ensuring your time will be spent meeting more people, sourcing more solutions, and creating valuable partnerships.
Discover solutions to your biggest challenges, gain access to unique and meaningful education, and meet the insurance industry’s best and brightest. Join the insurance event that doesn’t just bring the industry together – it moves the entire industry forward.
The future of insurance is here – at ITC Vegas. If you aren’t here, you are missing out on the conversations that are propelling the industry forward
Register now and save, $200 off. Use promo code 200ITC1813
Code not valid on Independent Agent, Startup, Groups, or LATAM tickets. Discounts only apply to new registrations.
Financial Results
Results Too Good? Swiss Re Boosts Reserves ~$1B Amid Surprises
Lower than expected catastrophe losses in the second quarter helped fuel nearly $1 billion in net profit for Swiss Re during the period, and a 16 percent jump in profit to $2.1 billion for the first half.
Reporting the figures last week, together with first-half combined ratios of 84.5 for property/casualty reinsurance and 88.7 for Swiss Re’s commercial insurance arm, Corporate Solutions, the group’s chief financial officer, John Dacey, explained that results also included some big second-quarter loss reserve boosts—$300 million of incurred-but-not-reported reserves for slow-to-emerge natural catastrophe losses and $650 million to top off U.S. liability loss reserves.
“All these reserving actions are consistent with our ambition to enhance the overall resilience of the portfolio,” Dacey said.
Announcements
Progressive Insurance® Introduces Purpose-Driven Strategy and Initiatives to Help People Move Forward and Live Fully
Insurer's purpose unifies and reaffirms the brand's long-standing efforts to drive progress on the road, in the home, and in business
Progressive Insurance® is building upon its long-standing efforts to support its customers and the communities it serves by introducing its purpose, "We exist to help people move forward and live fully." Since opening its doors in 1937, progress has been in the insurer's name for a reason, leading to a fundamental brand belief that insurance should do more than just protect; it should propel people forward. Progressive's purpose unifies, guides, and builds upon its efforts to drive meaningful and tangible progress on the road, in the home, and in business, all areas where the insurer conducts business.
"Progress is in our company's name and is at the core of guiding the actions we're taking to deliver on our commitment to help people move forward and live fully," said Tricia Griffith, Chief Executive Officer at Progressive. "As a brand that largely leverages humor, we're excited to share more of the heart behind the Progressive story and commit to brand actions that support meaningful and lasting societal impact for customers, consumers, and communities."
The brand purpose will elevate and amplify Progressive's commitments while continuing to champion its long-standing initiatives that cultivate impact across these three key pillars:
Progress on the road: Building on its founding mission to provide access to affordable insurance to those who couldn't find it elsewhere, Progressive's passion for furthering equity on the road has grown into creating initiatives like the Keys to Progress® veterans' vehicle giveaway program. Since 2012, Progressive has gifted over 1,000 vehicles to veterans in need. Upcoming initiatives in this space include enhancing safety on the road, promoting safety education and more.
Progress in the home: Knowing the importance home ownership plays in building generational wealth, Progressive is dedicated to furthering solutions that help people get into homes, stay in their homes, and realize the value of their homes. This commitment builds on its history of easing the transition for the unhoused into stable housing, transforming more than 300 homes through its work with Humble Design. Additionally, this year, Progressive has invested in funding for developing innovative solutions to aid in making the dream of home ownership more attainable for everyone.
Progress in business: Continuing its commitment to offering support to business owners, Progressive remains invested in helping small business owners move forward by offering improved access to capital with its Driving Small Business Forward grant program working with Hello Alice.
Main Street America Insurance Exits Personal Lines
Main Street America Insurance said Thursday it will stop offering personal lines insurance in favor of a commercial lines strategy.
Main Street America is doubling down on commercial lines and clearly defining our future direction in the marketplace,” said Chris Listau, president and CEO, in a statement.
