News
CCC Releases 2023 Crash Course Report, Providing Market Data and Insights on the Trends Impacting the P&C Insurance Economy
Report identifies macro trends, business drivers, and technologies reshaping consumer driving, vehicle ownership, automotive claims, and collision repair
CCC Intelligent Solutions Inc. (CCC), a leading cloud platform powering the P&C insurance economy, announces today the availability of its annual Crash Course report, which identifies trends impacting the P&C insurance economy, a multifaceted industry advancing the future of personal mobility and safer roadways. The report delivers insights on the convergence of economic, social, and technological shifts that are reshaping driving behaviors, vehicle ownership, automotive insurance and claims handling, collision repair and more.
Crash Course 2023 is the 28th edition of CCC’s industry-leading report, which draws insights from the more than $100 billion in transactions processed annually through CCC’s solutions by its 30,000 customers, which include automakers, insurers, collision repairers, lenders, parts suppliers, and more. The report draws from the company’s decades of experience and information derived from more than 280 million claims-related transactions, 50 billion driving miles of driving data, and millions of bodily injury and personal injury protection (PIP) /medical payments (MedPay) casualty claims.
“Macroeconomic trends like inflation, supply chain constraints, and labor shortages are putting pressure on an industry that is simultaneously managing through major advancements in vehicle technology, including the growing popularity of advanced driver safety systems (ADAS) and EVs,” said Jason Verlen, CCC’s vice president, product marketing.
Together these factors are shifting insurability and repairability models and related cost and service dynamics. To advance, participants across the ecosystem are unifying around the consumer and leveraging technology with the shared aim of getting drivers back on the road safely, efficiently, and affordably.”
J.D. Power: Claim digitization ‘not meeting customer needs’
Recently released survey data from J.D. Power found that severe catastrophic losses, supply chain-related delays, and inflation made 2022 the worst year financially for homeowners insurance carriers in the past decade and was the first year that digital means of claims processing decreased due to customer dissatisfaction. Meanwhile, for the first four months, auto insurance customer claims satisfaction stayed about the same as in 2021.
According to the 2023 U.S. Property Claims Satisfaction Study, more severe events, rising costs, and longer cycle times strained customer satisfaction and tested the limits of the digital tools that were designed to help homeowners insurance carriers respond quickly and efficiently.
A June 2022 report, focused on auto insurance, found that record-high serious collisions, skyrocketing used vehicle prices, and surging repair costs created an unenviable scenario for auto insurers: raise rates or go out of business. In turn, customer satisfaction with available pricing declined sharply while carriers put efforts forth to improve customer engagement, mostly through digitization and artificial intelligence (AI). J.D. Power says the effort by carriers to do so kept customer satisfaction afloat and similar to the previous year.
Crash Test Dummies Need to Do Better: GAO
A recent report from the Government Accountability Office recommended the National Highway Traffic Safety Administration rethink crash test dummies in order to collect better data on more types of people.
The investigative arm of Congress that examines the use of public funds said the consequences of vehicle crashes on women, the elderly, heavier people, and children are not represented by current crash test dummies used in front- and side-impact crash tests, which “may limit the extent to which the information the dummies provide helps mitigate greater risks faced by certain demographic groups.”
Loss-making US personal lines clobber P&C industry earnings
Rating agency AM Best says US personal lines insurers’ earnings worsened with an estimated underwriting loss of $US34.9 billion ($53 billion) last year after losing $US12.3 billion ($18.7 billion) in 2021.
The weaker results pushed the US property and casualty (P&C) industry’s overall underwriting loss to a five-year high, with a combined ratio estimated at 104% last year. In 2021 the P&C industry posted a combined ratio of 100%, 98.8% in 2020 and 104% in 2017.
“For years, personal lines results carried the P&C segment’s overall underwriting results,” the rating agency says.
“The sheer size of the personal lines segment, which accounts for about half of annual premium volume, along with the capital strength and reach of the leading writers, dominated overall results.”
AM Best says the deterioration in the personal auto line was primarily responsible for the US personal lines’ larger underwriting loss last year. US personal lines’ combined ratio worsened to 108.2% from 102.7% in 2021.
