Climate/Resilience/Sustainability
[Ed. Note: HIGHLY RECOMMENDED] "A Bold Reimagination of Insurance Markets: Why It's Needed and How to Get There" - InnSure
Today, InnSure is proud to release our comprehensive white paper, "A Bold Reimagination of Insurance Markets: Why It's Needed and How to Get There."
As climate risks escalate and protection gaps grow, our traditional risk financing systems are struggling to meet society's needs. This white paper presents a critical analysis of current market failures and, more importantly, charts a bold path forward through cross-sector innovation and collaboration.
Key insights from the paper include:
- Why existing insurance and risk financing models are becoming increasingly misaligned with emerging risks
- How siloed approaches between public and private sectors are creating critical protection gaps
- A framework for reimagining insurance markets through community up innovation focused pilots and demonstration projects that integrate both physical and financial resilience adaptations
- The urgent need for catalytic capital to drive innovation, particularly in establishing Community Development Reinsurance Institutions (CDRIs) – building on the successful model of CDFIs in the lending space
Charlie Sidoti, InnSure Corporation
Los Angeles Wildfires
Farmers Exchanges expect $600 million in losses from California wildfires
Company reaffirms its commitment to expanding coverage options in the state
The Farmers Exchanges, which include Farmers Insurance Exchange, Fire Insurance Exchange and Truck Insurance Exchange, have reported initial loss estimates of about $600 million from the California wildfires, according to a report from AM Best.
These losses are net of the per occurrence reinsurance program and gross of tax, excluding the Farmers share of FAIR Plan losses and around $250 million in reinstatement premium payments.
In a statement, Farmers Exchanges said that its approach to managing its coverage portfolio in the state, its strong capital base and its comprehensive reinsurance program allowed it to effectively manage potential losses from this event.
“With deep roots in Southern California, the Farmers Exchanges remain dedicated to supporting the recovery process for all their customers, employees, and communities impacted by the devastating fires,” the company said. “The Exchanges also want to reaffirm their previously announced commitment to expand coverage options in California.”
Predict & Prevent
Leak Detection Devices Can Reduce Average Claim Costs by $4K
Nationwide Insurance Co. has partnered with Resideo, a leading home technology company, to analyze the role Resideo’s Honeywell Home and First Alert devices played in loss prevention for their customers. The study found both a frequency and severity reduction for customers who had at least one Resideo device installed. In fact, these customers yielded a reduction in average claim costs of $4000.
Data collected between 2018 to 2022 reveals that about one in every 60 homeowners annually files an insurance claim related to non-weather-related water-damage or freezing pipes at the average cost of $13,954. All told, water leak damage is a multi-billion-dollar problem for US property insurers.
Research shows that 93% of water leaks can be lessened or minimized if an automatic water leak detection and shut-off system had been present in the home. Installing water leak detectors—ideally connected to a water shutoff valve—in the home can help prevent detrimental water damage, but simply having leak detectors by themselves can be a benefit.
Insurers See the Value
“Insurers that specialize in high value properties have required flow-based leak detection on a small portion of homes for well over a decade,” says Ian Greene, Marketing Director for FloLogic, a manufacturer of leak detection and automatic shut-off devices. “Today, the bar is much lower for the risk profiles that prompt a leak detection requirement—homes that aren’t typically occupied, have a minimal replacement value, or have any history of leaks, will require a device.”
More mass-market insurers are recommending and even requiring leak detection as a condition of coverage. Some insurers offer premium discounts for having leak detection, while some insurers simply make leak detection a requirement without any discounts.
The increased level of catastrophic property loss events—including wildfires and mass storms—has created a challenging insurance market. Catastrophic events are difficult to predict or prevent, but non-weather water damage (the second leading cause of insurance claims) is quite preventable thanks to leak detection technology.
Resideo has been added to USAA's PERKS program to help its members protect against water damage and optimize home efficiency. USAA members can purchase Resideo's Honeywell Home smart thermostat and its First Alert® WiFi Water Leak & Freeze Detector at a discounted price through the PERKS program and eligible Homeowner policy holders can enroll those devices for a connected home discount. Additionally, Nationwide is helping to offset the cost of smart home solution purchases and installation.
Financial Results
US P&C industry results improve in 2024 despite $2.6bn underwriting loss: AM Best - Reinsurance News
The US property and casualty (P&C) insurance industry saw a significant improvement in its 2024 results, with momentum expected to continue into 2025, despite an estimated net underwriting loss of $2.6 billion in 2024, according to a recent AM Best report.
AM Best attributes part of this progress to higher interest rates, which have fueled stronger investment yields for insurers, helping offset weather-related losses.
The report noted that in 2023, the US P&C insurance industry recorded an underwriting loss of $24.6 million, offset by net investment income of $72.4 billion.
While underwriting losses eased in 2024, AM Best estimates the industry’s collective net investment income grew to $85.4 billion and is expected to reach $100.8 billion in 2025.
Commercial lines underwriting results benefited from positive rate momentum across most business lines, while personal lines improved due to pricing, claims-handling initiatives, and better risk selection.
