Research
P/C Premium Growth Shows Promise, But Profitability at Least a Year Away, Triple-I/Milliman Report Shows
Supply Chain Issues Linger Due to Geopolitics
Favorable first-quarter economic and underwriting results for property/casualty insurance are in line with projections that the industry will see a small underwriting loss in 2024 and achieve profitability in 2025, according to the latest forecasting report – Insurance Economics and Underwriting Projections: A Forward View – from the Insurance Information Institute (Triple-I) and Milliman, a collaborating partner.
“The ongoing performance gap between personal and commercial lines #insurance remains, but that gap is closing." -- @iiiorg Chief Insurance Officer Dale Porfilio. @MillimanInsight
Some highlights of the report include:
- Homeowners insurance underwriting losses expected to continue for 2024-2025, but the line is expected to become profitable in 2026, with continued double-digit net written premium growth for 2024-2025.
- Personal auto net combined ratio improved slightly from prior estimates and is on track to achieve profitability in 2025.
- Commercial lines 2024 net combined ratio remained unchanged despite shifts in commercial property (-1 point), workers’ compensation (-1 point), and general liability (+1 point).
- Net written premium growth rate for personal lines is expected to continue to surpass commercial lines by over 8 percentage points in 2024.
Majesco's 10th Annual Strategic Priorities Survey
Thank you for participating in our tenth annual Strategic Priorities survey. The collective responses from you and your insurance company peers will provide useful insights into the opportunities in the industry and how different segments of players are approaching them. - Majesco
All individual responses will remain anonymous; only aggregated results will be used for analysis and reporting.
Everyone who completes the survey can receive a free copy of the report. The first 150 people who complete the survey will get a $10 Starbucks e-gift card, and will also be entered into a drawing to win one of five $50 Amazon.com Gift Cards (email address required so we can send it to you).
Thank you for participating!
P.S. The survey works on all screens but works best on your desktop/laptop. You can pause and return later to where you left off - just click on the "Save and Continue" button on the top of the page.
News
Aon forecasts stable US property re/insurance after hurricanes
Aon forecasts stable US property re/insurance after hurricanes
Aon projects that recent hurricanes Helene and Milton are unlikely to adversely affect the US commercial property re/insurance market.
The combined insured loss estimates for the storms, which struck the Florida Gulf Coast within two weeks, are expected to range between $34 billion and $54 billion. The insurance and reinsurance markets remain well-capitalized, positioning them to absorb these losses effectively.
The short-term impact on market conditions is not expected to lead to a hardening trend. In its report, Aon Reinsurance Solutions estimates that the 2025 renewal environment will remain stable, partly due to rate increases and retention adjustments implemented in 2023.
These adjustments are expected to keep industry loss ratios from Hurricane Milton near anticipated levels, according to Tracy Hatlestad, executive managing director and global property segment leader with Aon.
Collision Claims and Losses Continued Down Trend in Second Quarter Compared to 2023 - CollisionWeek
Quarterly collision claim counts were down for the fifth quarter in a row compared to the previous year.
The latest available Fast Track Monitoring system data from the Independent Statistical Service Inc. (ISS) showed that the decline in collision claims continue as claims on a quarterly basis were down for the fifth consecutive quarter compared to the previous year. Losses were also down on a quarterly basis compared to the same quarter last year for the fourth month in a row.
Collision coverage claims for the second quarter of 2024, at over 1.44 million, were down more than 150,000, or 9.4%, compared to the second quarter of 2023. This marks a continued erosion in claims from the 6.3% decline in the first quarter of 2023, the 4.1% decline in the fourth quarter of 2023, as well as the 3.0% decline compared in the third quarter of 2023, and the 2.0% decline in the second quarter of 2023 compared to the previous year.
2025 PREDICTIONS
Insurers predicted to pass claims expenses to customers again in 2025
Forrester: At least five carriers will exit the auto insurance market in 2025
Insurers will continue passing higher costs of rising claims expenses to their customers in 2025, according to a report by Forrester.
Despite higher budgets, ongoing demand for tech and product innovation "won't bear much fruit", Forrester said, and AI adoption "will play a subordinate role to other business priorities."
In 2025, Forrester predicts an increasing reliance on embedded and usage-based products to drive top-line growth and improve customer experience.
Forrester's predictions for the insurance industry in 2025 include:
Growth in usage-based insurance will raise Customer Experience Index (CX Index) scores by at least one point. In 2024, auto and home insurers' CX Index scores fell in the U.S. and Europe. Less than half of customers in those markets say that insurance is worth the price.
Embedded insurance will grow by at least 30%, predominantly in personal lines.
Tech spending will rise by 8% year over year. Over one-third of insurers will increase spend on super apps, omnichannel experiences, and claims management systems.
Fewer than 5% of insurers will reap tangible, direct AI gains. Adopting and implementing real-time AI/genAI capabilities and applications lags behind other items like improving data and analytics technology usage.
