News
Commissioner Lara takes major step to increase insurance availability in wildfire-distressed areas
Insurance Commissioner Ricardo Lara announced today that the California Department of Insurance has submitted the final wildfire catastrophe modeling regulation to the Office of Administrative Law (OAL) for approval. This “first-of-its-kind in California’s history” regulation strengthens Prop. 103 by establishing unprecedented coverage commitments from insurance companies, aimed at stabilizing the insurance market and expanding options for homeowners and business owners in high wildfire-risk areas. The submission follows several months of extensive public input, expert consultations, and multiple public hearings and workshops held by the Department.
“Consumers want solutions to our state’s insurance crisis. My new regulation will make insurance more available across the state,” said Commissioner Lara. “As California experiences more intense climate impacts, technology will tell us where the risks truly are and accurately price rates that reflect mitigation and hardening investments.”
Under Prop. 103, insurance companies are allowed to raise rates on homeowners, businesses, and consumers, but are not legally required to offer coverage in wildfire-prone areas.
This new wildfire catastrophe modeling regulation, as part of Commissioner Lara’s comprehensive Sustainable Insurance Strategy, introduces a requirement for insurers to increase their policy offerings in underserved areas as a condition of incorporating catastrophe modeling into ratemaking.
InsurTech/M&A/Finance💰/Collaboration
Guidewire Deepens Relationship with Shift Technology, Naming Shift its Strategic Partner to Help Mitigate Insurance Fraud
Guidewire (NYSE: GWRE) announced Shift Technology as its strategic partner for insurance-based decisioning solutions.
Shift’s products enable artificial intelligence (AI) powered fraud detection and investigation, underwriting risk detection, and subrogation detection. The expanded partnership will deliver a joint solution that will enable the rapid integration of Shift’s fraud detection technology with Guidewire’s solutions, improving efficiency and claims handler productivity.
“Shift offers a robust suite of fraud-detection solutions across key insurance functions and important data science and AI expertise”
A PartnerConnect Technology Premier partner and leader in AI-driven decisioning for the insurance industry, Shift delivers solutions to insurers that help automate and optimize critical insurance decisions. Shift has been a pioneer of AI-powered fraud detection since its establishment in 2014 and was an early adopter of large language models and generative AI in 2020, making it a leading-edge fraud detection solution provider for insurers.
Research
Wall Street Journal article explores rising cost of repairs due to ADAS
The cost of vehicle maintenance and repairs has increased by 28% over the past three years, according to a Wall Street Journal (WSJ) article.
“Getting into a fender bender can be a mind bender these days,” the article says. “That little dent, bump or scrape seems pretty minor until you’re hit with the real damage: the bill.”
Higher costs are due to inflation and more complex repairs needed for vehicles with sensors, the article says.
Mitchell told the newspaper that an average repair cost for an insurance claim was $4,721 in the second quarter of 2024. The cost is about $800 more than three years ago.
“In 2024, some 26% of repairs associated with insurance claims have included recalibrating sensors, up from 5% in 2020, per Mitchell,” the article says. “Recalibrations add an average cost of $500.”
Financial Results
Swiss Re delivers solid 9M'24 net income as P&C underwriting result more than offsets reserve strengthening - Reinsurance News
Global reinsurer Swiss Re generated a net income of $2.2 billion and $102 million for the first nine months and third quarter of 2024, respectively, despite the previously announced addition of $2.4 billion to its prior year US liability reserves.
Swiss Re announced earlier this month that it strengthened its property and casualty reinsurance (P&C Re) reserves by an additional $2.4 billion in the third quarter of 2024, taking total reserve additions for 9M 2024 to $3.1 billion, partially offset by releases in other lines, resulting in net prior year reserve strengthening of $2 billion in the quarter.
The reinsurer states that this strengthening has “accelerated the achievement of the Group’s goal to position overall P&C reserves at the higher end of the best-estimate range,” while the establishment of an uncertainty allowance on new business is designed to support the strength of the firm’s reserves in the future.
Crawford reports Q3 2024 results
Crawford is the largest publicly traded claims management provider.
Crawford & Company held its earnings call on Nov 5, 2024. Key highlights:
- Crawford, the largest publicly traded claims management provider, handles over $20 billion in claims annually across 70 countries. In Q3 2024, Broadspire and US GTS achieved new quarterly revenue records, with International Operations showing strong revenue growth and margin expansion in key markets.
- Third-quarter earnings declined, impacted by reduced weather-related revenue in North America Loss Adjusting and Platform Solutions. North America Loss Adjusting reported $79.3 million in revenue, consistent with the previous year, though operating earnings fell by 48% due to tough year-over-year comparisons and higher expenses in US GTS.
