News
HSB adds new cyber coverage for consumers
HSB has expanded its Home Cyber Protection™ coverage, offering new protections for connected vehicles, digital wallets, and cybercrime victims.
The coverage includes Cyber for Auto, which addresses attacks on connected vehicles, and Cyber Victim Counseling for victims of online crime.
It also offers safeguards for digital wallets, NFT collectibles, and provides complimentary cybersecurity tools through Zeguro Cyber Navigator.
“Cyber risks hide around every corner of our homes – Wi-Fi connected laptops, mobile phones, smart appliances, security systems, even baby monitors. It’s important that cyber insurance keep pace with emerging cyber threats.” – James Hajjar, chief product and risk officer for HSB, part of Munich Re.
State Farm, Citizens Brace for Losses From Hurricane Helene
State Farm General Insurance Co. and Citizens Property Insurance Corp. are bracing for the insurance industry’s largest losses from damage caused by Hurricane Helene, which is quickly becoming one of the costliest storms in U.S. history.
State Farm was the leading provider of home and car insurance in Georgia and South Carolina at the end of 2023, according to the most recent data from AM Best, and has significant exposure in Florida and North Carolina. The Illinois-based firm said on Sept. 30 that it had received more than 50,000 auto and homeowner claims related to Helene and expects that number to rise.
Hurricane Helene Devastates Southeast, Exposing Flood Insurance GapHurricane Helene Devastates Southeast, Exposing Flood Insurance Gap
The disaster highlights just how alarmingly low flood insurance coverage is among Americans, particularly in areas that are farther from the coast.Hurricane Helene destroyed whole communities across six states in the Southeastern U.S. and claimed more than 100 lives, which is a number that is expected to grow.
The disaster highlights just how alarmingly low flood insurance coverage is among Americans, particularly in areas farther from the coast. Flood insurance coverage in several Southeastern states remains notably low, even as these areas face increasing risks from storms and rising sea levels, according to Neptune Flood.
In Florida, only 12% of the 8.97 million properties have flood insurance. The state saw a slight year-over-year increase in policies, with the number rising from 1,076,596 in June 2023 to 1,089,386 in June 2024—an increase of just 1.2%.
Georgia, however, experienced a decrease in coverage. Only 1.6% of the 4.2 million properties in the state are insured against floods, with the number of policies dropping from 68,093 in June 2023 to 65,571 in June 2024, reflecting a 3.7% decline.
State Farm® Teams Up with the National Volunteer Fire Council to Award $1 Million to Local Volunteer Fire Departments
Volunteer fire departments play a critical role in the protection of communities across the country, especially small towns and rural areas. In fact, over 65% of all firefighters in the U.S. are volunteers, devoting their time and risking their safety to help their neighbors in need. Yet many local departments operate on tight budgets and struggle to find the funding for needed equipment that can help increase their responders' safety, effectiveness and ability to serve at their best.
100 volunteer fire departments will receive a $10,000 grant to purchase needed equipment.
Recognizing this significant need, State Farm® teamed up with the National Volunteer Fire Council (NVFC) – the leading nonprofit association representing the volunteer fire, EMS, and rescue services – to help volunteer fire departments. Through the State Farm Good Neighbor Firefighter Safety Program, $1 million has been awarded in 2024 to fund critical fire department equipment.
In total, 100 local volunteer fire departments across the U.S. have been selected to receive a $10,000 grant. These grants will go to purchase equipment that will enhance safety, communications and operations for volunteer fire departments..
Climate/Change/Sustainability/ESG
Helene Should Trigger a National Rethink of Home Insurance
As people across the Southeast continue to pick up the pieces from Hurricane Helene, many will continue to face a rude awakening: that they—or their landlords—don’t have flood insurance. Those facing damages from winds or mudslides are more likely to be covered, since that type of damage is included in many basic home insurance packages. But policyholders shelling out potentially record sums for that coverage may still only see a fraction of what repairs, replacement, and rebuilding will actually cost.
Hurricane Helene crashed into an insurance sector facing a series of potentially existential questions, and a policy landscape in which the United States has left key decisions about how communities prepare for and recover from disasters in the hands of companies that exist to turn a profit—not provide protection.
“Right now, we’re essentially leaving all of these decisions about land use and where risk mitigation happens up to insurance companies,” says Moira Birss, a longtime organizer and fellow at the Climate & Community Institute.
Preventative risk reduction—for example, raising low-lying coastal homes up on on stilts—can offer as much as $13 in savings on disaster losses for every dollar spent, according to one 2019 study from the National Institute of Building Sciences. The burden of making those sorts of changes often falls largely on individual homeowners.
