Winter weather alerts posted as several winter storms get set to barrel across US  February 10th 2025

Best's Review Explores Latest Insurance Industry Innovations

The February issue of Best’s Review examines progress and initiatives in an industry that’s often viewed as resistant to change:

• “Insurers Discover Value in Innovation Culture” provides insight from several industry leaders on how innovation is now seen as necessary to a company’s survival.
• “Innovation Hubs Attract Interest, Support From Insurance Companies” looks at several initiatives to foster insurtech startups, spur new product development and enhance data and digital capabilities.
• “Lloyd’s Chief Commercial Officer: Accelerator Nurturing More Than 100 New Insurance Startups” features an interview with Lloyd’s executive Dawn Miller about innovation’s role in the industry.
• “Leading AI Platforms Delve Into Insurance Industry Innovations Across Product Lines” presents responses from three artificial intelligence large language models about recent insurance industry innovations.

Also included:

• “Tech Panel: AI Will Displace Jobs but Also Create Opportunities for Upskilling” features a panel discussion about how artificial intelligence will impact the workforce.
• “‘Build vs. Buy’ in the Digital Age” covers both sides of the debate about whether it is better to develop proprietary applications or acquire third-party solutions.

CCC Intelligent Solutions Whitepaper on OEM Certification Programs

[ED. NOTE: This well written and informative whitepaper from CCC Intelligent Solutions on OEM collision repair shop certification leads US to three conclusions.]

1. OEMs will increasingly control how and where damaged cars will get repaired.
   
2. Auto insurers, who pay for these repairs need to forge alliancEs with OEMs or risk losing control over this critical area of their business.

3. The auto insurance and aftermarket supply chain needs to adapt and transform in order to take advantage of the associated opportunities.

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Automotive manufacturers continue to drive innovation, making vehicles more complex than ever. Today’s cars are like supercomputers with ADAS, electric propulsion, autonomous features, and more.​ ​ In the last decade, the number of shops keeping up with OEM Certifications has remained stagnant. ​ ​ In our new white paper, we explore how a strong certification program benefits OEMs, collision repairers, and consumers.

Earning these certifications can: ​

• 🥇 Give a shop a competitive edge​
• 💡 Advance technician training ​
• 📈 Drive business growth​ ​ Read all the insights in our white paper.

Download it here

Tariffs Could Lead to Higher Insurance Prices for U.S. Consumers, Businesses - WSJ

Insurers are warning that tariffs could make their costs shoot up, especially those connected with auto insurance

Americans don’t import insurance from Canada, Mexico or China, but it could nonetheless get more expensive for consumers and businesses amid U.S. tariff uncertainty.

Insurers are warning that tariffs on various goods could increase the overall costs that insurers pay, which could force them to pass on the costs in the form of higher premiums. Automobiles, whose manufacture involves complex international supply chains in which components crisscross borders, could go up in cost by $3,000 each per car on average, the American Property Casualty Insurance Association, a trade group, said.

Insurers have to pay to replace or repair cars, businesses and homes, and higher prices because of inflation—whether tariff-induced or otherwise—often lead them to pass the increased costs on to consumers. Personal auto insurance is most likely to be impacted, but commercial auto and other insurance lines could be impacted as well.

“These costs could have a very negative impact on insurance consumers and insurance companies already challenged by inflation and other cost increases working their way through the system and by catastrophes,” APCIA said. “Given the significant amount of imports from Canada, Mexico and China, most lines of insurance will likely experience increased cost impacts.”

Between 55% and 65% of U.S. car parts are sourced from either Mexico, Canada or China, according to Michael Zaremski, an analyst at investment banking firm BMO Capital Markets.

The White House on Saturday announced sweeping tariffs targeting China, Mexico and Canada. Mexico and Canada have won a 30-day reprieve on their implementation after both promising certain measures to tackle border issues and fentanyl smuggling. Still, significant uncertainty about the trade measures persists.

Climate-related hikes to insurance costs have become a high-profile issue across the country. But in recent years insurers have also contended with higher costs resulting from inflation, particularly after the Covid-19 pandemic stressed supply chains.

Analysts have so far focused their attention on the tariffs’ possible impacts on auto prices and the potential spillover to insurance, but economists have warned the tariffs could be broadly inflationary. During the pandemic, supply-chain difficulties reverberated in the construction industry, driving up costs to rebuild homes and businesses.

Despite the recent pause on tariffs against Canada and Mexico, insurance prices may still increase, said Marc Busch, a professor of international business diplomacy at Georgetown University.

“Even if the cease-fire holds with Canada and Mexico, the damage has been done,” Busch said. “We are going to have tremendous uncertainty looming over the industry for the foreseeable future…If I’m an insurance company, I’m pretty dour at the moment, and certainly highly motivated to pass on my risk in the form of higher premiums to consumers.”

Trump's proposed FEMA revamp – how will it affect brokers and clients? | Insurance Business America

Could insurance fill the gap if FEMA is reformed?

Besides waging his ongoing war against illegal immigration, President Donald Trump has also recently criticized the Federal Emergency Management Agency (FEMA) for its handling of disaster relief efforts, particularly in response to Hurricane Helene in North Carolina.

During a tour of the state, he suggested that FEMA has been ineffective and proposed either overhauling or eliminating the agency, favoring direct federal funding to state governments for disaster management.

These remarks have since sparked discussions about the future of federal disaster response, with some experts expressing concern over the potential impacts of dismantling FEMA.

While some critics have argued that it could undermine coordinated national efforts in managing large-scale emergencies, some insurance brokers are cautiously optimistic, viewing the potential changes as a chance for private insurers and companies to take on a greater role in disaster recovery.

"Changes to FEMA (and the NFIP) represent opportunity for the insurance industry," said Dana Sutton, AVP, personal risk, flood practice at NFP. "It could lead people to move from the NFIP into the private market, which is an overall net good for the industry. More risk moving in the direction of the private market means lower rates and expanded coverages."

Sutton, who spoke with Insurance Business a few weeks ago to discuss the current state of flood insurance and the growing role of the private market, said that she believes a revamp is worth discussing, particularly given concerns about the agency’s slow response time.

"I would welcome a discussion about a FEMA revamp," she said. "Based on feedback from clients, the immediate response to storm events this past hurricane season was somewhat slow, so there seems to be room for improvement."

However, Sutton also argued that improvements should extend beyond just disaster response.

"I’d also love to see more resources put into flood proofing and mitigation efforts. FEMA did a study that showed for every $1 spent on mitigation efforts, it saved $6 in flood losses," she explained. "As flooding events increase in frequency and severity, flood proofing and mitigation are great courses of action, and FEMA should continue to lean into these efforts."