Research
The “Golden Age of Specialty” continues in the Q3 releases of these specialty companies...
Differentiated top-line growth, lower-than-anticipated cat losses, and continued nervousness surrounding older accident years (and even recent accident years) are some of the key topics emerging this earnings season.
Another development that has also continued to play out is the outperformance of the specialty peer group. Of the seven P&C insurers examined below, four have outpaced their earnings per share expectations. Of those four, three are specialty insurers (WR Berkley, RLI, and Kinsale).
For the first nine months of the year, the specialty cohort outperformed regionals and larger commercial players across underlying combined ratio, reserve development, growth, net investment income, and book value growth.
The quarterly growth trajectory is strong, but will modestly decline going forward.
One of the defining events of this hardening phase has been the so-called Golden Age of Specialty. Although surplus lines markets have historically catered to liability lines, in recent years, property has shown a heavy migration into the wholesale channel. Other liability occurrence lines have also started to show strong flow into E&S in recent months, as a microcycle in excess casualty kicked off.
This E&S presence has allowed these carriers to pull ahead, as shown in the graph below. For Q3, specialty carriers have continued to grow, as shown in the chart below, although there is greater acceptance, as discussed on the earnings conference call, that the trends will start plateauing from here.
AAA says AEB has drastically improved for avoiding collisions at up to 35 mph
New research from AAA has found that 2024 model year vehicles equipped with automatic emergency braking (AEB) avoided all forward collisions when tested at speeds up to 35 mph. In comparison, 2017 and 2018 models avoided collisions 51% of the time, according to AAA.
Over the last decade, AAA has evaluated various advanced driver assistance systems, including AEB, to determine if the technology performs as expected, a news release says. While these systems continue to be refined with upgraded software and sensors, AAA wanted to see if AEB functionality has improved when compared to older versions.
“Since we began testing AEB in 2014, the advancements by automakers are commendable and promising in improving driver safety,” said Greg Brannon, AAA director of automotive engineering research, in the release. “There is still significant work ahead to ensure the systems work at higher speeds.”
News
Judge approves Baltimore bridge collapse settlement
A federal judge Friday approved a $102 million settlement by the companies that owned and operated the ship that struck Baltimore’s Francis Scott Key Bridge in March, killing six people.
The payment, approved by U.S. District Judge James Bredar, resolves the civil claim the Department of Justice filed in September seeking $103 million from two Singaporean companies, Grace Ocean Private Ltd. and Synergy Marine Private Ltd.
A spokesperson for the companies said Friday they had agreed to pay even though they deny liability. The spokesperson also noted the companies are fully insured for the settlement costs and that no punitive damages have been imposed.
The settlement covers money the U.S. government spent responding to the disaster and clearing the wreck of the container ship Dali ship and bridge debris from the Port of Baltimore so the waterway could reopen in June.
The state of Maryland, which estimates it will cost $1.7 billion to $1.9 billion to rebuild the bridge and anticipates completion by fall 2028, separately filed claims against the companies for the cost of the bridge, cleanup efforts, environmental claims and other costs.
Commentary/Opinion
Ratings agency ‘concerned’ Fla. insurers may be unfairly denying hurricane claims
Executives of Florida-based Weiss Ratings agency are raising alarm about the high number of claim denials in the wake of Hurricanes Helene and Milton, calling it a “double tragedy” for the state’s homeowners.
“The sheer volume of denials is shocking, especially after the homeowner has paid diligently all his premiums and is following all the rules,” Martin Weiss, Ph.D, founder, Weiss Ratings, said.
Florida currently has some of the highest premiums for home & auto insurance in the nation. Around one in seven homeowners has opted to go uninsured, and there is a significant gap in flood insurance coverage.
Despite this, early reports from the Florida Office of Insurance Regulation reveal 60% to 80% of claims related to the most recent hurricanes have gone unpaid. Nearly 40,000 of the around 360,000 claims received have already been denied.
According to Weiss Ratings, homeowners are facing months-long processing times, and many are not receiving full payments.
“This is a tragedy for anyone who is having to make a claim because their home has been destroyed, whether it’s by Helene or Milton or any of the others that have happened in the last year or so,” Gavin Magor, director of research and ratings, Weiss Ratings, said.
“It’s very discouraging for homeowners to have, A, paid high premiums, B, suffered severe damage and, C, now being victimized twice, adding insult to injury. It’s tragic,” Weiss added.
Financial Results
The Hartford Announces Excellent Third Quarter 2024 Financial Performance
Increased quarterly common dividend per share by 11%
Third quarter 2024 net income available to common stockholders of $761 million ($2.56 per diluted share) increased 18% from $645 million ($2.09 per diluted share) over the same period in 2023.