“As a trusted and respected brand in the independent agent channel, we’re continuing to move forward confidently in an area that enables us to take advantage of the incredible potential that exists in the commercial lines space,” Listau added. “This will further support our agents in solving the unmet needs of small business owners.” FULL STORY
Unshop for Auto Insurance With Experian’s New Ongoing Rate Monitoring Feature
Consumers never need to shop for insurance again using the Experian Insurance Marketplace
Inflation has impacted auto insurance since last year increasing by approximately 20 percent.
With Experian, consumers never have to worry about shopping for better rates with its Insurance Marketplace and new Ongoing Rate Monitoring feature. Consumers who utilize the free marketplace will now receive alerts on an ongoing basis if there is a better rate on their auto insurance policy taking the hassle out of comparison shopping.
Legal System Abuse/Social Inflation
Civil case, nuclear verdict and claims count data show worrying trends...
Civil case, nuclear verdict and claims count data show worrying trends...
The P&C industry had another strong quarter, with many carriers reporting year-over-year improvements in underwriting profitability and brokers posting mid-single digit to low-double digit organic growth. However, for all the positive elements of the season, adverse developments in casualty reserves continued to cast a shadow over sentiment.
As we discussed in our Q2 earnings takeaways piece, senior management at Travelers and Selective pointed early on in the reporting season to the challenging social inflationary environment – particularly litigation financing, nuclear verdicts, etc. – as a primary driver of the rising loss costs weighing on casualty lines.
Against this backdrop, we decided to dive deeper into the commentary surrounding social inflation and its impact on the industry at large. We found that many carriers of various sizes across all segments discussed the impact of social inflation on the casualty loss-cost environment.
We also examined civil case counts and data on nuclear verdicts from TransRe to better understand how social inflation has impacted the industry and will continue to do so over time.
Curators' Corner: Alan Demers and Stephen Applebaum
So Many Conferences, So Little Time and Budget | Insurance Innovation Reporter
The oversaturated insurance conference landscape: which to attend and how to take best advantage of what they have to offer and maximize your experience.
Our inbox has become inundated with solicitations to participate in a wide variety of North American insurance industry conference as attendees, presenters, moderators, and/or sponsors. We suspect yours has too.
In addition to the increased number of conference and media production companies entering the fray—inexplicably mostly U.K. based—conference themes are increasingly more specialized (InsurTech, ClimateTech, Innovation, Data and Analytics, Sustainability, GenAI, Cyber etc.), all which account for this growth in events.
OEMs & Auto Insurance
GM charging $300 per year to use built-in Google Maps
General Motors has partnered with tech giant Google to offer in-built Google software on the infotainment systems in some of its cars, like the Chevrolet Silverado, Tahoe and Suburban SUVs.
However, a global media outlet conducting a long-term vehicle test of the 2024 Chevrolet Silverado ZR2 found out that owners of GM cars will need to pay a subscription fee to use some of Google's in-built software. This includes basic features like the Google App Store, voice recognition and, most importantly, Google Maps.
The media outlet claimed that to use the vehicle's native navigation feature (Google Maps), owners will need to have an active OnStar plan. The OnStar plan starts with the Connected Vehicle Plan, which costs $24.99 per month, while their all-inclusive Premium plan comes at $49.99 per month.
Current GM cars continue to feature Android Auto & Apple CarPlay. However, the carmaker did announce last year that they would phase out the feature, replacing it with GM's own in-house developed connectivity platform.
Source: MotorTrend
Data Privacy/Cyber Security
Your Car Is a Data Privacy Nightmare. Here's How to Protect Yourself
Automakers have access to everything from your driving habits to your taste in music due to rampant data collection.
Often, this data is used against you in the form of targeted ads or sold to third-party brokers.
Consumers have options, but without strong legal protections for their data, it's an uphill battle.
Your car knows you far, far better than you think — where you work, your Instagram handle, what kind of music you like, the sound of your voice singing backup to “Under Pressure” and more. But the worst part? You handed all that data over willingly, and you probably didn't even know it.