“Maybe your insurance company tells you directly, or your prices are rising and you get the message to put on a new roof or trim the trees around your house,” Birss told me. The problem is that a lot of people don’t have the money up-front to make those kinds of changes.”
IINTERVIEW -- Can Insurers Take the Lead on Climate Resiliency? | Insurance Thought Leadership
Insurers have the best data on where losses occur and what interventions could have prevented them, so they can play a key role in improving climate resiliency.
Climate risk is yet again front-page news. Early estimates of total economic loss from Hurricane Helene and its aftermath amount to $145 billion to $160 billion. However, the early estimates of insured losses for the event are significantly lower, at $5 billion to $10 billion. If these estimates turn out to be accurate, this would make the ratio of insured loss to economic loss the smallest among U.S.-landfalling hurricanes in recent decades and point to a significant protection gap.
With that context, ITL Editor-in-Chief Paul Carroll talked with Veronika Torarp, a partner with PwC, about how insurers can help improve climate resiliency.
S&P anticipates US insurers' earnings to take a hit from Helene
Early insured loss estimates from hurricane Helene currently sit in the mid-single to low-double-digit billions of dollars, however rating agency S&P Global believes that the losses will be an earnings event, rather than a capital event, for the primary US property & casualty (P&C) insurers that the agency rates.
Helene made landfall on September 26 in Northern Florida as a Category 4 storm with 140 mph winds.
The hurricane caused a large storm surge along various parts of the coast, while destructive wind gusts damaged properties from northern Florida to the Carolinas.
It’s important to highlight that Helene is the deadliest event to strike the US since the Hawaii wildfires in August 2023.
The hurricane claimed the lives of 215 people, making it one of the deadliest US hurricanes this century.
S&P noted that economic loss estimates of the Helene vary widely, depending on how measured, but current estimates are substantial.
As for insured losses, early estimates currently range between the mid-single to low-double-digit billions of USD.
The insurance response to ESG pressure in 2024
Whether you call it ESG (short for environmental, social, and governance), sustainability, or corporate responsibility, there is a growing pressure on today's companies to focus their impact on communities, the environment, and society as a whole.
Hamilton, Bermuda-based Aspen Insurance recently published its 2023 Sustainability report about its efforts in response to the current corporate environment surrounding ESG initiatives.
"Our report demonstrates Aspen's focus on strengthening the building blocks for a committed and progressive sustainability strategy," says Giselle Yeung, vice president of environmental, social and corporate governance, Aspen.
"In 2023, we created dedicated ESG roles in Governance and Investments, and formed a Sustainability Committee, which reports to our Group Executive Committee, believing that these strong foundations will guide us and keep us true to our values for years to come. The Aspen values and strong culture are a driving force for our activity in the sustainability space."
Donna Szatkowski-Zych, audit and assurance partner, Deloitte & Touche, is seeing that more organizations prioritize ESG capacity building, due in part to the increase in disclosure requirements from global regulatory bodies. In fact, Deloitte & Touche's 2024 Sustainability Action Report found an uptick in the prevalence of cross-functional ESG working groups, chief sustainability officers (CSOs), and ESG controller roles, indicating there is a greater appetite at the C-suite level to embed ESG governance and priorities into broader organizational strategies.
AXA Climate introduces new Altitude platform to aid business adaptation to climate change
AXA Climate, a division of the global insurance group AXA, has launched Altitude, an innovative platform aimed at helping businesses measure the impact of climate risks, create effective adaptation strategies, and comply with the Corporate Sustainability Reporting Directive (CSRD).
According to Théophile Bellouard, Director of Altitude by AXA Climate, the platform is powered by proprietary data derived from the latest IPCC report.
It provides companies with medium- and long-term climate risk assessments, taking into account local characteristics, industry specifics, and biodiversity to help organisations understand how climate risks affect their operations.
Severe Weather's Effects on Auto Claims
On July 2, 2024, Hurricane Beryl became the earliest Category 5 hurricane observed in the Atlantic Ocean on record, and only the second Category 5 hurricane to occur in July since 2005. Four hurricanes have now made landfall in the U.S. this year, including last week's devastating Hurricane Helene.
Weather has become more unpredictable in recent years, and weather events are affecting a much larger geographical footprint than they have historically. In our industry, preparations for these events, be they hurricanes, rain, heat, hail, etc., can be as nuanced as the events themselves.
Carriers and repair shops usually plan months, sometimes years, in advance of these events, analyzing historical storm data and predictive models to forecast potential impacts. Based on these insights, carriers may adjust underwriting guidelines and secure reinsurance, while repair facilities may collaborate with suppliers to ensure a steady supply of parts to minimize repair delays and staff up to manage the increased volume.
