Claims
The Rise of Data-Driven Claims Handling
The insurance industry is undergoing a significant transformation. At the heart of this change is the increasing adoption of data analytics to enhance claims management processes.
For claims adjusters, data-driven strategies offer unprecedented opportunities to improve decision-making, identify patterns, and forecast outcomes with greater accuracy. This essay delves into how data analytics is reshaping claims handling, providing adjusters with tools and insights to operate more efficiently and effectively.
Data has always been a cornerstone of the insurance industry. Traditionally, claims adjusters relied on historical records, policy details, and anecdotal evidence to resolve claims. While this approach has been effective to a degree, it often left room for inefficiencies, delays, and inaccuracies. The advent of advanced data analytics has changed this paradigm, empowering adjusters to harness vast amounts of structured and unstructured data to make more informed decisions.
Fraud
Dashcams Combat Rising Wave of Insurance Fraud | Insurance Thought Leadership
As dashcam adoption surges, these devices are becoming crucial weapons against rising insurance fraud and staged accidents.
The adoption of dashcams is skyrocketing. While the global dashcam market garnered $4 billion in 2022, it is predicted to surge to $12 billion by 2033.
Compared with many parts of the world, the U.S. has been slow to adopt dashcams, but that is changing. Recent statistics reveal that between 10% and 18% of U.S. drivers employ dashboard cameras.
Their growing popularity is linked to an unfortunate trend of insurance fraud. Each year, staged auto accidents cost insurance companies enormous amounts of money, which increases premiums for honest policyholders. Worst of all, these incidents put innocent lives at risk.
The growing presence of dashboard cameras on the road is proving to be a game changer, ensuring accountability and providing reliable evidence in traffic incidents.
COMPLETE ARTICLEp.com/auto-insurance/dashcams-combat-rising-wave-insurance-fraud)
Alex Mario is an attorney at Carter Mario Law Firm
News
Companies tighten security after a health care CEO's killing leads to a surge of threats
"Wanted" posters with the names and faces of health care executives have been popping up on the streets of New York. Hit lists with images of bullets are circulating online with warnings that industry leaders should be afraid.
The apparent targeted killing of UnitedHealthcare CEO Brian Thompson and the menacing threats that followed have sent a shudder through corporate America and the health care industry in particular, leading to increased security for executives and some workers.
In the week since the brazen shooting, health insurers have removed information about their top executives from company websites, canceled in-person meetings with shareholders and advised all employees to work from home temporarily.
An internal New York Police Department bulletin warned this week that the online vitriol that followed the shooting could signal an immediate "elevated threat."
Police fear that the Dec. 4 shooting could "inspire a variety of extremists and grievance-driven malicious actors to violence," according to the bulletin, which was obtained by The Associated Press.
"Wanted" posters pasted to parking meters and construction site fences in Manhattan included photos of health care executives and the words "Deny, defend, depose" — similar to a phrase scrawled on bullets found near Thompson's body and echoing those used by insurance industry critics.
Thompson's wife, Paulette, told NBC News last week that he told her some people had been threatening him and suggested the threats may have involved issues with insurance coverage.
Texas Accuses Allstate-Owned Arity of Data Privacy Violations
Texas Attorney General Ken Paxton has filed a notice of violation against Allstate-owned Arity, a mobile data company that collects drivers’ information, for breaching the Texas Data Privacy and Security Act (TDPSA).
The Nov. 29 notice alleges Arity fails to provide customers with a clear notice of the categories of sensitive data being processed and processes customers’ data without their consent.
Arity processes sensitive data through its use of a software development kit to collect data from various mobile applications, including precise geolocation information and how fast a customer’s mobile phone is moving. Arity sells information to car insurance companies.
Financial Results
US nonstandard auto insurance manages to squeeze small profit in H1'24, AM Best
According to AM Best, the global credit ratings agency, the US nonstandard auto insurance segment has posted a slight profit for the first half of 2024, following two years of unprofitable but improving results.
A new report released by the agency states that the results of the companies that comprise AM Best’s private passenger nonstandard auto (PPNSA) composite generated an underwriting income of $13 million in H1 2024.
This represents a notable improvement from the $457 million underwriting loss that was reported during the same period last year.
