Telematics, Driving & Insurance
Outdated notions have stalled the promise and progress of insurance claims automation - Sfara
Crash detection services are central to the insurance industry’s heavily publicized goal of achieving claims automation. Without reliable on-scene crash detection, there is no automated and instant first-notice-of-loss (FNOL), or incoming data to initiate a claim.
Yet many insurance companies are not seeing reliable results from existing crash-detection vendors. The technologies these vendors are pushing have serious limitations and are not achieving the results required for widespread adoption or providing the necessary enterprise value. Decision makers within insurance are burnt on the topic, seeing vendor after vendor pitch commodity crash-detection services that look and smell the same and that still don’t meet their needs.
At the same time, these decision makers are stuck. Their organizations have long ago integrated with providers of driving-data solutions for programs such as usage-based insurance (UBI). These programs did not require technology capable of the nuance and complexity needed by today’s FNOL for claims automation.
Yet, these early solution-providers are trying unsuccessfully to stretch the capabilities of their outdated UBI technologies to meet the needs of the infinitely more complex claims automation process—without spending the necessary time and energy on ground-up R&D.
Sfara
News
Hurricane Milton likely to be at least a $20bn insurance loss event: BMS
While too early to pinpoint an accurate insurance loss range, BMS Group’s Senior Meteorologist Andrew Siffert has noted it is safe to say that Hurricane Milton will likely be at least a $20 billion insurance market event.
Hurricane Milton remains a powerful Category 5 storm with wind speeds of around 160 mph, according to the National Hurricane Center.
As Reinsurance News understands, Milton is forecast to weaken back to around Category 3 before landfall but is also expected to expand in size which will make the impacts over a wider area and also drive a higher storm surge.
“The worst-case scenario would involve Milton making landfall as a major hurricane along the Pinellas Peninsula, bringing the worst possible storm surge flooding into Tampa,” Siffert explained.
Tampa could avoid direct Hurricane Milton impact, though significant uncertainty remains: Morningstar DBRS - Reinsurance News
With the U.S. National Hurricane Center now placing the entry point of Hurricane Milton about 40 miles south of Tampa, Florida, Morningstar DBRS has suggested that insured losses could be “substantial but not catastrophic”, sitting in the $30 billion to $60 billion range, though significant uncertainty remains.
According to Morningstar DBRS, the large metropolitan area of Tampa sits “within the cone of uncertainty” as the storm’s trajectory could change in the hours before it makes landfall.
“Our initial insured loss projections if Hurricane Milton makes direct landfall in Tampa remain in the $60 billion to $100 billion range, potentially making Hurricane Milton’s insured losses on par with those of Hurricane Katrina, which reached $100 billion in today’s dollars and is still considered the costliest natural catastrophe in U.S. history,” Morningstar DBRS said.
The firm continued, “Milton’s destructive path will likely stretch far beyond the Florida coastline in the Gulf of Mexico and will also affect other major urban areas, including Orlando.
“The damage caused by recent storms, including Hurricane Helene, will compound the losses in regions still battling with recovery efforts.
Climate/Resilience/Sustainability
Hurricane Milton - The End of the Florida Insurance Experiment? -
I wanted to write some initial thoughts based on what we know at the moment. Obviously, this is a fluid situation and predictions can change between now and landfall.
I am going to assume for this post that Milton is a strong 3 hitting near Tampa, going through Orlando as a high 1 or low 2 and continuing on as a 1 or tropical storm into Daytona Beach.
Risks to Tampa
The most important thing to understand is the angle this storm is approaching from (west to east vs. normal south to north) is the absolute worst case scenario for Tampa Bay.
Back 20+ years ago, I spent a lot of time researching underrated hurricane risks. Number 3 on my list was New Orleans. That one happened pretty soon thereafter as the industry learned they didn’t properly understand the geological challenges around the city.
Number 2 on the list was New York City, particularly something coming through Battery Park and flooding downtown Manhattan. We got that a few years later with Sandy (though it was far from a worst case).
At the top of the list was Tampa and, specifically, a storm that came at it from the west. This was considered so unlikely that it was often ignored by people, but it is in the historical catalog (1848).
Commentary/Opinion
Why Homeowners Insurers Are Unprofitable and What To Do About It: Aon
A new report from insurance broker Aon reveals that the prospective return on equity (ROE) for diversified homeowners insurance carriers decreased by 100 basis points to 5.0% from last year’s ROE, despite carriers receiving significant rate increases in 2023/2024.
More than half the U.S. states under review produced negative ROEs for homeowners carriers, with nearly all states producing a carrier ROE below the 10% cost of capital hurdle after investment gains.
Reflections from WSIA 2024: How Video Telematics is Tackling Key Challenges in Commercial Insurance
After attending the WSIA '24 event in San Diego, I left with a wealth of insights on how commercial insurance is evolving in today's fast-paced, tech-driven world.
Conversations with industry leaders, underwriters, brokers, and tech innovators made one thing abundantly clear: the complexity of managing risk in commercial insurance is increasing, and so is the need for smarter solutions.
