Research
2024 US Auto Insurance Market Report — S&P Global Market Intelligence
The US auto insurance industry continues to emerge from four years of pandemic-induced volatility, but individual carriers’ approaches to an improving marketplace remain characterized by the sort of caution that historically poor underwriting results can induce.
S&P Global Market Intelligence projects that the private-passenger auto business is poised to return to profitability in 2024, just two years removed from its worst underwriting results in generations. The commercial auto business remains subject to unique dynamics, including challenging niches and prospects for outsized jury awards and legal settlements in specific jurisdictions, that likely makes its path to recovery less linear in nature. In both cases, we expect the pandemic-era volatility to have a lasting impact on market composition.
The private auto business has been consolidating for years both in terms of market share and the number of carriers writing meaningful amounts of premiums — and for good reason. The largest players in the space have increasingly differentiated themselves in a variety of ways, leveraging competitive advantages that vary from company to company but cumulatively serve to concentrate more business in a smaller array of carriers.
Climate/Resilience/Sustainability
International, domestic insurers push into catastrophe-hit US property markets
International and domestic insurers are pushing into the U.S. market for hard-to-protect homes, charging high premiums and enjoying strong profits after some U.S. firms pulled out.
Rising losses from storms, hurricanes and wildfires in recent years have caused some insurers, such as Allstate and State Farm, to cut back cover in catastrophe-hit states like Florida and California.
This has left greater room for non-domestic players like Hiscox (HSX.L), and Munich Re (MUVGn.DE), to enter the fray, industry sources say. Allstate did not respond to a request for comment, while State Farm declined to comment.
According to a report this month from Swiss Re, 2024 will be the fifth consecutive year that global insured losses from natural catastrophes, opens new tab exceed $100 billion.
Recent large U.S. hurricanes Helene and Milton have added to concern about property losses. However, the increasing regularity of extreme weather events has stoked the market for more expensive excess and surplus lines, or E&S.
Homeowners' premiums have risen by as much as 100% in the past couple of years in areas such as Los Angeles and the southeast of Florida, said Brian Bazan, a vice president at broker Hub International.
It was not unusual for premiums to rise 50% when policyholders transferred from the admitted market, though increased competition was starting to bring those rate increases down, he added.
Most properties in the United States are covered via so-called admitted line insurance, where premium rates have to satisfy the state insurance regulator.
How startups can drive insurance innovation to mitigate climate crises | Ctech
Global insurance companies, which insure against the damage from natural disasters, are at a critical juncture as 2025 approaches. A recent World Economic Forum survey identified extreme weather as the top global crisis, affecting sectors like real estate, health, and logistics. Recent reports from Munich Re, the German reinsurance giant, reveal that global insured losses for 2023 reached $95 billion, exceeding the 10-year average due to the rising frequency and severity of destructive storms.
The annual UN Climate Change Conference, which took place last month in Baku, Azerbaijan discussed many different, substantial angles of climate change. These worrying statistics are forcing insurance companies around the world to rethink, mainly in terms of adoption of innovative technologies. The challenges of accurately assessing, pricing, and mitigating climate-related risks are immense, yet it also presents unique opportunities for collaboration with climate tech innovators.
Extreme weather variability complicates risk modelling and underwriting processes. Traditional models, based on historical data, struggle to keep pace with the unpredictable nature of modern climate patterns.
This trend has resulted in increased claims, reduced profitability, and a withdrawal from high-risk markets, with some insurers already limiting operations in certain regions.
As climate risks grow, the industry’s reliance on innovative solutions, such as artificial intelligence (AI), machine learning (ML), and satellite imaging, is becoming essential for more precise risk assessments and faster claim settlements. Use of innovative technology is an urgent need for global insurance companies in order to become more efficient.MORE
Commentary/Opinion
Broken Trust—Insurance Industry Included | Insurance Innovation Reporter
The insurance industry must take action to foster greater public trust at a time when public confidence in institutions is at a low point.
It is a well-known adage that “trust takes years to build, seconds to break and forever to repair.” The extensive and growing loss of trust in our most treasured institutions is responsible for the recent and rapid transformation of behavior and attitudes across the entire landscape.
Trust is created by the belief that institutions will uphold their stated values, follow established rules, and act with integrity, leading to a willingness to rely on them and respect their decisions. High levels of institutional trust are crucial for a well-functioning society, enabling cooperation, social stability, and citizen engagement.