In 2024, the personal auto and homeowners lines ended the year with an estimated combined ratio of 101%, an improvement from 2023, when personal lines posted a ratio above 107%.
Greg Williams, Managing Director at AM Best, said, “On a net basis, both the homeowners multiperil and private passenger auto businesses generated more favorable loss ratios through year end, reflecting the aggressive push for rate adequacy among primary personal lines insurers since early 2022.”
Zurich posts operating profit just above forecasts
Zurich Insurance Thursday reported slightly higher-than-expected annual operating profit.
Europe’s fifth-largest insurer reported operating profit of $7.8 billion for 2024, just ahead of analysts’ estimate of $7.7 billion in a company-provided consensus.
The closeness with consensus is “perhaps the clearest indication that the group has become reassuringly reliable,” Jefferies analysts wrote in a note.
Zurich said that the fires in California, which destroyed thousands of homes and killed dozens of people, heightening concerns for insurers, are estimated to have a pre-tax impact of $200 million including its Farmers business.
“It is definitely not too much,” CEO Mario Greco said about the impact in a call after the results were released.
“However, we are not insuring private homes in California as Zurich. This is what Farmers does. So, we have exposure only to some commercial businesses there,” he said. Zurich does not own Farmers business but it manages it and receives fees from it.
[MORE]9https://www.businessinsurance.com/zurich-posts-operating-profit-just-above-forecasts-assesses-wildfires-impact/)
Protection Gaps
Middle-Market Businesses Face Risk Protection Gaps
Nearly half of middle-market businesses feel vulnerable to key threats facing their operations despite implementing various risk management strategies, with only 54% feeling highly protected against business risks, according to Nationwide’s latest Agency Forward survey.
“Despite nearly 90% of businesses having formal risk management policies that are regularly reviewed, a critical vulnerability remains: one in five businesses lack a business continuity plan. This gap leaves them exposed to potential disruptions that could severely impact their operations,” said Mark McGhiey, Nationwide’s leader of Commercial Lines Risk Management.
For middle-market respondents, the top business risks over the next two years were costs/finances (42%), economic/regulatory factors (40%) and technological disruption (26%).
Asked to identify their top risk management priorities, middle-market companies ranked economic downturns (43%), supply chain disruptions (42%), cybersecurity (42%) and regulatory changes (42%). Natural disasters were cited as a risk management priority by only 5% of middle-market business owners.
InsurTech/M&A/Finance💰/Collaboration
Waterdrop Partners with DeepSeek to Revolutionize Insurance Services with AI-Powered Experts
Waterdrop Inc. ("Waterdrop" or the "Company") (NYSE: WDH), a leading technology platform specializing in insurance and healthcare services with a positive social impact, announced its strategic integration of DeepSeek, marking a significant step forward in its AI-driven insurance ecosystem. The collaboration is poised to accelerate the Company's business growth, enabling innovative breakthroughs in the application of large-scale AI models across specialized insurance scenarios.
By transforming traditional insurance agents into expert consultants, Waterdrop aims to enhance service precision and efficiency. The integration is also expected to lead to the development of intelligent solutions across sales support, quality assurance, risk management, and product innovation, driving a transformative leap in the efficiency of the entire insurance service chain.
"Since its establishment, Waterdrop has been dedicated to leveraging internet technology to promote inclusive insurance and drive the sustainable development of the industry through innovative, productivity-enhancing solutions. The Company is focused on improving the efficiency of the entire insurance service chain," Shen Peng, founder and CEO of Waterdrop, emphasized the unprecedented opportunities presented by AI industrialization.
"As part of its technology-driven strategy, Waterdrop is actively exploring the deep integration of large-scale AI models into insurance service scenarios, accelerating innovation in product offerings, and continuously refining its solutions to meet the diverse needs of users," Shen added. "By doing so, Waterdrop aims to empower individuals with access to better healthcare services at more affordable costs, further underscoring its mission to make quality insurance accessible to all."
COVU Expands Series A Financing to $22 Million to Advance AI-Powered Insurance Solutions
AI-driven insurtech company COVU has increased its Series A financing to $22 million, aiming to scale its artificial intelligence capabilities and expand its market presence.
The latest funding round was led by Benhamou Global Ventures, which had also spearheaded COVU’s initial Series A raise. True Global Ventures joined as a new investor in this round. This builds on COVU’s previous $12.5 million Series A announced last year.
With the additional capital, COVU plans to enhance its AI-native roll-up and marketplace business, strengthen automation capabilities, and deepen partnerships across the insurance ecosystem. Initially structured as “milestone-based financing,” the round was expanded to $10 million and ultimately oversubscribed, bringing the company’s total funding to $32 million.
Beyond equity financing, COVU has also secured access to venture debt and is targeting an additional $30 million in debt financing to further bolster its platform.
The company has reported a three- to fourfold growth over the past year, driven by the introduction of its AI-powered solutions. Notably, one in three customer cases is now resolved without human intervention.