- Broadspire revenue reached $99 million, up 7% from Q3 2023, reinforcing its role as a core non-weather-dependent business. Platform Solutions revenue declined by 24% to $45.3 million, while subrogation revenues grew 12%.
- Lower storm activity, including a 50% drop in storm frequency from 2023, led to a 39% decline in weather-related revenue, reducing demand for catastrophe services. “While Hurricanes Helene and Milton were headline economic loss events, the overall storm frequency in the third quarter of 2024 decreased by almost 50% compared to 2023.” – CEO Rohit Verma.
- Higher incentive compensation for 2023 earnings and increased unbilled revenues pressured 2024 cash flow, but this is expected to reverse by year-end, though overall cash flow will remain lower than the strong 2023 levels. “I mean last year, ’23 was a tremendous operating cash flow year. So we’ll be down compared to that, largely because our earnings are down, and we had higher cash outflows related to incentive compensation earned in ’23.” – CFO Bruce Swain.
OEMs & Auto Insurance
OEM Summit panel: Telematics data focus on driving behavior, collision avoidance and consumer safety | Repairer Driven News
Evolving innovations and policymaking regarding in-vehicle and app-connected data sources were discussed during one of three Society of Collision Repair Specialists (SCRS) OEM Collision Repair Technology Summit sessions and focused on how telematics can ultimately benefit collision avoidance and consumer safety.
A panel of executives from the Alliance for Automotive Innovation (Auto Innovators), Cambridge Mobile Telematics (CMT), and GM Enterprise Innovation discussed the topics from their varying vantage points — data use cases, auto insurance, vehicle innovations, and proposed safety and privacy policies — last week at the SEMA Show in Las Vegas.
“Customer service experience for the consumer has led people to much lower customer satisfaction overall,” said Ryan McMahon, CMT strategy and corporate development senior vice president. “For the insurance industry, they are dealing with customer defections not just because of price, and price is a major issue… If you look at the inflation index, auto insurance is No. 1.
“The main issue that comes down to the insurance process that’s happened in the last few years has been trying to get more speed into the entirety of the repair process… What happened was the insurance industry realized the technology that we were developing and that we work on, measures driving behavior.”
Commentary/Opinion
Insurance Commissioner Finalizes Plan Allowing Secret Algorithms to Raise Home Insurance Rates; Lies About Making Insurers Sell More Coverage in Return, Says Consumer Watchdog
Insurance Commissioner Ricardo Lara is not being honest with Californians about making insurance companies sell more in wildfire areas in return for using secret algorithms to hike rates, Consumer Watchdog said in a Consumer Alert video about Lara's regulation released today. The final regulation was submitted to the state Office of Administrative Law this afternoon.
The Consumer Alert video shows how the Commissioner lied when he promised insurance companies would have to cover 85% of homeowners in wildfire areas in exchange for that right to raise rates. No such requirement exists in the text of the regulation.
"Lara said 85% of people will be covered, but his regulation said instead companies can choose to cover only 5% more people than they cover today. … And companies don't even have to meet that threshold, they can opt for an alternative arrangement if they want," says Consumer Watchdog President Jamie Court in the video.
Watch the Consumer Alert video
"This is a critical issue because all homeowners are going to pay a lot more for their insurance under Lara's regulations. Companies can use secret algorithms to correspond to black box climate models to raise insurance rates. Even the insurance commissioner doesn't know how much rates will go up because no one can see in the black box. However, Lara's promises of increased coverage are not in the print of the regulation."
Rethinking Annual Performance Assessments | The Jacobson Group
As we near the end of 2024, annual performance assessments are on the minds of many companies. Traditionally, this is a time to reflect on the year and evaluate whether individuals achieved the goals they set back in January. However, if it’s November and you’re just now thinking about performance management, you’ve fallen behind.
Companies that prioritize performance are 4.2 times more likely to outperform their peers. Having just one or two formal conversations to determine whether an individual met your expectations throughout the past 12 months sets both you and the employee up for failure.
In today’s workplace, building connections and committing to open communication are more important than ever. These factors also play a large role in effectively managing your employees’ performance and progress, as well as their levels of engagement and job satisfaction. If you’re having ongoing performance discussions with your team members all year, it makes the year-end review much less daunting – if necessary at all!
Here are a few ways to incorporate performance management into discussions throughout the year, while helping individuals feel more confident and empowered in their roles.
Payments
Innovation Powers Disaster Recovery as Insurers Move to Digital
Innovation is born in times of struggle. And in the aftermath of Hurricanes Helene and Milton, with insurers across the southeastern United States seeing a massive surge in claims as homeowners face the challenge of repairing and rebuilding their lives, digital innovations are helping shape faster recovery solutions.
For homeowners whose properties were hit by the hurricanes, the immediate need is for cash flow to start repairs. Yet, historically, post-disaster claimants faced long waits, spending hours navigating automated call systems and enduring delays to secure payouts.
