Commentary/Opinion
Trump's Tech Vision will Transform Insurance Markets - EIS
EIS's Global Strategic Lead, Rory Yates, analyses how Trump’s embrace of Silicon Valley giants could reshape insurance technology and innovation.
The symbolic significance of Trump's second inauguration has sent ripples through the insurance and technology sectors.
As Rory Yates, Global Strategic Lead at EIS, observes: “They are calling this Trump 2.0, and for good reason. Getting Elon, Mark and Jeff to sit together at the inauguration alone seems to signal that tech will be a strong feature in Trump's second presidency.”
Lessons From 2024’s Extreme Weather Events
The year 2024 will be remembered as a defining moment in the history of weather-related catastrophes. From unprecedented heatwaves to catastrophic floods, the devastating effects of extreme weather patterns left no corner of the globe untouched.
The year began with an unexpected and prolonged heatwave in Australia, followed by a series of devastating wildfires that displaced thousands of residents and caused extensive property damage.
News
NAIC faces $6.6 million deficit as 2025 budget prioritizes tech and staffing
The National Association of Insurance Commissioners (NAIC) anticipates $167 million in revenue for 2025, including investment income, against projected expenses of $173.6 million.
The $6.6 million shortfall is attributed to an 8.8% increase in expenses driven by higher staffing needs, inflation, and technology-focused initiatives, according to the association's budget document.
The forecasted revenue represents a 6.2% increase over 2024, while the projected expenses continue a trend of operating with deficits, a practice the nonprofit group has managed in prior years. For example, the 2022 budget projected a deficit of $7.5 million.
The NAIC’s budget outlines eight major priorities for 2025, each expected to have a fiscal impact of at least $100,000 or require over 1,150 hours of internal technical resources. As per a report from AM Best, five of these initiatives focus on technology enhancements to modernize NAIC systems, while others aim to expand analytical, informational, and operational capacities.
Congressman introduces bill to abolish Federal Insurance Office
Proposed legislation is getting strong support from the insurance industry
Former insurance commissioner and newly elected Montana Congressman Troy Downing introduced a bill in the US House of Representatives aimed at abolishing the Federal Insurance Office (FIO), according to a statement from his office.
Downing, a Republican representing Montana’s 2nd district, stated that regulation of the insurance industry should remain under state jurisdiction, not the federal government.
“FIO is a duplicative federal bureaucracy whose existence hinders the efforts of state regulators better equipped to address the insurance needs of their communities,” Downing said. “I was proud to call for FIO’s abolishment as Montana State Auditor, and I gladly do it now as a congressman and member of the House Financial Services Committee.”
As of January 24, the text of the bill was not available, according to Congress.gov, according to AM Best.
The proposed legislation has received strong support from the insurance industry. Jimi Grande, senior vice president of federal and political affairs for the National Association of Mutual Insurance Companies (NAMIC), expressed concern that the FIO had surpassed its intended role as an informational resource for policymakers.
Insurers are dropping HOAs, threatening the condo market
Insurance problems are driving up the costs of condo living and putting ownership dreams out of reach.Homeowners' associations are struggling to find master insurance policies, forcing fees higher for residents.
Insurance is getting harder to find and more expensive in much of the country. Just ask homeowners' associations.
Mirroring trends in the single-family home market, insurers are boosting premiums or exiting the business of covering HOAs’ common property entirely, citing rising losses from extreme weather and aging buildings. The steep premium hikes usually end up passed on to individual owners in the form of higher monthly dues.
For many insurers, HOA coverage is a relatively niche product, but the 74 million Americans who live in those communities rely on what’s known as master policies to insure common property like sidewalks, playgrounds, and in the case of multifamily buildings, roofs and certain interior and exterior features.
These higher insurance costs are yet another expense that’s making homeownership a challenge for a growing swath of Americans. They are also increasingly unavoidable: In many parts of the country, HOA communities make up a growing proportion of local housing stock.
“All of the catastrophes and the disasters have contributed to rising premiums,” said Dawn Bauman, executive director for the Foundation for Community Association Research. “It’s not just condominium associations or community associations — it’s every piece of the insurance market.”
Washington State Bill Opens Way for Policyholder Restitution for Infractions, Per-Violation Penalties
Washington’s legislature is considering a bill that would grant the insurance commissioner’s office the power to require restitution directly to policyholders for violations of state law and allow property/casualty insurers to incur fines on a per-violation basis.
As it stands, the only path of recourse for wronged policyholders is through the courts, Insurance Commissioner Patty Kuderer said in a statement. The legislation is one of the top priorities for Kuderer, who is in her first term as commissioner after winning the November election (BestWire, Nov. 6, 2024).
“Any fine we collect goes into the state general fund. It does not make the policyholder whole,” Kuderer said.
The Office of the Insurance Commissioner gave several examples of restitution-generating violations, such as using an unapproved rate or acting as an unauthorized insurer. Currently, there is no way for a policyholder to be reimbursed for overpayment due to an unapproved rate, and the commissioner can fine unauthorized insurers but cannot order them to repay the money they took.
Restitution payments would also include 8% simple interest, which would commence on the date the obligation arose, the commissioner's office said.
“As the new insurance commissioner for Washington state, I don’t believe we should be passing people off to seek help in the already clogged court system when we could be providing restitution directly,” Kuderer said in a statement.
InsurTech/M&A/Finance💰/Collaboration
Generali partners with MIT to explore AI in insurance
*The partnership will focus on the practical applications of AI in risk modelling, claims assessment and smart underwriting.
This initiative is part of Generali’s Lifetime Partner 24: Driving Growth plan, which emphasises digital transformation as one of its three pillars.