It’s worth showcasing that prior to the improved results seen in H1’24, post-pandemic headwinds majorly affected the profitability of standard and nonstandard auto insurers.
From what we understand, those headwinds included persisting rate inadequacy, the effect of inflationary pressures on body shops, the cost of auto parts, used car prices, as well as an increase in attorney-represented bodily injury claims.
“The operating results of the PPNSA composite have lagged those of AM Best’s private passenger standard auto composite. The key differences have been in the combined ratios for the two composites, measuring bottom-line underwriting profitability. The personal auto line also benefits from being a leader in leveraging current technology in all operational areas, including claims, underwriting, and distribution,” commented David Blades, associate director, AM Best.
Commentary/Opinion
7 Common holiday-related injuries and accidents
Not being careful during the holidays can result in a visit to the ho-ho-hospital.
Christmas isn’t the most injury-prone time of year. Memorial Day, Fourth of July and Halloween all have higher injury rates, according to a study.
But each year, thousands of people experience Christmas-time injuries and health issues. Roughly 18,400 people visit emergency rooms annually due to accidents involving Christmas decorations alone, according to USAFacts. The peak of those injuries is usually the Sunday after Thanksgiving.
That doesn’t even factor in additional injuries related to holiday car accidents, food poisoning, toy-related mishaps and more.
Christmas-time injuries can add up. For people enrolled in a large employer plan, the average emergency room visit costs $2,453, with $646 in out-of-pocket costs, according to a 2022 study.
Research
Record Number of Holiday Travelers Expected - CollisionWeek
AAA projects 119.3 million people will travel 50 miles or more from home over the year-end holiday period from Saturday, December 21 to Wednesday, January 1.
This year’s domestic travel projection narrowly surpasses the previous record set in 2019 by 64,000 travelers. AAA expects an additional 3 million travelers this holiday season compared to last year.
“This is the time of year when lifelong memories are made with loved ones, and travel plays a big role in that,” said Stacey Barber, Vice President of AAA Travel. “This year, with Christmas Day falling on a Wednesday, we’re anticipating record-breaking travel numbers the weekend before and the weekend after the holiday.”
Nearly 90% of holiday travelers will be driving to their destinations, making it the most popular way to travel. 107 million people are expected to travel by car, and while that number is 2.5 million higher than last year, it’s shy of 2019’s record of 108 million. Many travelers, particularly families with young children, prefer the flexibility and lower cost that road trips provide. This holiday season, gas prices are lower than last year, when the national average was around $3.12 in the last two weeks of 2023. Gas demand in December goes down as the weather gets colder, more people work remotely, and holiday shoppers purchase their gifts online versus in person.
Canada
TECHNOLOGY POWERED CLAIMS
Insurance companies are embracing technologically advanced trends like generative AI and machine learning to address industry challenges.
According to Reuters’ recent report, titled The Future of Insurance in Canada: Top Technology Trends in 2024, the majority of Canadian insurance representative respondents indicated that their companies have already invested in “established technologies,” with 79 percent saying their companies have invested in data analytics and 72 percent saying they’ve invested in automation.
The report further notes that exactly 50 percent of Canadian insurers said their organizations are planning to adopt automated technologies like generative AI. Thirty-three percent of respondents indicated their companies are testing scenarios where AI can be used, compared to just 22 percent of insurers globally.
In total, 37 percent of Canadian survey respondents indicated their organization had already used generative AI in test-use cases; had evaluated potential vendors or even moved on to full-scale implementation. According to Reuters’ analysis, generative AI and machine learning will be the top trending investment by insurance representatives come 2027. In 2024, generative AI and machine learning are the eighth and ninth-most invested in technology by insurers. As of 2024, data analytics are the top-ranked insurer investment, followed by digital portals and automation.
2025 PREDICTIONS
What’s Not Changing in 2025: Homeowners Outlook, Re Retentions
When analysts at AM Best reviewed outlooks for the property/casualty insurance and reinsurance sectors this week, recent good news of a change in outlook for personal lines—and for the personal auto insurance—were the first highlights.*
But a cloud remains over one piece of the personal lines pie. The outlook for homeowners insurance remains negative, said Richard Attanasio, senior director–Personal Property/Casualty, during a webinar briefing on the main segments of the insurance industry.
