News
Allstate Says It’s Ready to Grow Homeowners Line [Except in Florida and California] | Insurance Forums
Allstate Says It’s Ready to Grow Homeowners Line With All 3 Distribution Channels
Allstate said it sees opportunity where others may not — in homeowners insurance. And the insurer plans to use all three distribution channels to do it.
Due to rising trends in the frequency and severity of weather-related losses and in inflation, some insurers have elected to either pull away from some geographies or leave the homeowners business entirely. Allstate said during a recent earnings call that it is ready to step in where margins are good.
Rizzo said Allstate homeowners insurance net written premiums increased almost 11% and policies-in-force grew 2.5% during the third quarter, and the business turned in a 98.2 combined ratio with $60 million of underwriting income compared to a loss of $131 million for the third quarter last year. ....
“We do think there is more growth potential there,” Wilson said during the call. “Some of that is many people have decided not to grow in homeowners. And that gives us more opportunity, not just through Allstate agents, but in particular through independent agents. And I think we should be able to crack the code on direct.” .... However, Allstate won’t be looking for homeowners market share in Florida and California and the insurers will “continue to manage PML (probable maximum loss) and coastal exposure.”
AI in Insurance
New Cake & Arrow Report Explores How AI Can Humanize the Insurance Experience, Ushering in a New Golden Age for the Industry
Cake & Arrow, a UX Design and Product Innovation agency for the insurance industry, has released a new report exploring how artificial intelligence (AI) can transform insurance into a more human experience. As insurance companies look to AI to streamline and optimize, the report sheds light on a different, more human-centered approach to using AI to foster transparency, accessibility, and empathy across the insurance value chain.
Despite the industry's emphasis on AI for cost-cutting and efficiency, Cake & Arrow's report stresses how AI can do more than automate and cut costs. With the power to clarify complex policies, streamline claims processes, and enhance the work of insurance professionals, a more human-centered approach to AI can strengthen relationships between insurers and policyholders while ensuring that efficiency never comes at the cost of a good human experience.
The report, A new golden age for insurance? How AI can help make insurance a more human experience, discusses:
How current AI and other technology applications often miss the mark by focusing on cost reduction and operational efficiencies rather than enhancing the human experience, revealing opportunities to build trust through transparency and accessibility.
Innovative examples of how AI can, when prioritizing human experience, address persistent industry challenges with fairness, equity, and a focus on human dignity in a way that no technology has been able to before.
New ways insurers can leverage AI to make coverage more equitable and accessible, addressing underserved communities and simplifying processes that have traditionally created barriers to entry.
How insurers can tackle the cyber insurance risk of deepfakes -
A legal expert is urging insurers to keep abreast of the risks and liabilities associated with one of the most rapidly-evolving and complex forms of cyber crime — deepfakes.
“They certainly should be paying attention to this. While the use of a deepfake alone may or may not implicate insurance issues either for an insurance company or for a purchaser of insurance, they implicate a lot of other issues and, in our view, can give potential rise to potential liability,” Andy Moss, partner, Insurance Recovery Group at Reed Smith, said.
He noted that the risk is particularly “great” for businesses that provide professional services, such as law firms, doctor offices or advertising firms. However, he emphasized that insurers should be careful not to “overreact” to these concerns. Instead, he suggested they discuss coverage options with their clients, including: commercial general liability, fiduciary liability and cyber insurance coverage.
What is a deepfake?
A deepfake is an image, video or audio that imitates a real or fictional person using sophisticated artificial intelligence. Deepfakes can appear quite realistic and be difficult to distinguish from real life.
“I think companies have to be very careful with it. As part of their risk management, they should understand and evaluate whether their insurance may potentially respond to particular risks they might face. If not, they should identify those gaps, and our advice would be seek to fill those gaps,” Moss said.