In September last year the rating agency changed the market segment outlook for personal lines to negative, owing primarily to the “significant deterioration in reported results for the personal auto lines of business”.
Hurricane Ian: A storm of challenges
On September 28, 2022, Hurricane Ian made landfall on the west coast of Florida near Fort Myers Beach as a Category 4 storm. Ian was estimated to be almost 500 miles wide, with an eye 40 miles across and sustained winds of 150 mph at landfall. In Florida alone, over 708,255 first-party property claims have been reported with reserves reaching almost $14 billion. In addition to delivering strong winds, this storm also slammed Florida with a catastrophic storm surge
While hurricane losses are often complex, this event was especially complex for three reasons:
The event happened in Florida prior to the new statutory reform property insurance changes. Hurricane Ian was a wind and flood/surge event, and fewer than one in five homes in the affected areas had flood insurance.
The general public lack knowledge of the National Flood Insurance Program (NFIP) and Building Code, FEMA 50% Rule application.
How Coconuts Protect the Jersey Shore, Other Eroding Coasts
Coastal communities around the world are adding a tropical twist to shoreline protection, courtesy of the humble coconut.
From the sands of the Jersey Shore to the islands of Indonesia, strands of coconut husk, known as coir, are being incorporated into shoreline protection projects.
Often used in conjunction with other measures, the coconut material is seen as a cost-effective, readily available and sustainable option. This is particularly true in developing countries. But the material is also popular in wealthy nations, where it’s seen as an important part of so-called “living shorelines” that use natural elements rather than hard barriers of wood, steel or concrete.
One such project is being installed along a section of eroded river bank in Neptune, New Jersey, about a mile from the ocean on the Shark River. Using a mix of a federal grant and local funds, the American Littoral Society, a coastal conservation group, is carrying out the $1.3 million project that has already added significantly to what was previously a severely eroded shoreline in an area that was pummeled by Superstorm Sandy in 2012.
“We’re always trying to reduce wave energy while shielding the shoreline, and whenever we can, we like to employ nature-based solutions,” said Tim Dillingham, the group’s executive director. “This material is readily available, particularly in developing countries and it’s relatively inexpensive compared with harder materials.
Commentary/Opinion
InsurTech: Not Dead but Different
Some InsurTechs will struggle, and there will even be some fatalities, but the majority of InsurTechs are making the necessary adjustments and operating successfully
The title of this article brings to mind two famous quotes from American culture. Mark Twain is reputed to have said, “the reports of my death are greatly exaggerated.” The saying could also apply to the frequent statements made by InsurTech detractors who have recently pronounced its death, following an incredible 8 year-run, give or take a year. To appropriate another famous dictum, Dorothy, in The Wizard of Oz, said “Toto, I’ve a feeling we’re not in Kansas anymore.” The phrase has come to mean that we have stepped outside normality; we have entered a place or circumstance that is unfamiliar and uncomfortable—as we most certainly have over the past three years.
It is generally recognized by insurers and investors that InsurTechs, and the broader tech-enabled startup community, is and has been a highly valued contributor to innovation, employment and the economy overall. Today’s federal government intervention in the Silicon Valley Bank, who plan to make the SVB depositors whole, including startups, VCs and investors, is strong and encouraging evidence of that recognition. Despite this unnerving development, numerous InsurTechs have assured investors, employees and customers that the demise of SVB will have no direct impact.
by Stephen Applebaum and Alan Demers
Complete editorial available at link to Insurance Innovation Reporter
Did VCs and twitter trolls help take down Silicon Valley Bank?
The speed of Silicon Valley Bank's demise last week was shocking, and some people blame venture capitalists, who told tech companies in their portfolios to take all their money out, fast.
"I'd like to formally thank my peers in the venture community whose stellar leadership over the past 48 hours triggered a run on deposits at Silicon Valley Bank, ultimately toppling one of the most important institutions in our ecosystem," Brad Svrluga, co-founder and general partner at Primary Venture Partners, tweeted on Friday.
He acknowledged that the bank made some big mistakes, including major missteps in communications as its balance sheet crisis grew, in his tweets.
