Research
APCIA highlights rising property insurance losses amid affordability crisis
Inflation, overbuilding, and legal system abuses drive market challenges
The American Property Casualty Insurance Association (APCIA) issued a statement addressing rising property insurance losses and associated affordability challenges, citing inflation, overbuilding in high-risk areas, legal system abuses, and regulatory constraints as primary factors.
The statement, attributed to David A. Sampson (pictured), APCIA’s president and CEO, emphasized the need for systemic solutions rather than shifting risk to government programs.
“Property insurance losses have been escalating and it’s not just the weather,” Sampson said. He identified 40-year-high inflation, overbuilding in high-risk areas, and regulatory costs as significant influences on insurance affordability.
He said that APCIA was committed to promoting stronger building codes, environmental mitigation, and community resilience as practical approaches to improving affordability and sustainability.
Sampson cautioned against reliance on government insurance programs or regulatory rate suppression to address environmental risks, describing these as short-term measures that may perpetuate cycles of losses and rebuilding
Cambridge Mobile Telematics expects record distracted driving during holidays, AAA expects record travel
Cambridge Mobile Telematics (CMT) analyses on distracted driving surges continue to show the top two are Christmas Day and New Year’s Day.
In 2023, Christmas fell on a Monday, so in its analysis for the year, CMT compared Christmas distraction to the Mondays before and after Christmas to better account for daily driving trends. CMT defines distracted driving as any interaction with a phone screen while a vehicle is moving at over 9 mph.
On Mondays around Christmas, drivers typically spend an average of 2 minutes and 3 seconds per hour interacting with their phones behind the wheel. However, on Christmas Day, the amount of time jumped to 2 minutes and 27 seconds per hour — a 19.4% increase.
“The consequences of these increases in distraction are severe,” CMT wrote in a Dec. 12 press release. “CMT’s research indicates that a 10% rise in distracted driving correlates with a 1.5% increase in severe injuries and fatalities. For 2023 alone, this means that the 19.4% surge in distraction was responsible for an additional 650 crashes, 360 severe injuries, three fatalities, and $26 million in economic damages.”
New Year’s Day, also on a Monday in 2024, shows similar patterns. On the Mondays surrounding New Year’s, screen interaction averaged 2 minutes and 3 seconds per hour. On New Year’s Day, distraction rose by 16.4% to 2 minutes and 24 seconds, making it the third most distracted day of the year compared to 2023 figures, CMT wrote.
“Since 2020, every Christmas Day has ranked among the 100 most distracted days in the past five years, with none recording less than 2 minutes and 27 seconds of screen interaction per hour,” CMT wrote. “Similarly, New Year’s Eve and New Year’s Day show significant distraction-related impacts every year.
News
Congress unveils funding deal with more than $100 billion in disaster aid
[Ed. note: As of this writing the spending bill status is "fluid" and changing by the hour]
Congressional leaders have unveiled a stopgap spending bill that will keep the federal government funded through March 14 and provide more than $100 billion in emergency aid to help states and local communities recover from Hurricanes Helene and Milton and other natural disasters.
The measure would prevent a partial government shutdown set to begin after midnight Friday. It would kick final decisions on this budget year's spending levels to a new Republican-led Congress and President-elect Donald Trump. The continuing resolution generally continues current spending levels for agencies.
Passage of the measure is one of the final actions that lawmakers will consider this week before adjourning for the holidays and making way for the next Congress. It's the second short-term funding measure the lawmakers have taken up this fall as they struggled to pass the dozen annual appropriations bills before the new fiscal year began Oct. 1, as they typically do.
The bill will provide $100.4 billion in disaster relief, with an additional $10 billion in economic assistance for farmers struggling with low commodity prices and high input cost
InsurTech/M&A/Finance💰/Collaboration
MGAs embrace technology to lead insurance industry innovation - Insurance News | InsuranceNewsNet
Managing General Agents (MGAs) are increasingly turning to technology to stay competitive and drive innovation in the insurance industry. This was the central theme of a recent episode of Beyond the Text, a podcast hosted by Alyssa Gittleman of Conning. Joining her were Lauryn Kothavale, vice president at Conning and author of a recent MGA-focused report, and Kelly Maheu, vice president of Industry Solutions at Vertafore.
The discussion centered on findings from their joint report, Tech Power: How MGAs Are Shaping the Future of Insurance, which examines how technology is transforming MGA operations and market strategies.
Technology as a competitive advantage
Lauryn Kothavale explained that technology has become a critical differentiator for MGAs, enhancing underwriting outcomes, streamlining operations, and increasing agility to respond to market shifts. She noted that MGAs are leveraging technology not only to improve efficiency but also to innovate and deliver tailored solutions to niche markets. Kothavale pointed out that in 2023, MGAs saw a 13% growth in premiums, significantly outpacing the 10% growth of the broader Property & Casualty (P&C) market. This demonstrates the strong demand for MGA offerings and their ability to meet evolving market needs.