Net income ROE for the trailing 12 months of 20.0% and core earnings ROE* of 17.4%.
Property & Casualty (P&C) written premiums rose 10% in third quarter 2024, driven by - - Commercial Lines and Personal Lines premium growth of 9% and 12%, respectively.
Commercial Lines third quarter combined ratio of 92.2 and underlying combined ratio* of 88.6.
P&C current accident year (CAY) catastrophe (CAT) losses in third quarter 2024 of $247 million, before tax, including losses from Hurricane Helene of $104 million.
Group Benefits third quarter net income margin of 8.8% and core earnings margin* of 8.7%.
Returned $538 million to stockholders in the third quarter, including $400 million of shares repurchased and $138 million in common stockholder dividends paid. Increased the quarterly common dividend per share by 11%, to $0.52, payable Jan. 3, 2025 to shareholders of record at the close of business on Dec. 2, 2024.
"The Hartford delivered an excellent quarter with a trailing 12-month core earnings ROE of 17.4 percent,” said The Hartford’s Chairman and CEO Christopher Swift. “Commercial Lines once again generated strong top-line growth at highly profitable margins, Personal Lines continues to make progress toward restoring target profitability in auto, Group Benefits margin remained strong, and all businesses benefited from a consistent contribution from the investment portfolio.”
CCC Intelligent Solutions Holdings Inc. Announces Third Quarter 2024 Financial Results
CCC Intelligent Solutions Holdings Inc. Announces Third Quarter 2024 Financial Results
CCC Intelligent Solutions Holdings Inc. ("CCC" or the "Company") (NASDAQ: CCCS), a leading cloud platform provider for the P&C insurance economy, today announced its financial results for the three months ended September 30, 2024.
"CCC delivered solid third quarter results, highlighted by 8% year-over-year revenue growth and 43% adjusted EBITDA margin. Our sustained performance in 2024 year-to-date reflects multiple new business wins, renewals, and contract expansions across our customer groups," said Githesh Ramamurthy, Chairman & CEO of CCC.
Climate/Resilience/Sustainability
Climate change and natural catastrophes pose significant threats to the insurance industry
Severe weather and natural catastrophes pose a significant threat to the insurance industry, a GlobalData poll has found.
A GlobalData poll conducted in Q2 2024 showed that 25.2% of industry insiders consider severe weather and natural catastrophes one of the biggest threats to the insurance industry.
Severe weather and natural catastrophes pose a significant threat to the insurance industry, a GlobalData poll has found. Meanwhile, regulators and insurance leaders in Australia have discussed at a government inquiry’s public hearing whether the extreme losses from climate-driven disasters could lead to the collapse of the insurance industry.
A GlobalData poll conducted on Verdict Media sites in Q2 2024 showed that 25.2% of industry insiders consider severe weather and natural catastrophes one of the biggest threats to the insurance industry. While cyber risk topped the list at 36.6%, severe weather outranked political risk (15.1%), regulation (11.3%), and macroeconomics (6.7%).
Awards
NJM Insurance Group Ranked by J.D. Power as the #1 Insurer for Auto Claims Satisfaction
NJM Insurance Group (NJM) has been named #1 in the nation in the J.D. Power 2024 U.S. Auto Claims Satisfaction Study (ACS). This prestigious recognition is based on feedback from auto insurance claimants from insurance companies throughout the country.
The study ranked auto insurance claimant satisfaction in the following categories (referred to by J.D. Power as "Dimensions"): Ease of Starting Claim, Ease of Resolving Claim, Digital Channels, People, Communications, Trust, Fairness of Claim Settlement, and Time to Settle Claim. NJM placed first in each and every one of the eight categories.
"This recognition demonstrates NJM's century-long commitment to policyholder service." Mitch Livingston, NJM President and CEO
"This recognition demonstrates NJM's century-long commitment to policyholder service," said Mitch Livingston, NJM President and CEO. "We are honored that our policyholders have ranked us number one in the nation in the J.D. Power 2024 Auto Claims Satisfaction Study."
"NJM has set the standard for claims excellence by taking top marks in all eight Dimensions of the 2024 Auto Claims Satisfaction Survey Study," said Mark Garrett, Director, Insurance Intelligence, J.D. Power. "The company's attention to improving the customer experience has resulted in a demonstrable increase in trust and satisfaction among policyholders."
This is the second auto insurance claims related recognition by J.D. Power this year. In September, NJM was certified for the 7th consecutive year by J.D. Power for providing "An Outstanding Auto Claims Experience."
