News
Top capacity trends shaping the reinsurance market in 2025
CEO sheds light on cycle management, geographic expansion and market competition
In conversation with ReInsurance Business, Paul Jewell (pictured), CEO at Bridgehaven - the UK’s first hybrid fronting company – shone a spotlight on some of the key capacity trends shaping the re/insurance market in the early days of 2025.
“There’s a lot of talk at the moment about the market cycle,” he said. “You hear a lot of noise and most of it comes out of the cat market in the US. To some extent, that seems to dictate the noise in the UK MGA market.
“But I think that’s a bit unfair. I think our MGA partners have opportunity in whatever cycle we’re talking about. Cycle management – or managing profitability through the cycle – is important for capacity, for profitability, for reinsurers. But actually, I think MGAs are well placed to do that because they have such a deep understanding of their customers.”
Growing through the cycle
For most MGAs, he said, their place in the market is founded on a concrete basis – be that their knowledge of their customers, their service, their product offering, their chosen methodology, their technology delivery – or some combination of those factors. The reality is that MGAs are close to policyholders, and so they are in tune with them. What is becoming clearer is that this is actually a much more effective way not just of retaining high-quality customers but also identifying new ones.
New York regulator slams auto insurers with $20 million in fines
Hanover, WR Berkley, CNA, Starr, Munich Re, many others all hit with massive bill, consent orders
New York regulator slams auto insurers with $20 million in fines
The CFPB may be on its way out, but some states are finding plenty of opportunities to take insurer’s money on their own. New York regulators have announced that they have concluded a lengthy investigation into car insurance providers for failing to submit timely reports on insured vehicles, imposing fines totaling a whopping $20.4 million.
The New York State Department of Financial Services (NYDFS) announced the resolution of the probe revealing that multiple insurance companies were penalized for not providing vehicle coverage details to the state’s Department of Motor Vehicles (DMV) within the required timeframe.
“Accurate and timely reporting by insurers is critical to protecting New Yorkers on the road, ensuring compliance with state laws, and maintaining the integrity of our enforcement systems,” stated NYDFS Superintendent Adrienne Harris. “These actions demonstrate DFS’s unwavering commitment to holding insurers accountable and safeguarding consumers.”
Financial Results
Berkshire Hathaway Borrows From Elon Musk Playbook in Geico Turnaround - Barron's
Berkshire Hathaway Todd Combs appears to have borrowed from Elon Musk’s cost-cutting playbook in his turnaround efforts at auto insurer Geico, which had record underwriting profits in 2024.
Berkshire’s Geico unit, the No. 3 auto insurer in the U.S. behind State Farm and Progressive, has cut its head count by over 30% since the end of 2021 to about 28,000 employees, according to Berkshire’s annual report released Saturday. Over that span, it slashed its annual operating expenses by 24% to $4.1 billion based on 2024 figures in the annual. Revenues are up 13% in that period.
Musk made even deeper cuts at Twitter, now X, after buying the company in 2022, and X now is more profitable than it was when Musk bought it despite lower revenues, according to published reports. Musk is now trying to slash federal government spending with his (Department of Government Efficiency) DOGE project under President Donald Trump.
Combs, who has managed part of Berkshire’s $300 billion equity portfolio for more than a decade, was tapped by Berkshire CEO Warren Buffett to run Geico at the end of 2019.
Buffett said at the time that Combs wouldn’t be there long but the job proved more extensive than initially imagined due in part to Geico’s antiquated technology that was hindering it competitiveness relative to the auto insurance industry’s tech leader, Progressive.
Berkshire Hathaway's re/insurance underwriting gain rises to $9bn in 2024 as firm pegs LA wildfire loss at $1.3bn
Berkshire Hathaway, the Warren Buffett-run holding company and conglomerate, has reported a 66% year-on-year rise in net underwriting earnings for its insurance and reinsurance businesses in 2024 to $9.02 billion.
2024 was another strong year for Berkshire’s re/insurance operations as the underwriting performance of its Berkshire Hathaway Reinsurance Group and GEICO more than offset a decrease in the primary insurance segment.
The improved underwriting result comes despite estimated claims from Hurricanes Helene and Milton of $1.2 billion across the firm’s re/insurance businesses.
Berkshire’s Q1 2025 results will include losses related to the January wildfires in Los Angeles, but the firm has revealed today that it currently estimates that its insurance group could incur pre-tax losses of approximately $1.3 billion from the event.
Turning to the 2024 results, the company’s reinsurance arm delivered net underwriting earnings of $2.7 billion in 2024, up from the prior year’s $1.9 billion, driven by a 9% year-on-year improvement in the property and casualty (P&C) result to $3.8 billion, partially offset by a decline to $223 million in life and health.
Lemonade’s gross profit surges 90% as net loss narrows for 2024 - Reinsurance News
Lemonade, a technology-driven insurance company offering home, renters, pet, and auto coverage, saw its gross profit surge 90% year over year in the fourth quarter of 2024, reaching $64 million.
This reflects a significant improvement in its financial performance. However, the company still reported a net loss of $30 million for the quarter, though this was an improvement from the $42.4 million loss in Q4 of the previous year, driven by growth spend.