Generali has entered into a research collaboration with the Massachusetts Institute of Technology (MIT) to explore the potential of AI in providing “competitive advantages” to the insurance sector.
The partnership will focus on the practical applications of AI in crucial business areas such as risk modelling, claims assessment and smart underwriting, starting in January 2025.
It particularly involves MIT’s laboratory for information and decision systems.
The alliance will see Generali’s data professionals working closely with MIT researchers, aiming to develop innovative services and scalable solutions while tapping the latest AI and machine learning data.
This initiative is part of Generali’s Lifetime Partner 24: Driving Growth plan, which emphasises digital transformation as one of its three pillars. Generali has committed resources to digital and technological advancements, with investments of €1.1bn ($1.15bn) over the three-year period 2022–24.
Announcements
MOTER Technologies Announces Partnership with Sony Honda Mobility to Power Insurance Offerings for AFEELA
MOTER Technologies partners with Sony Honda Mobility of America Inc. to integrate innovative insurance solutions into AFEELA EV sales.
MOTER Technologies, Inc. (MOTER) announced a key partnership with Sony Honda Mobility of America Inc.(SHMA) to provide integrated insurance solutions for AFEELA, Sony Honda Mobility's new brand of software-defined electric vehicles. Leveraging MOTER's expertise in OEM insurance programs and partnerships with insurance companies, this collaboration will enable a seamless, integrated customer experience for buyers of the AFEELA vehicles.
"With AFEELA, Sony Honda Mobility is redefining the next generation of mobility. We're excited to join forces and bring our comprehensive insurance platform directly into their vehicle sales experience," said Kenji Fujii, CEO & Co-Founder of MOTER Technologies. "Together, we look forward to delivering a streamlined, innovative experience that meets the evolving needs of today's drivers."
People
CNA's Dino Robusto named chair of APCIA board of directors | Insurance Business America
The American Property Casualty Insurance Association (APCIA) has approved new leadership for its board of directors, effective Jan. 1.
Dino E. Robusto (pictured), executive chairman of the board at CNA Financial Corporation, has assumed the role of chair, succeeding Alan Schnitzer, CEO of Travelers, who led the board for the past two years.
David A. Bell, president and CEO of ALPS Corporation and ALPS Property & Casualty Insurance Company, has been named chair-elect.
APCIA president and CEO David A. Sampson highlighted the significance of the appointments
EMEA
Mistral’s origin story has an insurtech founder at its heart | TechCrunch
If you’ve been following the AI industry, Mistral should be a familiar name by now. The French AI startup with a $6 billion valuation is arguably the biggest AI company working on foundation models in Europe.
Alan, on the other hand, isn’t as well known. The health insurance unicorn has been quietly growing to become a digital companion for your health. Over 680,000 people are covered by Alan’s insurance in a handful of countries.
The connection between those two companies is *Jean-Charles Samuelian-Werve, Alan’s co-founder CEO and Mistral’s co-founding advisor.
Bloomberg’s published a curious story explaining his role and some insights into Mistral’s origin story. “Arthur Mensch is the public face of French AI champion Mistral, but another startup’s CEO has been critical to its $6 billion valuation,” Bloomberg wrote. While Samuelian-Werve has been listed as a co-founding advisor since the inception of Mistral, no one had quite ascribed so much credit to him in the founding and growth of the French AI company.
According to Bloomberg, Samuelian-Werve saw the AI boom coming before the release of ChatGPT. He first reached out to Xavier Niel, the telecom billionaire behind Station F and Kima Ventures, to create an AI nonprofit. But when Samuelian-Werve met Arthur Mensch and Mistral’s other co-founders, he dropped the nonprofit idea in favor of what is now known as Mistral.
It was around that same time that Alan’s other co-founder and CTO Charles Gorintin, as well as former digital minister Cédric O also became founding advisors to the Paris-based AI juggernaut.
Los Angeles Wildfires
LA Wildfires by The Numbers: Insured Losses, Total Losses, Ratings, Rates
The impact of the historic Los Angeles-area wildfires is being broadly examined and continually refined, with updates almost daily on insured losses, total economic losses and damages, credit ratings—and lately worrying outlooks for the effect of the fires on insurance rates.
Tens of thousands of properties will be ultimately lost when final counts come in, along with dozens of fatalities. Insured losses range from $8 billion for the two largest fires to $40 billion for all of five. Total economic losses are expected to be well into the hundreds of billions of dollars.
California - Advance Claim Payments for Wildfire Victims
The California Insurance Commissioner published a bulletin reminding insurers of the protections provided by California insurance law designed to aid policyholders in situations like the current wildfires.
Under California insurance law, insureds who suffered a total loss should receive advance payments on their claim. If a property loss is determined to be a total loss, the law requires an additional living expense (ALE) advance payment and a payment of contents without inventory.
The ALE advance payment should be for a minimum of four months of living expenses, and additional payments after proper proof is provided after the advance period. The contents payment should be for a minimum of 30 percent of the policy limit, with a max of $250,000, without the requirement for an itemized inventory. The insured can file an itemized claim at a later date for additional payments.
The Department has received feedback that many policyholders have received these advance payments, but many have not. Insurers are urged to use tools such as satellite imagery or direct inspection by adjusters to promptly determine if there has been a total loss.
There are other protections provided by California insurance law following a state of emergency. One such protection is policyholders have a minimum of 36 months after their actual cash value payment is made to collect the full replacement cost of the loss. Another is policyholders may combine the policy limits for dwelling and other structures in order to rebuild the dwelling if the dwelling limit has been reached.