“The old way this used to work was that you’d get into a call tree, probably wait on hold for hours, and explain your problem — often with significant documentation needs,” Ian Drysdale, CEO at One Inc, told PYMNTS’ Karen Webster.
Awards
High Definition Vehicle Insurance Named Standout MGA of the Year at Excellence in Insurance, Sponsored by Insurity
Insurity recognized High Definition Vehicle Insurance as Standout MGA of the Year for showcasing exceptional growth, innovation, and market impact over the past year.
Insurity, a leading provider of cloud-based software for insurance carriers, brokers, and MGAs, today announced that High Definition Vehicle Insurance (HDVI), a technology-first commercial auto insurance provider, was named Standout MGA of the Year at this year's Excellence in Insurance awards ceremony. The event, held in Amelia Island, FL, celebrates the exceptional achievements of P&C organizations across categories such as claims, automation, data and analytics, digital experience, and other key areas of industry innovation and service.
Founded in 2018, HDVI has rapidly expanded its footprint to serve 24 states, amassing over 5 billion miles of telematics data. This dataset, combined with HDVI’s comprehensive suite of proprietary tools, empowers fleets and agents to better understand and manage risk, ensuring tailored service and significant cost savings for customers. The company’s flagship product, HDVI Shift, has proven to save fleets up to 20% on premiums each month during the policy period, equating to substantial annual savings for mid-sized fleets.
“Insurity’s continued innovation in the insurance space benefits MGAs like us who are pushing the industry forward,” said Merredith Lewis, chief product officer at HDVI. “With resources for our customers like a dedicated fleet services team, coaching tools in the HDVI Fleet portal, and a driver app that helps foster safety, HDVI continues to champion a culture of continuous improvement and risk management in the trucking industry.”
People
NCCI Names Tracy Ryan President and CEO
Ryan, currently President & CEO of Allianz Commercial, North America & Latin America, will succeed Bill Donnell, who is retiring in February 2025.
The board of NCCI Holdings (Boca Raton, Fla.), the most comprehensive source for workers compensation data, insights, and solutions in the United States, has elected Tracy Ryan as the company’s new President and CEO, effective January 6, 2025. Ryan will succeed Bill Donnell, the company’s current President and CEO, who is retiring in February 2025. The overlap will provide a smooth transition for the industry and stakeholders, according to a statement from NCCI.
Ryan is currently President & CEO of Allianz Commercial, North America & Latin America. She also served in various leadership positions during her 27 years with Liberty Mutual Insurance, including most recently as President of Global Risk Solutions, North America.
Ms. Ryan received a BS degree in mathematics from Fairfield University and a Master of Arts in mathematics from the University of Colorado Boulder. She is a member of the Casualty Actuarial Society, and former board member for WCRI and for NCCI, where she served as Board Chair from 2016–2018.
Canada
Intact Financial acquires Jiffy, Canada's No. 1 home maintenance app
Intact and Jiffy to expand access to home maintenance services across Canada
Intact Financial Corporation (TSX: IFC) is pleased to announce that it has acquired Jiffy Inc. (Jiffy), Canada's No. 1 home maintenance app.
Through this acquisition, Jiffy will have the platform and capabilities to accelerate expansion of its services across more Canadian jurisdictions while supporting Intact's goals of engaging three out of four Canadian customers digitally and providing a second-to-none customer experience.
Recommended Events
2025 INSURE! INFLUENCE! IMPACT! Awards!
CoVerse Communications will be hosting the second-annual Insure! Influence! Impact! Awards in late January/early February 2025.
Date will be selected when nominees, judges, and sponsors are surveyed for best option. This will be a virtual gala. Our emcees are Bobbie Shrivastav, author of the newly released hit book “Momentum: Makers & Builders", and Laurel Jordan of Sutherland. Bobbie and Laurel are cohosts of the popular Insurance Sync podcast.
Typically, industry executives collect accolades and awards from the trade press and associations, but there is currently no dedicated honor for insurance communicators, creators, and influencers who influence the top-performing professionals in our industry. CoVerse—the Communications Co-Pilot for Insurance Business and Personal Branding, Messaging, and Content—will host the first such ceremony to honor influencers across categories such as:
The Influencer Impact Award: Bestowed upon the individual or team whose content and messaging “influences the influencers” while making a lasting impact on how the insurance industry messages.
Dynamic Duo/Best Team-Up: Several recipients will be acknowledged for their campaigns, initiatives, or partnerships that bring an “outside the box” approach to insurance communications.
Silo Smasher(s): Honoring those individuals that swim lanes can’t contain, people who connect and network and elevate insurance through their messaging and creativity.
Honorable Mentions: Every nominee will receive a mention at the virtual ceremony.