3 approaches to technology adoption
Kelly Maheu outlined three common approaches MGAs take when building their technology infrastructure:
- Carrier Systems: These are often used by affiliated MGAs due to their integration with carrier operations. However, carrier systems can be overly complex and lack the flexibility needed for MGAs to adapt quickly.
- Agency Management Systems (AMS): Many MGAs originating from agencies use AMS platforms, which can work well for managing limited lines of business. However, these systems often struggle to support expansion into new programs, creating scalability challenges.
- Focused Core Systems and Tech Stacks: Maheu emphasized that the most forward-looking MGAs are adopting configurable policy administration systems tailored to their unique needs. These systems integrate with advanced tools like APIs, automated underwriting engines, and data analytics platforms to enable innovation and efficiency.
Simply Business Partners with Coterie Insurance to Expand Business Owner's Policy Coverage Nationwide
Simply Business, LLC, the leading digital insurance marketplace focused on small businesses, today announced a new partnership with Coterie Insurance, a tech-enabled Managing General Agent (MGA) specializing in simplifying small business insurance. The addition of Coterie's solutions to Simply Business's marketplace expands Business Owner's Policy (BOP) coverage options with several leading national carriers, allowing small business owners to choose the coverage that best fits their unique needs at competitive pricing.
With Simply Business's fully digital quote, bind, and issue process, small business owners – from medical offices and tradespeople to restaurants and retail stores – can purchase specialized BOP coverage entirely online, simplifying the process of securing essential coverages in one convenient package.
"Coterie's digital-first insurance solutions and broad appetite make them an ideal partner in our mission to empower small business owners," said Samantha Roady, U.S. CEO at Simply Business. "Together, we're committed to providing a comprehensive suite of BOP solutions to even more types of small businesses across all 50 states with efficiency."
"By teaming up with Simply Business, we're expanding our digital footprint, underscoring our commitment to a streamlined insurance experience for small businesses," said David McFarland, CEO and co-founder of Coterie. "This platform integration increases coverage options for small business owners so they can have the right tools to confidently protect their businesses in an increasingly complex business environment."
Financial Results
Progressive reports 85.6% CR for November
Progressive released its financial results for November, ending the month with a combined ratio of 85.6% and net income of $1 billion.
For the first eleven months of the year, Progressive generated $7.5 billion in net income and achieved a combined ratio of 89.3%.
The insurer had ~34.73 million policies at the end of November, an increase of 17% compared to November of last year. During the month, Progressive added around 375k new policies to its overall count. Since the beginning of the year, Progressive increased its total PIF count by ~5 million.
Climate/Resilience/Sustainability
New Data Reveal Climate Change-Driven Insurance Crisis is Spreading
Senate Budget Committees' insurance probe reveals that climate change is increasing insurance non-renewals around the country and provides new evidence that a crash in property values may be looming
Today, Senator Sheldon Whitehouse (D-RI), Chairman of the Senate Budget Committee, released a first-of-its kind public dataset and accompanying staff report that expose the scale of the climate change-driven crisis in homeowners’ insurance. With this release, the Committee makes publicly available—for the first time—an accounting of insurance non-renewals at the county level from all 50 states and the District of Columbia, covering the years 2018 through 2023.
“Climate change is not just about polar bears and melting icebergs anymore,” said Chairman Whitehouse. “It’s also about climate-flation bleeding family budgets—with higher costs for insurance, groceries, and health care—and cascading economy-wide shocks. What our new data reveal is that the failure to deal with climate change is also affecting whether families can even get homeowners insurance, which threatens their ability to get a mortgage, which spells trouble for property values in climate-exposed communities across the country. If Republicans are serious about staving off such an economic catastrophe, they must take their hands out of Big Oil’s pockets and take climate change seriously. Our economy, our country, and our future are on the line.”
Innovation
How Telematics Could Transform the Collision Repair Process
SEMA Show showcases how telematics will be used to help collision repairers and insurers.
The 2024 SEMA Show was packed with cool cars and cutting-edge tech, but one theme stood out for collision repairers: Moving the repair process to the 21st century.
This year highlighted how telematics is changing the game for vehicle connectivity, safety, and efficiency. From advanced tracking systems to smart data tools, the show was all about how telematics is making our rides smarter and safer, as well as making the post-collision process more seamless for all parties involved.
Entegral
Entegral, a provider of software solutions for the automotive repair industry which is owned by Enterprise Mobility, showcased its full product suite in an interactive and immersive demo at Resorts World Las Vegas. The event highlighted how Entegral's platform connects repair shops, insurance providers, and customers to streamline the automotive claims experience.
