News
IIIHS: Technology shouldn't completely replace drivers
The Insurance Institute for Highway Safety (IIHS) is speaking out against the use of partially and fully autonomous vehicles, saying they could make roads more dangerous.
Speaking during a virtual Capitol Hill briefing March 7, IIHS’s president David Harkey said that while he supports many modern technologies including driver assistance tools, he can’t get behind self-driving cars.
“We firmly believe in technology for vehicle safety and the potential it has to reduce the tragic toll on our roadways,” Harkey told legislators in prepared remarks. “But I want to be clear about where we see the greatest benefits for vehicle safety technology. We believe it is critical for the driver to remain engaged in the driving task at all times and always be responsible for all actions of the vehicle. We do not believe in the promise of technology to completely replace drivers and for the vehicle to assume all responsibility for vehicle operations.”
Telematics Master Class: How Progressive Offers Competitive Prices
During an investor conference last week, Progressive’s leader revealed some subtle wording changes to the company’s purpose and vision. Unchanged, however, are four pillars of Progressive’s strategy, including one pillar labeled “competitive pricing.”
“Segmentation is a key facet of our competitive prices pillar, and nowhere is that more evident than in our investment in usage-based insurance products,” said Progressive CEO Tricia Griffith, introducing the topic of the day: telematics.
During the investor call, which took place in conjunction with the publication of Progressive’s 2022 annual report, Griffith, Jim Haas, head of personal lines telematics, and Cory Fischer, who recently led commercial lines product development, took turns reviewing a history of progress in telematics for personal and commercial auto.
Texas Watch digs into undervalued repairs & TLs, 3rd party appraisals 40% higher than carrier offer
As part of its advocacy for the mandatory right to appraisal in Texas, consumer advocacy group Texas Watch analyzed 1,246 auto insurance claims settled through independent appraisers. They found that, across all auto insurance claims, the appraisal award was an average 40% higher than the insurance offer.
Many car insurance policies include an appraisal clause that policyholders can invoke to have a third-party appraisal done when they don’t agree with their carrier’s valuation of their vehicle or damages. Low valuations often lead to improper indemnification for loss, and in some cases can lead to total loss determinations on vehicles that could otherwise be fixed. Both the carrier and the policyholder hire an independent appraiser and if the appraisers can’t agree, an umpire is selected to make the final decision.
The claims analyzed by Texas Watch were gathered from five Texas auto appraisers and 28 collision repair facilities.
On average, the appraisal award for repair claims was $5,307.35 higher than the carrier’s offer and total loss claims were $3,889.27 more. Appraisals increased settlement amounts by 131% on repair claims and 26% on TLs, on average.
Consumers 'losing interest' in big-tech insurance offerings
Consumers are losing interest in having insurance provided to them by big-tech companies like Amazon and Google, according to a new consumer survey from GlobalData.
The market research company asked more than 4,000 UK-based consumers about whether they would consider purchasing home insurance from a range of big-name ‘alternative providers’ – including tech companies, social media platforms and energy providers.
There was a marked drop-off in interest across all the companies GlobalData asked about, with consumers on average three percentage points less likely to consider purchasing insurance from an alternative provider. The steepest decline in interest was consumers purchasing home insurance from their energy provider, which scored over five percentage points lower than the same survey last year; high energy prices caused in part by Russia’s invasion of Ukraine have hiked up the cost of energy bills and created a rift between consumers and their energy providers.
The best-performing company is Google, with more than a fifth of respondents (22.2%) saying they would consider purchasing home insurance from the search giant. 16.7% of respondents say they would buy home insurance from Amazon (down three percentage points on last year) while just 11.5% would consider Apple (over two percentage points lower than 2021’s survey).
FTX’s Crash Exposes Insurance Black Hole That Risks Impeding Crypto Sector Recovery
A long road lies ahead to repair confidence in crypto after unprecedented bankruptcies and hacks, including the major challenge of giving investors a way of insuring against such events.
Stock brokerage accounts often come with some cover against outcomes like bankruptcy but digital-asset platforms provide few if any shields, a reality underlined by the November collapse of Sam Bankman-Fried’s FTX exchange.
The Surprising Effects of Remote Work: More Marriages, More Babies, Bigger Houses
Working from home could be making it easier for couples to become parents—and for parents to have more children.
In the past half century, Americans have had fewer and fewer babies with almost every passing decade; in 2020, the U.S. reported the lowest official fertility rate on record. But last year, statisticians observed a surprising baby bump. Researchers weren’t entirely sure what had happened. Maybe this was random noise. Maybe, like so many pandemic effects, it was a weird one-off phenomenon.
Work in Progress, a newsletter by Derek Thompson about work, technology, and how to solve some of America’s biggest problems.
InsurTech/M&A/Finance/Collaboration
You’ve Been Laid Off. Now What? Navigating InsurTech’s Workforce Transformation
Executive Summary Last year saw a wave of InsurTech layoffs, and experts say that trend is likely to continue as the industry battles economic uncertainty and a period of transition. Recruiters and formerly laid-off InsurTech employees share their best tips for employees to find new opportunities and employers to recruit and retain talent. Erie Insurance also shares some of its secrets to success, having never laid off an employee in its nearly 100 years in business.
Economic uncertainty, coupled with a period of transition in InsurTech, has led to a wave of layoffs for the industry. For InsurTech employees worried about potential layoffs, Steve McOrmond, senior content marketing manager at property/casualty and specialty InsurTech Federato, offered an acronym as advice: ABN, or always be networking.