“We believe the future of insurance lies in the collaboration between AI and human expertise,” said COVU CEO and co-founder Ali Safavi. “Insurance is not just about transactions—it is about trust, protection, and high-quality service. AI enhances efficiency, but licensed professionals provide the expertise and relationships that clients rely on. This funding allows us to scale our mission of delivering seamless, AI-powered insurance servicing that empowers agencies rather than displacing them.”
Navierre and Swiss Re Partner to Tackle Rising Mortality
Navierre (Montvale, N.J.), a pioneering longevity platform, and Swiss Re (Zurich), the global reinsurer, have announced a strategic partnership to empower longer, healthier lives.
“When we first set out to create Navierre, we recognized that the U.S. healthcare system was fundamentally flawed—Americans are dying younger than their peers globally, despite higher healthcare spending,” said Mustafa Dinani, CEO, Navierre. “Our platform isn’t just another wellness app; it’s a comprehensive solution tackling the root causes of rising mortality, going beyond lifestyle to make healthcare more efficient and effective for individuals.”
The Navierre platform is designed to empower policyholders to take control of their health and navigate the complex healthcare system with greater ease. By centralizing health information—including medical records and wearable data—Navierre aims to simplify access to personal health information and coordination with providers, while proactively identifying health risks and engaging policyholders with personalized insights and guidance at every stage of life. Policyholders can conveniently schedule appointments with healthcare providers across the country and for all insurance types, stay proactive with preventive care, and benefit from Navierre’s extensive ecosystem of partners to achieve better health outcomes.
Recommended Events
ClimateTech Connect
ClimateTech Connect April 15-16, 2025 | Ronald Reagan Building and International Trade Center |Washington, DC
ClimateTech Connect is the premier global conference and tradeshow for leaders advancing innovation in climate adaptation, resilience, and profitable sustainability through technology.
ClimateTech Connect brings together thought leaders, innovators, policymakers, and leading industry experts to explore the intersection of climate resilience strategies and technology. We are expecting 1500 attendees from the following industry sectors:
- Insurance and Financial Services
- Corporates
- Investors
- Government
- Start-ups and Scale-Ups
Join us for two days of inspiring keynotes, panel discussions, workshops, an electrifying expo hall + demo stage, and networking as we delve into the latest advancements and solutions in climate resilience.
Together, we will shape a more sustainable future.
InsurTech Consulting and our 'Connected’ newsletter are proud media partners of ClimateTech Connect with a special 20% discount for our subscribers”. Use code:Connected20, register HERE
Research
Commercial insurance rate hikes up slightly in Q4: CIAB
Commercial insurance premiums increased 5.4% on average in the fourth quarter of 2024, up slightly from 5.1% in the third quarter, according to the latest pricing report from the Council of Insurance Agents & Brokers released Wednesday.
Commercial auto saw higher increases in the quarter, rising to 8.9% from 8.5% in the prior quarter; umbrella liability rates were up 8.7% from 8.6%; and general liability rates rose to 5.3% from 4.8% in the prior quarter.
Commercial property rose 6%, compared with 7.9%; workers compensation rates declined 1.8%, compared with a 1.4% drop.
Among various specialty lines, directors and officers liability rates fell 1.5%, compared with a 1.9% decrease in the third quarter; cyber liability rates were down 1.8%, compared with a 1.5% decline; employment practices liability rates declined 0.2%, compared with a 0.3% increase; and medical malpractice rates rose 1.9%, compared with a 1.6% increase.
By account size, medium-sized accounts saw 6.4% increases, compared with 5.6%; large accounts were up 6.3%, compared with 5.3%; and small accounts were up 3.6%, compared with 4.4%.
Data Privacy/Cyber Security
AiDEN Auto Closes Oversubscribed Seed Round, Bringing Total Funding to $6.1M | Business Wire
*Bay Area Startup Puts Data Privacy First While Helping OEMs Scale In-Vehicle Service Offerings to Drive Additional Revenue Streams
AiDEN Auto, a leader in privacy-first connected vehicle technology, today announced the successful close of its $4.2 million oversubscribed Seed funding round, bringing its total funding to date to $6.1 million.
“The key to unlocking the promise of connected vehicles is to deliver the multitude of services that users want and expect, with the driver’s full knowledge and consent, in the moment that the driver wants them”
AiDEN’s Seed Round was led by Nuri Venture Partners, and additional investors included Tengro Ventures, Band of Angels, Mentors Fund, Start Equity Ventures, Conxcity and Weltham Capital as well a distinguished group of veteran angel investors and family offices. AiDEN’s angel round received participation from IF Insurance as well as a number of Silicon Valley angel investors.
“We are proud to double down on our support for AiDEN Auto as they lead a transformative shift in connected vehicle technology,” said Kevin Yang, Managing Partner at Nuri Venture Partners. “Unlike others who have struggled to balance innovation with privacy, AiDEN is proving that it can be done—and done at scale. Their unwavering commitment to consumer data privacy, consent management, and transparency isn’t just unique; it’s exactly what the industry needs. We have no doubt that AiDEN will succeed where others have failed, setting a new standard for ethical and consumer-centric data sharing in the automotive space.”