“Challenges remain, and the biggest challenge is the volatility in weather and results,” Attanasio said after listing a half-dozen factors, mainly boosting personal auto results, that allowed AM Best to switch the personal lines outlook from negative to stable.
Munich Re announces profit target of €6bn for 2025 | Munich Re
Thanks to consistently good operational performance in all business segments, Munich Re is aiming for an IFRS net profit of €6bn in 2025. Group insurance revenue is expected to reach €64bn in 2025, and return on investment to improve to above 3.0%.
In its reinsurance field of business, Munich Re anticipates an expansion of insurance revenue to €42bn and a net profit of €5.1bn in 2025. In an ongoing favourable market environment, Munich Re will continue to leverage its strong market position. The combined ratio is expected to remain at an attractive profitability level, with a combined ratio of 79% in P&C reinsurance and 90% in Global Specialty Insurance (GSI), the latter of which will become a separate IFRS reporting segment from 2025. Due to expected strong business growth in GSI and a lower discounting effect compared to 2024, this corresponds to a combined ratio of 83% for P&C reinsurance according to the current segmentation. In life and health reinsurance, Munich Re projects a total technical result of €1.7bn in 2025.
Swiss Re eyes $4.4bn net income & leaner P&C CoR in 2025 - Reinsurance News
Swiss Re has revealed its financial targets for 2025, including a Group net income of more than $4.4 billion, and a Property & Casualty Reinsurance combined ratio of less than 85%.
According to the global reinsurer, all business units are aiming for more ambitious targets compared with 2024. L&H Re aims to achieve a net income of $1.6 billion for the year, and Corporate Solutions sees a combined ratio of less than 91%.
Swiss Re also intends to grow the ordinary dividend per share by 7% or more per year over the next three years and maintains its multi-year IFRS ROE target of more than 14%.
The firm’s Group Chief Executive Officer, Andreas Berger, commented, “We have taken decisive actions in 2024 to increase the resilience of our business. We achieved our goal of positioning overall P&C reserves at the higher end of the best-estimate range.
Sedgwick shares major trends in Forecasting 2025 report
Sedgwick, a leading global provider of claims management, loss adjusting and technology-enabled business solutions, has published its Forecasting 2025 thought leadership report.
In preparing the report, Sedgwick's experts conducted research and engaged with clients for notable insights to forecast trends across key sectors and topics. The content focuses on ensuring organizations are aware of new risks and evolving trends and helping them navigate the unexpected in the year ahead.
The Forecasting 2025 thought leadership report highlights trends related to:
The future of the workplace: Organizational leaders will need to navigate generational differences, an ever-increasing focus on mental health, and new strategies for talent recruitment, retention and development — while developing efficient support systems to respond in the event of workplace injuries, accidents and other crises.
Recalls, regulatory landscape and compliance: Strategies like "mock recalls" will be a priority as leaders focus on maintaining public trust, tailoring communication strategies to broader and more segmented audiences, and maximizing awareness and response in the event of a product recall.
Catastrophe planning and disaster recovery: Operational continuity in the event of a disaster will be key in 2025, as business and property owners, company leaders and private citizens anticipate the rising frequency and intensity of droughts, extreme temperatures, flooding and storms. Parametric insurance policies will become more common, as will new building methods and construction strategies amid regulatory and policy changes, technological advancements, and environmental, social and governance (ESG) initiatives.
AI and …: Artificial intelligence and robotics have driven some of the most prominent workplace evolutions over the past few years. In 2025, these and other leading-edge technologies will continue to play a significant role in the way companies promote efficiencies and engage with customers. However, business leaders must be able to keep up with new regulations, understand the associated vulnerabilities and risks, and put a team in place to effectively implement and maintain them.
Planning ahead: The world is rapidly changing, becoming more uncertain and volatile every day. Supply chain disruptions, new tariffs, more frequent and sophisticated cyber-attacks and business interruption will greatly impact organizations in 2025. Diversification, rapid response and technology will be critical tools in being as prepared as possible.
"2024 was a seismic year across industry sectors as companies navigated the unexpected, and 2025 will be no different," said Kimberly George, Sedgwick's Global Chief Brand Officer. "These predictions serve as a barometer for what's to come, so leaders around the world can prepare accordingly."