Research
US insurance spending soars to $3.8 trillion in 2024, set to rise further
It is projected to reach $4.5 trillion by 2029
US insurance spending soars to $3.8 trillion in 2024, set to rise further
Since 2017, US insurance spending has surged by 44%, adding $1.2 trillion to what Americans pay for health, life, home, and other insurance products, according to Stocklytics.com.
By 2024, the nation’s total insurance expenditures are projected to reach $3.8 trillion, with forecasts suggesting a further increase to $4.5 trillion by 2029, reflecting a 20% rise.
The United States remains the largest insurance market globally, with Americans spending significantly more on insurance than residents of other major markets, including China, the United Kingdom, Japan, and Germany.
This spending gap is expected to widen over the next five years, as US insurance expenditures will surpass combined European and Asian insurance spending by an estimated $650 billion by 2029.
45% Rise in Home Insurance Losses: Key Factors Explained| LexisNexis Risk Solutions
Explore the four key factors behind a 45% rise in home insurance losses from 2017-2023.This significant rise has puzzled many in the insurance industry. Taking a closer look at the data covering these last six years, I identified four reasons behind these notably adverse losses.
1.Substantial increase in catastrophic losses — The primary reason is the substantial increase in catastrophic losses paid between 2017 and 2023, with a staggering 39% rise due to catastrophic events alone. Climate change has led to a surge in such events and their origins.1 Wildfires, hurricanes, winter freezes, floods, severe storms and convective activity have all become more frequent. Additionally, the severity of these catastrophic events continues to escalate. The combination of higher frequency and severity of catastrophe losses is one of the underlying causes.
2.U.S. migration patterns — Catastrophic losses are also rising due to U.S. migration patterns. 2020 Census data shows steady population growth in catastrophe-prone areas in the south, west and parts of the mid-west as a result of internal migration. Growing destinations in southern states are more exposed to hurricanes, while western states face a higher risk of wildfires and the mid-west experiences severe convective storms. Accrued migration has led to more insurable homes exposed to catastrophes. In fact, the percentage of home losses paid due to catastrophic events rose from 39% to 46% of total losses paid in the last six years.
3.Cost of labor and building materials — This is a familiar topic that applies to both catastrophic and non-catastrophic events. Inflation and labor shortages have driven up the costs to maintain, repair and replace homes. These are primary causes for non-catastrophic losses paid. The increase in non-catastrophic losses from 2017 to 2023 is a staggering 53%. Simply put, the cost of home building materials and labor has risen significantly, contributing to higher non-catastrophic losses.
4.Shift in perils — There have been fewer theft and liability claims in the U.S. between 2017 and 2023. This is likely due to behavioral changes, such as more people working from home and more cautious domestic social activities. Unfortunately, these decreases have been more than offset by a significant rise in other perils. Weather events, both catastrophic and non-catastrophic, have driven up insured home losses, with combined hail and wind losses increasing by 47% during the last six years. Home insured losses paid due to fire and lightning increased by 45%. Weather-related water losses, driven solely by weather events, increased by an astonishing 66%. Such escalation is probably, in part, because of inflation, which has driven up the costs of materials and labor.
Additionally, the rising cost of home maintenance is possibly driving some homeowners to delay or reduce maintenance, making their homes more susceptible to losses.
Financial Results
GEICO Reports Premiums Written Up 7.3% in Third Quarter - CollisionWeek
Collision claim frequency was down 8-9% in the third quarter compared to last year.
Berkshire Hathaway reported its earnings for the third quarter of 2024 on November 2, including details about its GEICO subsidiary, the third largest private passenger auto insurer in the U.S.
GEICO’s pre-tax underwriting earnings were $5.747 billion in the first nine months of 2024, up $3.477 billion or 153% from $2.27 in the first nine months of the previous year. According to the company, the improvement reflected higher average premiums per auto policy, lower claims frequencies and improved operating efficiencies compared to 2023, partially offset by less favorable development of prior accident years’ claims estimates, a rise in average claims severities and an increase in catastrophe losses.