At least five carriers will exit the auto insurance market. There have been notable shifts in auto claims severity (up by 20%) and frequency trends (down by 3%) due to technological advances in vehicles and the increasing influence of plaintiffs' bar, leading to social inflation.
Financial Results
Lemonade Remains in the Red With $68M Loss in Q3
Lemonade Remains in the Red With $68M Loss in Q3
Insurtech Lemonade reported a third quarter 20243 net loss of nearly $68 million and a year-to-date loss of $172.2 million.
Results were in comparison to a net loss of $61.5 during the same quarter and a loss of $194.5 as of Sept. 30 last year.
In a letter to shareholders, Lemonade said its Q3 gross loss ratio went down 10 points to 73 (net loss ratio was 81 compared to 88 a year ago) but its operating expense increased 27% to $124.5 million, driven by growth spend for new customers. Growth spend included in sales and marketing expense was about $40 million in Q3 2024 compared to $12.6 million in Q3 2023.FULL ARTICLE
Mobility
4 ways connected car technology challenges mobility for the better
🔖 This article was repurposed from the Smartcar blog. Read the full version here
The connected car market has grown exponentially in recent years, driven by the promise of enhanced safety, convenience, and a more connected driving experience.
Yet, as automakers push to capitalize on connected car data, they face significant challenges in meeting profit expectations. This blog delves into the intricacies of connected car technology, exploring its definition, impact, and the hurdles it must overcome to fulfill its potential in our evolving transportation ecosystem.
The global connected car market reached $84.9 billion in 2023 and is expected to triple in size over the next decade.
But, despite these advancements, car manufacturers have only generated about $6 billion in revenue from connected services, far below the projected $200 billion. Does this mean that we’re not ready for connected car technology? Not at all.
In fact, it indicates a gap in awareness of what it is and its impact on everyday mobility experiences.
Warren Logan, former Oakland Policy Director of Transportation and Government Affairs, discussed sustainable mobility with Smartcar and shared that he envisions the intersection of mobility and technology to expect more from our transportation systems.
“I think that the entrance of tech companies into the mobility space has, for the better, really pushed government, private actors, and everyday citizens to rethink how we make transportation decisions, our mobility options, access outcomes, and so on,” he says.
The maturity of connected car technology and application development helps consumers, governments, and mobility businesses reimagine the solutions that drive our current transportation system. Here are a few examples of how connected car innovation shines new perspectives on existing shortcomings.
Claims
Claims industry sees rise in new employees, more use of tech: Report
The workers compensation sector is attracting more employees new to the industry, training them more and giving them more access to technology, according to Rising Medical Solutions LLC’s benchmarking study released Wednesday.
Based on 2023 data, the latest report is the 11th edition of the annual report and is based on responses from about 1,300 claims professionals, the Chicago-based managed care company said.
The report showed an increase in the number of claims adjusting staff with one to five years’ experience, 25% in 2023 compared with 21% in 2019, and five to 10 years’ experience, 21% compared with 13%, but a proportional reduction in more experienced staff. The authors said the change reflected a positive trend in attracting and retaining new talent.
Awards
Insurtech Israel Wins Best Collaboration - Insurtech Israel News
[Ed. Note: We observe and congratulate Insurtech Israel - Kobi Bendelak for the many successes, supporting startups, investors and collaborating broadly within the insurance ecosystem.]
A prestigious recognition that highlights the innovation and excellence of the Israeli insurtech ecosystem
Insurtech Israel is proud to announce that it has been awarded the Best Global Insurance & Insurtech Collaboration at the prestigious Global Insurtech Awards. This accolade underscores the organization’s commitment to driving innovation and excellence within the insurance industry and represents a significant milestone for Israel on the global stage.
“This honor reflects the hard work and innovation of our exceptional startups, who are pushing the boundaries of insurance and driving the industry toward a more advanced, high-quality future. Their dedication is at the heart of everything we do. Over the past seven years, we’ve built a remarkable success story in the international insurtech landscape. Through unwavering support for our startups, we’ve created an ecosystem that fosters innovation, collaboration, and growth. Together, we are shaping the future of insurance and demonstrating the power of partnership,” said Kobi, CEO of Insurtech Israel.
Kobi, CEO of Insurtech Israel
People
One Inc Strengthens Executive Leadership Team with New COO and Chief Network Officer
Industry Veterans Tim Boyle and Eileen Dougherty to Drive Key Initiatives Amid One Inc's Significant Growth and Future Expansion
One Inc, the leading payments network for the insurance industry, today announced the addition of two new executives to strengthen its leadership team and drive the company’s continued growth. Tim Boyle joins as Chief Operating Officer (COO), while Eileen Dougherty takes on the role of Chief Network Officer.
These strategic appointments underscore One Inc’s continued commitment to placing carrier-customers at the center of all operations, while serving as a trusted advisor in the digital transformation of the insurance industry.