"However, the ultimate failure was from the hysterical urging on social media of VCs who undermined our shared ecosystem," he said. "It has been a stunning failure of leadership. And I won't even get started on the fact that some of these VCs had neobank portfolio companies that stood to benefit directly from SVB's failure."
InsurTech/M&A/Finance/Collaboration
How Insurtech Covie, Silicon Valley Bank customer, is handling collapse
In the middle of the afternoon on Thursday, March 9, Trent Harvey, CEO and co-founder of the Austin-based insurtech Covie, noticed a Reuters article being passed around in some of his online groups. The article was about the pending collapse of Silicon Valley Bank, which held the majority of Covie's cash.
"Initially, you look at that, and you're like, 'Surely this isn't going to happen,'" Harvey says. "It happened so fast – it was mind-blowing."
Harvey and a team of seven operate Covie, which provides an API platform to help link data from insurance and "insurance-adjacent" companies to each other. Its customers range from independent agencies, who use the connections to improve their data pre-fill capabilities, to property managers who need to verify renter's insurance coverage. The company launched in 2020 and has raised seed money from funders including Y Combinator, and is planning to move into Series A soon.
Top 10 insurtech incubators and accelerator programmes
These are the biggest insurtech-related incubator and accelerator schemes, which all have proven track records of nurturing promising insurtech startups.
Incubator and accelerator programmes offer a useful way for founders to network, learn new skills, evaluate their business idea, and grow into fully formed companies. They often connect participants with investors and culminate in a fledgling business being funded for the first time. Today, Y Combinator is often seen as the holy grail of accelerators across the entire finance industry – but we wanted to drill down and look at some of the other opportunities that are out there for budding entrepreneurs.
So here are the top 10 incubators and accelerators open to insurtech founders today.
New way for rental property owners, insurance companies to provide post-disaster temporary housing
Ohio-based company, InnTown Stays®, is working to find temporary housing for insured homeowners and their families displaced by disasters such as fires, flooding, and other natural disasters.
"Our philosophy is a win-win for all parties concerned," say owners Thom Leiter and Jorge Sanclemente. "It not only helps the victims themselves — it benefits insurance agencies and adjusters, and rental property owners with apartments, houses and VRBO and Airbnb operators, too."
"It's everyone working together and it just makes sense, responsibly as well as financially," they added.
The idea grew from a family's disaster in 2019. The company owners heard about a house fire that required an Ohio family to move from their home into an extended stay hotel. The hotel was 30 minutes away from their home increasing the difficulty for them in an already stressful situation.
People
Former Liberty Mutual exec Tracy Ryan joins Allianz
Tracy Ryan, who last year left her position as president of global risk solutions, North America, at Liberty Mutual Insurance Co., has joined Allianz Global Corporate & Specialty as chief regions and markets officer, the insurer announced Tuesday.
She succeeds William Scaldaferri, who is leaving Allianz SE after 23 years, an AGCS statement said. A spokeswoman for AGCS said “he’s exploring new options.”
New York-based Ms. Ryan will also take on Mr. Scaldaferri’s role as president and CEO of Allianz Global Risks U.S. Insurance Co., AGCS’s main insurance unit, and will join the AGCS board of management, the statement said.
Canada
What is the P&C insurance sector's role in "building back better"?
If Canada’s property and casualty insurance industry wants Canadian homeowners to “build back better” after a natural catastrophe, it may have to revisit its foundational promise to restore a homeowner’s property to the condition it was in before the disaster.
Although this conclusion was never stated explicitly in a February 2023 Bank of Canada report on the financial impact of the 2016 wildfire in Fort McMurray, Alta., certainly the report hinted at this in a variety of ways.
For example, the report notes that in “Fort McMurray’s case, the Regional Municipality of Wood Buffalo secured $14 million in FireSmart for fire mitigation. They also launched a ‘Build Back Better’ campaign to promote the use of fire-resilient materials. However, KPMG’s (2017) independent review, commissioned by the Alberta Emergency Management Agency, suggests that this intervention is unlikely to happen because insurance payments were only available to rebuild properties to pre-fire conditions.”
Elsewhere, the report states:
“Our findings [about the broader financial impact of natural catastrophes] are…valid for the ongoing concerns of climate risk because insurance coverage improves recovery outcomes but only has a modest impact on risk reduction.”