“You shouldn’t just be on LinkedIn and contributing to the industry conversation when you’re laid off and looking for a new opportunity,” he said. “Always be networking and keeping an eye out for those uniquely great companies, impressive leaders and talented individuals that you might like to work with in the future.”
His advice comes from a place of understanding—McOrmond himself was laid off from commercial insurance InsurTech Chisel AI last year. This happened as the company announced it was winding down its operations in an April LinkedIn post.
Insurify CEO breaks down Inspop acquisition
Insurify, a virtual insurance agent that helps customers compare, purchase and manage policies, announced on March 6 that it has entered into an agreement to acquire Inspop USA, LLC and its subsidiary Compare.com.
Insurance Business spoke with the company’s CEO, Snejina Zacharia, who outlined how this acquisition will affect business for all parties involved, the future of online price comparison operations and the changing dynamics of insurance shopping.
While the fiscal details about the transaction were not disclosed, Zacharia said that this merger is an all-stock transaction. The deal was laboured over for some time and involved lengthy discussions on how Insurify’s business model aligns with Compare.com and Admiral Group, which owns 78% of Inspop.
“This is not a transaction that has come overnight,” said Zacharia. “We have always thought that there is a strong alignment of the two businesses because of Insurify’s AI tech platform and the very strong brand DNA that Compare and Admiral have created together.”
Zacharia stated that this business deal is also symbiotic in nature, “we believe that there are a lot of synergies between combining these two entities. We will certainly gain operational efficiencies, but we will also learn from Compare’s proficiency as a pioneer within insurance shopping, and Admiral’s internationalization expertise.”
As a result, Zacharia expects that Inspop and its roster of employees will be rolled into the Insurify umbrella, unifying each brand into one operation.
Click-Ins raises a $7.5 million funding round
Click-Ins, a Netanya, Israel-based AI SaaS company that enables the insurance and automotive industry to accurately detect and assess all damages on a vehicle, raised a $7.5 million funding round
The company will use the fresh funds to continue its accelerated growth and to expand and develop its proprietary product.
“The automotive field is undergoing a fundamental change, becoming smarter and more tech-oriented, affecting related fields. We are proud to be a part of this change and to contribute to the development and promotion of the insurance and automotive industry in order to prevent fraud and waste of money, and to enable accuracy and efficiency in outdated and complex processes,” said Doron Gohar, CEO of Click-Ins.
Click-ins is developing an automatic AI-based solution for examining the damage caused to vehicles based solely on images, taken from any mobile device in real-time. This development allows rental, insurance, and automotive companies to automatically discover, analyze, process, and evaluate external damages caused to vehicles with the highest precision and without the need for special equipment or skilled personnel.
Floodbase Selected to Provide a National, Near Real-Time Flood Intelligence System for the Federal Emergency Management Agency [FEMA]
Floodbase, the climate adaptation technology company that provides precise, near real-time data and analysis on flooding and flood risk to insurance companies and governments, has been selected through the Department of Homeland Security (DHS) Science and Technology Directorate’s Silicon Valley Innovation Program (SVIP) to strengthen FEMA’s flood analytics capabilities.
“For those affected by floods, any delay in providing relief can cause additional hardships. By combining the satellite imagery, hydrology data, and machine learning technology that Floodbase offers, the NFIP will be able to deploy vital resources to those who need it most, faster.”
As an SVIP participant, Floodbase will provide a national, near real-time flood intelligence system to improve the quality, efficiency, and speed of the NFIP’s damage estimations and insurance operations.
Floodbase’s flood intelligence system will consist of three elements:
-Daily flood monitoring through a combination of multi-satellite imagery composites and deep learning hydrology models. The result is a continuous map of flood severity every day, enabling Floodbase to capture the peak of any flood at the county and census tract level.
-Near real-time mapping of ongoing events, with post-event maps delivered within 72 hours of image capture to allow the NFIP to better understand the extent and depth of floodwaters.
-Improved forecasting data with the creation of triggers and thresholds including index-based approaches to improve FEMA’s flood damage estimates and alert FEMA about potential severe impacts to NFIP-insured properties.
The Builders Group taps into AI-powered solution
Insurance software provider Gradient AI announced that The Builders Group (TBG) is using its solutions to streamline claims and to better evaluate underwriting risks.
TBG offers workers’ compensation policies for contractors, builders, remodelers, subcontractors and suppliers. The group’s self-insured and member-owned workers’ compensation fund counts nearly 700 member companies.
In a release, TBG explained that it selected Gradient AI to reduce the cost of claims and improve its underwriting risk assessment. The solution is AI-powered, which means it learns from both TBG’s data and Gradient AI’s industry data with “tens of millions” of claims and underwriting records.
On the claims side, Gradient AI’s solution enables adjusters to conduct earlier claim assessments, evaluate risk KPIs, and drive better outcomes. And on the underwriting side of things, Gradient AI will help TBG assess risk more accurately for workers’ compensation policies.
Canada
Aviva Canada is piloting parametric coverage
Aviva Canada is launching a one-year pilot to test out a parametric rainfall coverage.
The new offering, powered by CelsiusPro, will provide coverage to insureds in the event of excess rain. The rainfall product includes two options: “Rain Season,” which covers against an excess in cumulative rainfall during the risk period, and “Rain Day,” which covers against excess rain days during the risk period.
Aviva Canada will initially offer the coverage to clients in areas such as construction and landscaping.