When trust in institutions is low, it can lead to cynicism, social unrest, decreased participation in civic life, and difficulty implementing policies. The insurance industry ranks high on the list of vilified industries, including but not limited to healthcare. Unfortunately, the murder of Brian Thompson and the ensuing criticism of that industry from many quarters is likely to bring more scrutiny to all segments of the insurance industry, including P&C. And some of that negativity may be justified.
Stephen Applebaum & Alan Demers as featured in Insurance Innovation Reporter
How the insurance industry is giving back this holiday season
The holiday season is a time to give back, and the insurance industry is stepping up through a variety of impactful initiatives. Whether through toy drives, donations to disaster relief funds, or supporting local charities, companies across the sector are finding meaningful ways to give back to their communities.
These efforts not only provide crucial support to those in need but also showcase the industry's commitment to making a positive difference during challenging times.
Here’s how leaders in the industry, including Canada’s Mitch Insurance and the Independent Insurance Agents & Brokers of America (IIABA), are inspiring others with their charitable actions this holiday season.
This year has been particularly difficult for agents and brokers, with natural disasters causing extensive damage across the United States and Canada. Hurricanes Milton and Helene have led to widespread destruction, with recent estimates placing total losses from both hurricanes at an astounding $55 billion, while the Jasper wildfire and hailstorms in Calgary tore through Canada.
Predict & Prevent
Phyn and Nationwide partnered to offer leak detection solutions for homeowners
Phyn, an intelligent water solutions company, announced a partnership with Nationwide, a leader in insurance and financial services, to offer leak detection solutions for new policyholders with high-value homes. As part of the new program, Nationwide customers can receive a 15% discount on Phyn’s award-winning product suite to enhance their home protection plans and safeguard against water-related loss.
By providing whole-home monitoring, early detection, real-time notifications, and automatic water shutoff functions, Phyn helps protect homes from the costly consequences of water leaks, promotes water conservation and offers homeowners peace of mind.
Phyn-protected homes are 99% less likely to experience a non-weather water leak claim, according to an internal Phyn study across 13,500 homes over a three-year period.
With Phyn, we’re providing our customers with access to cutting-edge technology to help detect and prevent leaks, reinforcing our commitment to innovative solutions that safeguard their homes and propertiesMark Teets, Nationwide’s Associate Vice President of Personal Lines Underwriting Strategy
“Phyn’s leak detection solutions offer homeowners 24/7 protection and critical insights into their plumbing system,” said Ryan Kim, CEO of Phyn. “Undetected leaks can lead to health risks, home displacement, financial losses, and damage to irreplaceable personal belongings. Our partnership with Nationwide empowers policyholders with the tools to proactively manage these risks, helping them avoid costly water damage and make smarter decisions about their water use.”
Skylark Labs and Mercedes-Benz Research and Development India Achieve Breakthrough in Road Safety with AI-Driven Accident Hotspot Detection System
Skylark Labs, a pioneer in self-learning AI-powered safety innovations, in collaboration with Mercedes-Benz Research and Development India (MBRDI), has completed Phase I of its revolutionary Accident Hotspot Detection System. This breakthrough achievement demonstrates the system's unparalleled ability to predict and alert drivers to imminent accident hotspots in real time, marking a significant leap forward in road safety.
This cutting-edge AI solution addresses a critical void in vehicular safety by providing drivers with an Accident Awareness Score that offers real-time risk insights, alerting them 500 meters ahead of potential danger zones. The system's dynamic adaptation to road conditions, weather, and driving behavior ensures that drivers receive timely and actionable alerts, enhancing their ability to avoid accidents.
"Reaching this critical phase brings us closer to our goal of transforming road safety on a global scale," said Dr. Amarjot Singh, CEO of Skylark Labs. "Our Accident Hotspot Detection System is more than just a technological innovation; it's a life-saving tool that equips drivers with the information they need to avoid accidents.
Looking ahead, Skylark Labs envisions bringing new safety technology to every car in the world. Our roadmap includes developing technology that would enable AI on-board vehicles to share learned knowledge, creating a collaborative AI superintelligence network where cars can learn from each other's experiences. This advancement would mark another step in our mission to revolutionize road safety."
AI in Insurance
The Third Wave of AI | Insurance Thought Leadership
After the initial wave of AI efforts and then the generative AI phenomenon that began two years ago, you'll hear a lot in 2025 about AI that can act as our agents.
Like most of us, you're probably still coming to grips with the disruptive effects of the generative AI boom that began just two years ago, but there's no rest for the weary.
It's time to gear up for the next wave, known as agentic AI.