CCC Intelligent Solutions Selected for PropertyCasualty360’s 2024 Insurance Luminaries Recognition
*The CCC Intelligent Experience (IX) Cloud™ Recognized for Technology Innovation**
CCC Intelligent Solutions Inc. (CCC), a leading cloud platform powering the P&C insurance economy, announces today that it has been named to PropertyCasualty360’s Insurance Luminaries Class of 2024 in the category of Technology Innovation. This recognition highlights the CCC Intelligent Experience (IX) Cloud™ platform, which delivers real-time insights and AI-powered automation to enable faster, more informed business decisions across the ecosystem of providers that come together to bring drivers back to pre-accident condition. The Insurance Luminaries program spotlights top professionals, teams, organizations, programs, practices and products that strive to modernize and humanize the P&C insurance business.
“CCC is honored to be recognized in the Technology Innovation category for our CCC IX Cloud platform," said John Goodson, chief product and technology officer at CCC.
“The industry is reaching a critical inflection point, where reliance on historical data alone is no longer sufficient to meet evolving customer needs. Companies will need real-time insights and predictive data to respond effectively as business events unfold. The IX Cloud was designed with this shift in mind, supporting customers in making smarter, data-driven decisions by delivering timely insights that inform next best actions. This recognition underscores our commitment to delivering intelligent solutions that empower our customers to operate at the speed of change in an ever-evolving industry.”
The CCC IX Cloud™ is the new core of CCC's technology, amplifying the efficiency and intelligence of CCC’s solutions. With the powerful combination of an event-based architecture and industry-leading AI, the IX Cloud supports real-time decision-making and automation across the P&C ecosystem By integrating data and AI, it transforms linear workflows into dynamic, concurrent processes, creating intelligent experiences that help businesses operate faster and more effectively.
Recommended Events
PropertyCasualty360 editorial outlines 5 ways sensors are preventing crashes
OEM Summit Session II “How Telematics Technologies Are Evolving the Consumer Experience” will dive into the issue and how it relates to drivers, the vehicle, collision repair businesses and auto insurance providers.
The session will be Thursday, Nov. 7 at 2 p.m. to 3 p.m. in S233 at SEMA in Las Vegas.
Speakers Hilary Cain, Alliance for Automotive Innovation senior vice president of policy, John Eck, head of product for Collision Assistance at GM Enterprise Innovation and Ryan McMahon, Cambridge Mobile Telematics senior vice president of strategy and corporate development will lead the discussion.
Telematics, Driving & Insurance
Road Risk Alert: Beware of the roads on Halloween. Distraction spikes at night. - Cambridge Mobile Telematics
This Halloween, the real scare isn’t the costumes or haunted houses. It’s the spike in distracted driving and speeding that makes the holiday so dangerous for drivers, passengers, and trick-or-treaters — particularly at night.
A new CMT analysis reveals a 3.7% increase in distracted driving compared to other Tuesdays in October. Distraction reaches its highest point during trick-or-treating hours, from 7:00 p.m. through 9:00 p.m.
The spike in distraction dramatically increases crash risk during trick-or-treating on Halloween. With more pedestrians out, the stakes couldn’t be higher.
Webinars/Podcasts/Interviews
AM Best TV Presents “How Insurers Are Incubating Their Own Technology”
AM Best TV Presents “How Insurers Are Incubating Their Own Technology”
In the opening installment of AM Best's four-part cross-media series on insurance technology, a panel of industry experts explores why companies are developing their own technology incubators and the motivations for why it will likely continue.
Tune in to hear from these industry leaders:
- June Quah, vice president, integrated analytics, Munich Re Life US;
- Eric Weisburg, senior principal, Datos Insights; and
- Scott Hawkins, managing director, head of insurance research, Conning.
This episode is part of AM Best’s four-part cross-media series, “Pushing Back the Risk Frontier: How Insurers Are Co-Opting the Insurtech Playbook.”
People
Verisk CEO Lee Shavel appointed to U.S. Federal Advisory Committee on Insurance - InsurTech Analyst
Verisk, a global leader in data analytics and technology, has announced that its president and CEO, Lee Shavel, has been appointed to the Federal Advisory Committee on Insurance (FACI).
Shavel, who has led Verisk’s client-centric strategy, will be playing a pivotal role in shaping industry policy through his new position at FACI, according to InsurTech Insights.
His leadership has been instrumental in expanding Verisk’s partnerships with key players in the insurance space. Shavel has also driven Verisk’s investments in AI and other emerging technologies, positioning the company at the forefront of the insurance ecosystem.
In addition to his responsibilities as Verisk’s CEO, Shavel is a recognised thought leader in the insurance industry. He regularly contributes to Insurance Journal, where he shares insights on emerging risks that the sector faces. His appointment to FACI further cements Verisk’s influence within the insurance landscape.