A Look Back - Hurricane Ian
To grasp the true impact of a hurricane, let’s dive into the impact of 2022's Hurricane Ian. CCC's monthly comprehensive estimate volumes were relatively consistent and predictable – at least until the hurricane made landfall in Florida, Georgia, and South Carolina in late September. Comprehensive estimates jumped 3X for the three states and almost 7X for Florida, alone.
With the mass influx of claims comes the immediate need to effectively triage, assign, appraise, and move vehicles. One of the most noticeable shifts is in who performs the initial appraisal. Because of the higher proportion of potential total losses and the sheer volume of inspections that need to be completed, carriers increase their reliance on staff appraisers – many of whom are part of a catastrophe team – and independent appraisers (IAs).
After Hurricane Ian, there was also a significant increase in the time it took for vehicles needing repairs to start the repair process after initial claims were assigned to a shop.
Kyle Krumlauf and Erik Bahnsen, CCC Intelligent Solutions
InsurTech/M&A/Finance💰/Collaboration
OneShield Expands Technology Ecosystem with Charlee.ai | Insurance Innovation Reporter
The integration will empower OneShield’s insurer clients to deliver faster decisions, reduce costs, and ultimately provide a superior customer experience.
The integration will empower OneShield’s insurer clients to deliver faster decisions, reduce costs, and ultimately provide a superior customer experience.
OneShield (Marlborough, Mass.), a provider of core business software solutions for insurance companies, has announced a strategic alliance with Charlee.ai (Pleasanton, Calif.), an AI platform specializing in machine learning and predictive analytics for insurance. The integration of OneShield with Charlee.ai will empower insurers with more efficient and accurate claims processing, further enhancing OneShield’s commitment to providing cutting-edge, AI-enhanced capabilities to its customers, according to a statement from the vendors.
As insurers face increasing pressure to streamline operations and leverage technology, integrating Charlee.ai’s advanced AI tools into OneShield’s core systems will provide insurers with the speed, accuracy, and flexibility required to stay competitive, the vendors say.
Financial Results
The world's largest P&C insurers, 2024 | S&P Global Market Intelligence
The world's top 50 property and casualty companies increased their collective premiums by nearly 9% year over year in 2023 against a backdrop of rising prices for insurance and reinsurance coverage.
The group's gross premiums earned, or insurance service revenues for IFRS 17 reporters, increased to a little less than $1.50 trillion in 2023 from $1.37 trillion in 2022, according to analysis by S&P Global Market Intelligence. Only one company in the top 50, Canada's Intact Financial Corp., reported a decline in insurance service revenues.
US personal lines powerhouse State Farm Mutual Automobile Insurance Co. topped the ranking, with $87.59 billion of direct premiums earned last year. The insurer held the same position in the prior year's ranking. State Farm was also the third-fastest growing company in the top 50 in 2023, with an increase in direct premiums earned of 18.3%.
The fastest-growing company in the group was Bermuda-based specialty insurer and reinsurer Arch Capital Group Ltd. Its gross premium earned rose 23.1% year on year to $17.02 billion in 2023 from $13.83 billion in 2022.
Innovation
Insurity Launches Document Intelligence, Powered by OIP Robotics, Utilizing AI to Enhance Data Extraction Accuracy and Efficiency for Insurers
Insurity Document Intelligence, powered by OIP Robotics, uses advanced AI to extract data from documents with 99% accuracy, reducing operational costs and enhancing efficiency and productivity
Insurity, the leading provider of cloud software for insurance carriers, brokers, and MGAs, today announced the launch of Insurity Document Intelligence, powered by OIP Robotics, to address the critical challenge insurers and MGAs face in needing accurate and efficient data extraction from documents. Insurity Document Intelligence, powered by OIP Robotics, exemplifies Insurity’s commitment to delivering high-quality data extraction solutions that address the specific needs of carriers and MGAs.
Insurity Document Intelligence introduces advanced capabilities in document AI vision and intelligent text extraction. These features leverage powerful machine learning tools to convert documents to structured data with 99% accuracy, importing it seamlessly into pre-integrated Insurity products. This high level of data extraction accuracy allows insurers to reduce operational costs by 60% and clear submissions 50% faster, enhancing overall efficiency and productivity.
The integration of Insurity with OIP Robotics enables carriers and MGAs to improve underwriting operations by significantly lowering submission turnaround times from hours to minutes. This allows underwriters to focus on complex risks while automating routine submissions, building better risk profiles, and improving market responsiveness.
In addition, Insurity Document Intelligence streamlines data collection processes by extracting full, complex datasets at high-speed using insurance-native AI models. Teams are empowered to complete work quickly, with built-in rules to review and resolve edge cases efficiently. The solution also minimizes costly errors by reducing human involvement in handwritten data extraction and ensuring data integrity through periodic checks and audits.
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