CNA Financial reports 10% growth in premiums, Q3 net income uptick | Insurance Business America
Strong new business and stable retention drive quarterly premium increases
CNA Financial reports 10% growth in premiums, Q3 net income uptick
CNA Financial Corporation reported in the third-quarter 2024 net income of $283 million, or $1.04 per share, an increase from $258 million, or $0.95 per share, in the same quarter last year.
The quarter’s net investment losses were $7 million, down from $31 million in the prior year quarter. Core income for the quarter reached $293 million, or $1.08 per share, up from $289 million, or $1.06 per share, a year earlier.
The property and casualty (P&C) segments contributed $346 million in core income, a slight decline of $5 million compared to the previous year, influenced by offsetting effects of higher catastrophe losses and increased investment income.
The P&C segments, excluding third-party captives, recorded gross written premium growth of 9% and net written premium growth of 8%. This growth was supported by a 15% rise in new business, a retention rate of 85%, and a renewal premium change of 5%.
Erie Indemnity Reports Third Quarter 2024 Results
Erie Indemnity Company (NASDAQ: ERIE) today announced financial results for the quarter and nine months ending September 30, 2024. Net income was $159.8 million, or $3.06 per diluted share, in the third quarter of 2024, compared to $131.0 million, or $2.51 per diluted share, in the third quarter of 2023. Net income was $448.3 million, or $8.57 per diluted share, in the first nine months of 2024, compared to $335.1 million, or $6.41 per diluted share, in the first nine months of 2023.
3Q 2024 Highlights
Operating income before taxes increased $31.7 million, or 21.3 percent, in the third quarter of 2024 compared to the third quarter of 2023.
- Income from investments before taxes totaled $19.5 million in the third quarter of 2024 compared to $12.3 million in the third quarter of 2023. Net investment income was $17.3 million in the third quarter of 2024 compared to $14.6 million in the third quarter of 2023. Net realized and unrealized gains were $2.9 million in the third quarter of 2024 compared to losses of $2.2 million in the third quarter of 2023.COMPLETE LIST
Innovation
Shipshape Launches Private Label App Platform, Offering Custom-Branded Smart Home Solutions
Shipshape announces the launch of its new Private Label App Platform which enables home service providers with the ability to offer custom-branded smart home maintenance solutions.
Shipshape Solutions Inc., a leading innovator in smart home management technology, today announced the launch of its new Private Label App Platform enabling partners to offer custom-branded smart home bundles to homeowners.
Home service providers, including contractors, appliance manufacturers, insurance companies and utilities stand to benefit greatly from connected homes, but the technology is too complicated for most of these companies to build it on their own. With this new offering service providers get a win-win outcome with the ability to offer a next generation proprietary solution that enhances the customer experience under their own brand without having to build the technology themselves.
With this new offering from Shipshape, service providers get a win-win outcome with the ability to offer a next generation proprietary solution that enhances the customer experience under their own brand without having to build the technology themselves.
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ELECTION DAY
US election outcome has potential direct & indirect implications for European, US insurers: Deutsche Bank - Reinsurance News
Analysts at Deutsche Bank expect fairly limited direct impacts to European insurers from tomorrow’s US election but sees some potential implications for carriers in the US, including a possible post-election M&A rebound.
The polls suggest it’s going to be a tight race between Vice President Harris and former President Trump, with analysts warning that the final determination could be prolonged due to recounts and the potential for disputed results in certain states.
With polls set to close on November 5th, 2024, Deutsche Bank has commented on where it sees potential implications for insurers in Europe and the US.
“European insurers on the whole have limited exposure in the US – though there are some exceptions (e.g. Aegon, Zurich, reinsurers). Overall, we believe the direct impacts from the elections this week will be fairly limited, whilst indirect impacts (such as from financial markets) could have more of an effect,” says Deutsche Bank.
For European insurers, analysts highlight corporate taxes, tariffs, social inflation, and financial markets as potential impact areas.