Embedded Insurance
Embedded Insurance: Major Disruptor Can Bridge Huge Coverage Gap
[Ed. Note: with high hopes for embedded insurance growth, we examine the potential to close the ever-widening protection gap as carriers pull back coverage and policyholders raise deductibles and self-insure to blunt premium increases]
Embedded insurance promises to disrupt insurance distribution as well as product. Moreover, it will help close the “protection gap” which is roughly 50% of all economic losses not covered by insurance
Embedded Insurance: What is It?
Accenture defines embedded insurance as any insurance that can be purchased within the commercial transaction of another product or service. That covers an enormous playing field.
Embedded insurance isn’t a new innovation. Purchasing life insurance at the airport before flight departure was “version 1.0” of embedded—a model that turned into an incredibly profitable business. Another evolving embedded model is auto insurance added at point-of-sale together with a new car purchase or lease. Again, not a new concept but a continuous area of interest with more recent insurer/car brand alliances. Such household purchases are one of those major life change moments with an opportunity to switch insurers, hence the constant attention.
Embedded Insurance Market: Big and Getting Bigger
The embedded insurance market size in terms of gross written premiums value is expected to grow from USD 156.06 billion in 2024 to USD 703.44 billion by 2029, at a CAGR of 35.14% during the forecast period (2024-2029).READ ON
Climate/Change/Sustainability/ESG
Third-quarter global insured catastrophe losses exceed $100 billion
Twenty-six different billion-dollar loss events hit the United States so far in 2024, Aon reports.
Natural catastrophes in the U.S. totaled roughly $80 billion during the third quarter of 2024. Global insured catastrophe losses reached $102 billion during the third quarter of 2024, according to a recent Aon report.
Economic losses for the quarter topped out at $258 billion, the data showed, after posting $351 billion in losses over the same period in 2023.
Meanwhile, natural catastrophes in the U.S. totaled roughly $80 billion and accounted for nearly 80% of global insured losses during the quarter. Economic losses in the U.S. reached at least $120 billion over the period and were above the $92 billion average since 2000.
The five costliest economic loss events through the first three quarters of 2024, according to Aon:
Hurricane Helene impacted parts of the U.S., Mexico and Cuba and accounted for a preliminary figure of $55 billion in economic loss.
The Noto Earthquake in Japan accounted for $17.9 billion in economic loss.
Flooding in South and Central China accounted for $15.6 billion in economic loss.
Typhoon Yagi in Southeast Asia accounted for $12.6 billion in economic loss.
Severe convective storms in the U.S. accounted for $7 billion in economic loss.
US property market update: Calm after the storms? | GallagherRe
In the wake of late storms during the 2024 North Atlantic hurricane season, we take a look at the impact on US property (re)insurers’ finances and look forward to the forthcoming 1.1 renewal.
When significant, catastrophic storms like hurricanes Helene and Milton first hit, the first priority is always the impact on lives and livelihoods. But as the direct effects recede and communities begin to rebuild, it is worth reflecting on the impact to the insurance markets – as that, too, reflects our collective resilience to such events.
The good news is that despite their potential severity, these storms are unlikely to threaten any (re)insurers’ solvency. Of course there will be some notable losses; Milton in particular could trigger material reimbursements under the Florida Hurricane Catastrophe Fund, a state-run reinsurance facility. There are also likely to be pockets of significant losses arising from Helene, such as among regional carriers in Georgia, North Carolina and South Carolina.
Still, reinsurers’ 2025 business plans largely remain intact, and continue to show signs of increased appetite for natural catastrophe exposures, especially where they have existing relationships with trusted cedants.
Top 10: Largest Insurance Payouts
InsurTech Digital explores 10 of the costliest insurance payouts of all time, delving into the context behind them and the shockwaves that followed
The insurance sector has borne some of the most significant financial impacts in history, particularly in the wake of natural disasters and unprecedented, catastrophic events. From hurricanes and earthquakes to unprecedented storms, these incidents have resulted in staggering insurance payouts that not only reflect the devastation caused but also highlight the evolving landscape of risk management and coverage.
As climate change continues to influence weather patterns and increase the frequency of extreme events, understanding these monumental insurance payments offers valuable insights into the industry's challenges and opportunities. In this article, we explore 10 of the largest insurance payments ever recorded, shedding light on the brokers most affected and the lessons learned from each event.
P.S. We are only including traditional insurance payouts in this list, rather than bailouts subsidised by national governments. Whilst not a traditional insurance claim, the U.S. government's bailout of AIG during the 2008 financial crisis - totalling an eyewatering US$81bn - was effectively an enormous insurance payment. For the purposes of this article, however, we are only including claims and payouts made through insurance companies. On with the list!