Among the many strategies discussed, one stood out as a true game-changer: video telematics. No longer a futuristic concept, video telematics is at the forefront of addressing some of the most persistent challenges commercial insurers face today. Here are some of the key issues discussed over the past few days.
Fraudulent claims create a significant financial burden for insurance companies, leading to annual costs in the millions of dollars. Video telematics enables insurers to capture real-time footage of incidents, providing undeniable evidence of what transpired. This footage, referred to as "ground truth," assists insurers in more effectively identifying and preventing fraudulent claims. This approach saves significant time and resources, allowing insurers to concentrate on legitimate claims and reduce expenses, ultimately resulting in improved profitability.
Dean Becker, Business Development Professional | Driving Technology for Safer Cities. Exploring Vision-based AI that connects drivers, fleets, insurers, and infrastructure
InsurTech/M&A/Finance💰/Collaboration
Embedded Insurance Leader Polly Announces Strategic Partnership with TruStage
Polly, the premier embedded insurance marketplace, today announced a strategic partnership with TruStage, a financially strong insurance, investment, and technology provider with more than 85 years of experience serving over 3,500 credit unions and their members across the United States.
Polly's advanced insurance platform and carrier partnerships will give members the ability to obtain instant online quotes, compare insurance options from available carriers, and choose the right carrier for their needs and budgets, all facilitated by Polly’s technology and award-winning insurance agents. Members can choose to interact with live insurance agents or utilize a fully digital quoting process, ensuring flexibility and accessibility.
Amwins and Floodbase launch parametric flood insurance for Californian municipalities - Reinsurance News
Amwins, a London-domiciled global speciality distributor, in partnership with insurtech Floodbase, has launched a municipal flood insurance program, designed to insure California municipalities against previously uncovered losses due to atmospheric river flooding.
California’s public sector has been largely unprotected from damages caused by atmospheric rivers, which annually on average cost the state more than a billion dollars. This leaves communities, critical facilities, and municipalities to cover damages or be subject to lengthy adjustment periods when losses occur, driven by the lack of viable existing insurance options, Amwins explains.
$17m Series B funding secured and Anthony Segal-Knowles named as CFO at Ledgebrook - Reinsurance News
Ledgebrook, an insurtech company, is pleased to announce the successful completion of a $17 million Series B funding round.
This strategic raise brings two distinguished Family Offices onto Ledgebrook’s cap table: Duquesne (which led the round) and The Stephens Group, alongside continued support from long-time partners Brand Foundry Ventures and American Family Ventures.
The new capital will help Ledgebrook scale its current operations and pursue new, innovative initiatives.
This strategic raise brings two distinguished Family Offices onto Ledgebrook’s cap table: Duquesne (which led the round) and The Stephens Group, alongside continued support from long-time partners Brand Foundry Ventures and American Family Ventures.
The new capital will help Ledgebrook scale its current operations and pursue new, innovative initiatives.
Legal System Abuse/Social Inflation
California congressman introduces litigation funding disclosure bill - Business Insurance
California Congressman Darren Issa Friday introduced a bill that would provide for the disclosure of third-party beneficiaries in civil litigation.
The measure would require at the outset of litigation the disclosure of investors that have a right to receive payment based on the outcome of a lawsuit.
Mr. Issa, a Republican, said in a July statement introducing a draft of the legislation that third-party litigation funding raises national security concerns because recent cases revealed intellectual property lawsuits were filed by Chinese-backed funders against U.S. companies.
Legal experts cite third-party litigation funding as a driving force of so-called social inflation, the trend of particularly large verdicts and settlements.
The American Property Casualty Insurance Association, an insurance industry group, encouraged members of Congress to support the legislation in a press release issued Monday.
Court Orders Start to Expose ‘Startling’ Data on Litigation Funding Sources
There is no federal law that requires the disclosure of litigation funding agreements in court cases, but some disturbing insight has been found in individual jurisdictions that have rules to increase transparency, according a panel on the topic at the American Property Casualty Insurance Association’s (APCIA) annual meeting.
“We don’t know the extent of it because there are so few jurisdictions that require disclosure, but in those few jurisdictions that have disclosure rules, it has been startling what has been uncovered,” said Paul Taylor, a fellow at the National Security Institute at George Mason University’s Antonin Scalia Law School, who served more than 20 years as counsel to the House Judiciary Committee’s Subcommittee on the Constitution and Civil Justice.
Insurers must adapt to stop nuclear verdicts before they begin
Nuclear Fallout: Outsized lawsuit awards damage American businesses, consumers and the economy.
Nuclear Verdicts® are driving social inflation, and are causing massive insurance losses and unmatched payouts, and will continue to do so if they remain unaddressed by the insurance industry and counsel.
These historically high settlements and verdicts are no longer limited to certain urban courthouses, known as "judicial hellholes," but rather are happening everywhere. New jury verdict records are being set almost daily.
And most importantly for the insurance industry, Nuclear Verdicts® are not happening to new defense lawyers and claims professionals. No, the shocking thing is, Nuclear Verdicts® are happening to the most experienced claims professionals and defense counsel. The best insurance professionals and defense counsel in America are not able to spot or stop Nuclear Verdicts®.