According to Entegral , the demo aimed to educate and engage Entegral customers, prospects, and partners across the auto insurance, OEM, fleet, and collision repair industries about how its global product platform connects people, systems and data to streamline the automotive claims experience. This was the first time that Entegral demonstrated the power of its global connected product offerings in North America.
One thing that many Entegral employees emphasized throughout the event was the configurability of the overall platform, allowing shops and insurance companies to integrate Entegral’s technology into their own apps and workflows.
2025 PREDICTIONS
P&C pricing growth to slow and sustained strong cat reinsurance profitability expected in 2025: KBW - Reinsurance News
KBW predicts a mixed outlook for the Property & Casualty (P&C) insurance sector in 2025. While pricing growth is expected to slow overall, with declines in commercial property and reinsurance rates, commercial casualty lines should see modest acceleration.
Personal auto insurance rates will likely decelerate rapidly, while homeowners insurance rates increases are expected to decelerate more slowly.
Additionally, KBW analysts stated that Gross Written Premium (GDP) growth is projected to drive increases in exposure units, premium volumes , and broker revenues, although this would be more slowly than in recent years.
Improvement is expected to take place despite potential headwinds in their employment consulting businesses.
KBW anticipates continued strength in catastrophe reinsurance profitability, driven by stable terms and conditions, although tempered by overall rate decreases.
Primary commercial and personal property insurers should see improved core profitability, assuming normal weather, due to lower reinsurance costs, analysts stated.
Insurity Highlights How Severe Weather in 2024 Drives Consumer Concerns, Shifts in Insurance Behavior, and Prepares Industry for 2025
Survey reveals need for insurers to balance consumer expectations with proactive strategies, enhancing competitiveness, and protecting against escalating severe weather impacts
Insurity, a leading provider of cloud-based software for insurance carriers, brokers, and MGAs, today shared a comprehensive recap of its 2024 Severe Weather P&C Consumer Pulse survey, offering an in-depth analysis of severe weather trends, their impact on consumers, and the resulting implications for the insurance industry. The survey highlights a year marked by catastrophic hurricanes, tornado outbreaks, and wildfires that caused an estimated $135 billion in insured losses globally. These events not only underscore the growing financial impact of severe weather but also reveal shifting consumer priorities and opportunities for insurers in 2025.
2024’s extreme weather events exposed vulnerabilities in existing coverage options, prompting many consumers to reassess their policies and coverage preferences. According to the survey, 34% of respondents expressed concerns about their ability to secure coverage for weather-related risks in the near future. Additionally, 36% indicated a willingness to switch providers offering more robust severe weather coverage, while 27% said recent weather events influenced their decision to purchase additional coverage types, such as flood or earthquake insurance.
Innovation is playing an increasingly critical role in consumer decision-making, with 52% of respondents stating they are more likely to buy a policy from insurers actively investing in technology to enhance claims processes. This trend highlights the growing importance of operational efficiency and seamless customer experiences in earning consumer trust.
While respondents most frequently reported experiencing severe weather events like thunderstorms, wind/hail, and winter storms, their top concerns were focused on tornadoes, flooding, and wind/hail. This distinction underscores the evolving awareness of high-impact risks and is driving demand for insurance solutions designed to address these specific threats.
8 Trends Shaping the Future of Insurance in 2025
Download Majesco’s new research report to better understand current industry challenges, the evolution of past trends, and the accelerating forces shaping the future of insurance through 2025.
The insurance industry is at a pivotal crossroad, grappling with the realization that traditional operational models and legacy technologies are no longer sufficient in a rapidly evolving world. To remain competitive, insurers must shift from the mindset of “this is how insurance is done” to embracing innovation and transformation. Read this new report to understand the lasting impact of early InsurTech disruptions, and why further changes is still essential.
What’s in store for the insurance industry in 2025?
The insurance industry’s outlook is positive in 2025 but challenges remain, according to Alera Group’s annual Property and Casualty Market Outlook report.
Looking ahead, the US property and casualty industry is expected to continue growing next year, after being on track for higher profits this year. Improved underwriting results, slowing inflation and higher investment yields are all contributing to this positive outlook, the report said.
Barring a major catastrophic event, insurers expect increased competition, softening rate increases and adequate capacity. Pricing competition will likely improve in 2025 and better reinsurance terms and conditions for insurers would likely lead to more favorable terms for insurance buyers.
Still, extreme weather and abuse of the legal system remain concerns, according to the report. The insurance industry’s return on investment (ROI) has also lagged behind the S&P 500 composite ROI by five points. This isn’t the first time as in 2023, amid major rate hikes, insurance rate was at 13% ROI, compared with 18% for all industries.