Financial Results
Progressive posts strong Q3 growth, adds 1.6 million policies with record ad spend
High underwriting margin and strategic rate adjustments drive policy gains
Progressive Corp reported strong growth in its third-quarter results, driven by an increased underwriting margin and a record advertising spend, which contributed to the addition of nearly 1.6 million policies in force.
According to president and CEO Tricia Griffith, this growth set a new record for the company, bringing the total number of policies added across lines this year to approximately 4.2 million, with about 80% of the increase in personal auto insurance.
The company posted a 10.9% underwriting margin for the first nine months, more than double the 5.1% from the same period last year, significantly surpassing its target of 4%.
Pat Callahan, personal lines president, noted that the growth rate exceeded expectations. As the year began, Progressive eased some underwriting measures aimed at profitability, lowering rates “a small amount in a number of states” and introducing more competitive billing options.
Callahan indicated that expansion will continue at a rate aligned with staffing and service capacity.
Progressive ranked as the second-largest private passenger auto insurer in the US last year, with a 15.20% market share based on direct premiums written, according to AM Best. Callahan noted that as competitors raised rates and restricted new business, Progressive’s media spend became “efficient,” especially in markets with competitive rates.
Third-quarter net income doubled year-over-year to $2.33 billion from $1.21 billion, while net premiums written increased to $19.46 billion from $15.6 billion. The combined ratio improved to 89 from 92.4.
AIG reports strong Q3 despite challenging market conditions
AIG achieved strong Q3 growth in underwriting profitability and delivered consistent capital returns to shareholders, despite challenging market conditions. The company said it continued to deliver exceptional underwriting results, maintained rigorous expense discipline, executed on its capital management plan, and made excellent progress on its strategic priorities.
AIG reported General Insurance net premiums written of $6.4 billion, a slight decrease of 1% on a reported basis, yet reflecting a 6% increase on a comparable basis. This growth was driven by the Global Commercial Lines segment, which saw a reported decrease of 2% but a 7% growth on a comparable basis, with North America Commercial Lines leading the charge with an 11% increase. AIG’s new business efforts also paid off, with $1.1 billion in new business, marking a 9% year-over-year rise in Global Commercial Lines.
Other performance highlights
General Insurance net premiums written grew 6% on a comparable basis, with a significant 11% growth in North America Commercial Lines.
A favorable accident year combined ratio (AYCR) of 88.3% underscores disciplined underwriting and risk management.
AIG returned $1.8 billion to shareholders in Q3, reinforcing its commitment to shareholder value.
The adjusted after-tax income per diluted share increased by 18% year-over-year, reflecting underlying operational strength and efficient capital management.
NEWS FROM SEMA/MSO 2024
2024 SEMA Show Day 2 Features Philanthropy, Recognition of Collision Repair Leaders - Autobody News
The 2024 SEMA Show welcomed back attendees for Day 2 on Nov. 6 at the Las Vegas Convention Center.
The second day of the 2024 SEMA Show, being held Nov. 5-8 at the Las Vegas Convention Center, gave show attendees another chance to learn about new tools, products and techniques to improve all aspects of their businesses.
Red Carpet Awards
The opening day of the SEMA Show, Nov. 5, concluded with the Collision Industry Red Carpet Awards, emceed by Stacey Phillips Ronak.
Nine organizations gave out a total of 20 awards. In addition to hosting the show, Phillips Ronak will also write up a full recap of the event for Autobody News.
InsurTech/M&A/Finance💰/Collaboration
Global insurtech funding in 2024 on track to reach $4.2 billion
CEO notes positive rebound, particularly in Series B funding
Insurance technology funding from venture capitalists is projected to close at $4.2 billion by the end of the year, according to “The State of Global Insurtech” report by Dealroom.co, Mundi Ventures, and MAPFRE.
In the first nine months, global insurtech investment already amounted to $3.2 billion, with the fourth quarter expected to see mostly Series B and C funding rounds for breakout-stage startups. These firms are said to be approaching pre-pandemic funding peaks.
“After the uncertainty of previous years, the global insurtech market is now showing signs of further stabilization,” said Javier Santiso, chief executive and general manager of Mundi Ventures. “While the frenzy has cooled, we are seeing a positive rebound in early-growth/breakout stages, particularly with Series B funding picking up.”
However, late-stage startups are facing significant funding challenges, with large-scale investments into Series D and later rounds seeing steep declines. The setbacks highlight investor caution around high-valuation, mature companies struggling to maintain momentum.