Basically, this form of AI goes beyond the sort of gathering and processing of information that generative AI does as it responds to prompts and produces text or images. Agentic AI can act as a sort of personal assistant and execute tasks on your behalf. To pick a simple example: Rather than just telling you what information is available on a claim, your agentic AI could ping people on your behalf and ask for the detailed cost estimate you need or for an update on when car repairs will be finished, then notify the client, without the need for you to be involved.
Paul Carroll, editor-in-chief, Insurance Thought Leadership
Four P/C Insurers Are ‘AI Titans’; AI Impact Leaders Revealed: Research
A research firm has identified 100 insurance industry participants that are making a difference with artificial intelligence, including four insurance carriers with property/casualty insurance operations that the firm characterizes as “AI Titans.”
Most Impactful, a proprietary research initiative measuring business effectiveness of firms in the financial services ecosystem, has named Allstate, Nationwide, Travelers and USAA among 11 insurance companies and distributors whose investments in AI technology and talent outpace peers.
“These insurance firms make substantial AI/ML investments in absolute dollar terms. AI Titans file AI/ML patents, offer a comprehensive range of products, and have strong partnerships with global tech giants at the forefront of AI/ML,” says the report,
“Most Impactful Insurance: AI.” In addition, Titans employ large workforces “with relevant expertise in AI/ML, build multiple products themselves and experiment with leading-edge use cases.”
How insurers are using AI to plug leaks in the claims cycle
Insurers are using nascent data signals and critical insights generated in the claims process to fine-tune responses and address anomalies in real-time.
Property and casualty (P&C) insurance business models have been put to the test over the last few years as a combination of sky-high repair costs, longer cycle times and a steady stream of rate increases have driven record levels of customer attrition and strained profitability.
In auto insurance, for example, despite industry-wide premium increases of 11.2%, on average, insurers have been losing five cents for every dollar of premium they charge for much of the past year.
While insurers recognize that simply raising rates is not a sustainable solution to the myriad challenges they face, few have been able to implement the types of structural fixes to their businesses that will enable them to offset these rising costs with improved efficiency.
One area where some leaders are having success, however, is in deploying generative artificial intelligence (GenAI) and advanced analytics to immediately identify and plug holes in their claims cycles.
Real-time claims monitoring Rather than reinvent their entire operational structures, these insurers are finding ways to tap into nascent data signals and critical insights generated in the claims process to fine-tune responses and address anomalies in real-time.
Fraud
American Transit Insurance Company Files Over $450 Million Insurance Fraud Case Against Over 180 Defendants
American Transit Insurance Company (ATIC), a leading commercial automobile liability insurance provider with specialization in the taxi and for-hire vehicle sector, filed a lawsuit today seeking more than $150 million in compensatory damages (over $450 million in trebled damages), as well as punitive damages, from over 180 defendants in the New York and New Jersey area.
The case, filed under the federal Racketeer Influenced and Corrupt Organizations Act (RICO), which allows recovery of three times incurred compensatory damages, and New York State common law, alleges that the defendants, including certain ambulatory surgery centers and related health care entities and individuals, engaged both individually and as part of a conspiracy to submit thousands of fraudulent insurance claims to ATIC. The case is one of the largest insurance fraud RICO actions ever filed in New York State. The case is denominated American Transit Insurance Company v. All City Family Healthcare Center Inc., et. al., Case No. 24-cv-08606.
The complaint seeks to recover funds ATIC paid to providers who are alleged to have unlawfully sought payments for services, including ambulatory surgical centers that the complaint alleges were improperly licensed. The complaint further alleges that the services were rendered as a result of improper kickbacks or patient referrals, services that were not provided as billed or were provided in a manner misrepresenting the services provided, were medically unnecessary, and were provided to maximize reimbursement pursuant to a pre-determined protocol irrespective of the actual medical condition and needs of patients.
Webinars/Podcasts/Interviews
The Insurance Intelligence Podcast: "Biggest Stories of 2024" - J.D. Power
On this episode of our podcast, the team takes a look back at the biggest stories to influence the insurance market in 2024.
This episode covers:
- The return to profitability
- Shopping and switching trends
- The rise of the importance of trust
- Claims bright spots And more!
Hosted by: Michael Vermillion, VP and General Manager, Insurance & Healthcare
Featuring: Stephen Crewdson, CPCU, Senior Director, Insurance Intelligence Mark Garrett, Director, Insurance Intelligence Scott Quarderer, Managing Director, Insurance Intelligence