Next Insurance secures $265m in funding to enhance small business insurance offerings
Next Insurance, a US-based InsurTech firm, has partnered with insurance giants Allstate and Allianz in a move which includes a $265m strategic investment.
The investment will enable Next to enhance its product offerings and expand its reach to small business clients, according to the Coverager.
Under this new partnership, Next’s digital insurance products will become accessible to Allstate customers, and the companies will jointly develop commercial auto products tailored for the small business market.
Additionally, the deal reinforces Next’s reinsurance relationship with Allianz through a multi-year commitment with Allianz Re.
Founded with a mission to support small and micro-businesses in the United States, Next provides digital insurance solutions designed to simplify coverage for entrepreneurs.
Its platform offers a comprehensive range of products including general liability, professional liability, and commercial auto insurance, all aimed at providing cost-effective and accessible options for small business owners.
The new funding will be directed towards expanding Next’s portfolio of insurance products, scaling its platform capabilities, and enhancing its collaboration with Allstate to reach millions of underserved small businesses across the United States.
By combining Allstate’s established distribution network and brand recognition with Next’s digital expertise, the companies aim to deliver “affordable, simple, and connected protection” to a broad audience of small business owners.
How integration accelerators are transforming insurance workflows
In the insurance sector, streamlined integration of systems is critical for optimising workflows, advancing risk management, and fostering seamless collaboration across departments. Despite the wide availability of various systems, insurers often face significant challenges in ensuring these technologies work together effectively. Risk Control Technologies explains why an integration accelerator can play a key role by making it easier and faster to connect essential functions like Loss Control, Underwriting, and IT, bringing measurable benefits to each.
For Loss Control teams, the integration accelerator offers a centralised approach to managing risk data, empowering these teams to make more informed decisions.
A primary benefit is the ability to better predict and prevent claims by consolidating real-time data from various sources, including policy administration and underwriting systems.
Access to this data enables teams to address risks proactively, improving the loss ratio by intervening early.
The accelerator also supports Loss Control’s relationship with clients by increasing engagement. By automating the collection of risk data and sharing insights with insured clients, Loss Control can establish more meaningful interactions.
This increased frequency of engagement boosts customer satisfaction and retention. In addition, integration accelerators can significantly streamline operations by automating manual data entry tasks.
Mitchell and Protech Join Forces to Streamline Calibration Detection
Collaboration focused on helping repairers easily identify OEM-recommended calibrations for collision-damaged vehicles equipped with Advanced Driver-Assistance Systems (ADAS)
Mitchell, an Enlyte company and leading technology and information provider for the P&C claims and repair industries, and Protech Automotive Solutions, the largest national provider of ADAS diagnostic scanning and calibration services, today announced that they have signed an agreement to integrate Protech's ADAS ID3 solution with Mitchell's Diagnostics as a Service (DaaS) platform and Predictive ADAS functionality. This will allow repairers to access a comprehensive, AI-generated report of manufacturer-recommended calibrations in Mitchell Connect based on information specific to each automobile, estimate, diagnostic trouble code and OEM guideline.
Today, there is at least one ADAS feature on nearly every new vehicle. This has made it increasingly critical for collision repairers to identify the ADAS components on automobiles and ensure that necessary repair procedures and calibrations are not overlooked.
"With advanced safety systems becoming standard on new vehicles, it's more important than ever that estimators and technicians have easy access to ADAS calibration information in order to safely return collision-damaged automobiles to the road," said Jack Rozint, senior vice president of repair sales at Mitchell. "Our DaaS platform, patented diagnostics workflow and integrations with best-in-class technologies like Protech's ADAS ID3 help make that possible while, at the same time, streamlining the repair planning process."
Vertafore Acquires Surefyre to Expand Offerings for MGA Growth
Insurance software-as-a-service provider Vertafore said it has acquired Surefyre, a submission and underwriting platform for managing general agencies and wholesalers.
The deal’s financial terms were not disclosed.
Denver-based insurtech Vertafore said Surefyre’s artificial intelligence-enabled solution will be added to Vertafore’s ecosystem of MGA solutions to accelerate speed to market, reduce costs, and boost revenue.
San Francisco-based Surefyre’s cloud-based technology platform includes:
- A modern, fully configurable agent-facing portal that supports the complete policy lifecycle and enhances collaboration between agents and underwriters.
- An underwriter workbench that enables MGAs to rate and quote specialty P/C business seamlessly across systems, driving efficiency and prioritizing the most profitable opportunities.
- AI-powered solutions, including automated agent portal configuration to accelerate speed to market and additional AI-driven features to streamline the submission and risk selection process.