Lemonade’s underwriting precision and operational efficiency contributed to a significant improvement in its gross loss ratio, which dropped to 63% in Q4 2024 from 77% the previous year.
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InsurTech/M&A/Finance💰/Collaboration
NormanMax to Acquire FloodFlash in Strategic Expansion Move
The deal will see FloodFlash continue to operate as a managing general agent (MGA) and Lloyd’s coverholder, ensuring its innovative parametric flood insurance product remains accessible to distributors and customers in the US, UK, and other markets.
The acquisition marks a significant step for both companies, aligning FloodFlash’s cutting-edge parametric technology with NormanMax’s expertise in the sector.
Adam Rimmer, CEO and co-founder of FloodFlash, expressed enthusiasm for the deal. “We are thrilled to join forces with NormanMax and collaborate with Brad and his team. This partnership was an easy decision—combining a world-first parametric product with the first parametric Lloyd’s syndicate creates powerful growth opportunities. It strengthens our relationships with brokers and customers in the US and UK, accelerates our expansion into new territories and perils, and furthers our mission of helping more people recover from catastrophe using parametric insurance.”
NormanMax CEO Brad Meier echoed this sentiment, emphasizing the value FloodFlash brings to the company’s portfolio. “NormanMax is excited to acquire FloodFlash, a company that has revolutionized parametric flood insurance through its innovative sensor technology. Providing cutting-edge insurance solutions is central to our mission, and this acquisition enhances our ability to protect customers from one of the most common natural disasters worldwide. We look forward to working with Adam, Ian, and the FloodFlash team to drive the next phase of growth.”
Research
AAA Reports Fear of Self-Driving Vehicles Persists - CollisionWeek
Drivers say they want better vehicle safety systems over self-driving cars.
According to AAA’s latest survey on autonomous vehicles, 13% of U.S. drivers would trust riding in self-driving vehicles – an increase from last year, when this number was 9%. Despite this slight increase, 6 in 10 U.S. drivers still report being afraid to ride in a self-driving vehicle. For drivers, enhancing vehicle safety systems remains a priority over the development of self-driving, with interest among drivers decreasing from 18% in 2022 to 13% this year.
Announcements
Zurich to beef up middle-market business with underwriter hires - Business Insurance
Zurich North America said Tuesday it plans to add over 100 underwriting roles as it expands its U.S. middle-market business to additional geographies.
Zurich’s U.S. middle-market business is looking to hire or place underwriters in all regions, including the South, West, Midwest and the East, the Schaumburg, Illinois-based insurer said in a statement.
“Middle-market businesses are a growing force in the U.S. economy, and they aren’t concentrated in just a handful of the largest cities. We want to meet these businesses and their brokers where they are,” Alex Wells, head of U.S. middle market for Zurich North America, said in a statement.
Zurich’s middle-market business in the U.S. has seen double-digit growth since it was established as a separate business unit in 2020, according to the statement. It provides property/casualty, financial lines and specialty coverages to midsize businesses in construction, technology, manufacturing, life sciences, financial and professional services and other sectors.
New Aflac Accident policy offers holistic benefits to help policyholders fully recover
Recognizing that accidents can happen anytime, anywhere and to anyone, Aflac Incorporated, a leading provider of supplemental health insurance in the U.S., announced today the launch of its latest individual Aflac Accident Insurance product to help provide financial peace of mind when facing a covered accident.
The new Aflac Accident Insurance plan provides policyholders with cash benefits* after a covered accident, including health services such as ambulance, ER, urgent care, physical therapy, mental health therapy and more. The product is available in 32 states and provides a variety of coverage types that appeal to consumers in all life stages. A primary feature of the new product is how it nearly doubles coverage for follow-up care treatments, including broadening treatment care to include mental health benefits when an accident occurs. The enhancements also provide increased preventive care, designed to promote overall health and wellness.
Besides the physical pain, the financial impact from treating accidents can be just as hurtful and costly. The 2025 Aflac WorkForces Report shows that 51% of American employees could not pay $1,000 out-of-pocket in the event of an unexpected illness or injury. Nearly 22% said they could not cover $500. Aflac's new Accident Insurance plan is designed to help consumers and their families become better prepared to address many of the everyday expenses that health insurance doesn't cover when an accident occurs.
People
CCC Intelligent Solutions Hires Tim Welsh to Accelerate Digital Transformation of Insurance and Collision Repair Industries | Business Wire
Welsh Joins CCC as President Following Tenured Careers at McKinsey & Company and U.S. Bank
CCC Intelligent Solutions Inc. (CCC), a leading cloud platform provider to the insurance economy, strengthens its executive team with the appointment of *Tim Welsh as President. Welsh will lead all market-facing functions to help customers accelerate their digital transformation journeys. Welsh joins CCC most recently from **U.S. Bank, where he helped lead the digital transformation of the $10 billion consumer and small-business banking business. Welsh spent much of his career at McKinsey & Company working with P&C and Life insurers and their broader ecosystems to drive strategic and operational performance.
“As the industry navigates growing complexity, our customers are embracing AI and digital technologies to re-orient their operations to support their next generation of growth,” said Githesh Ramamurthy, chairman and CEO of CCC. “Tim’s extensive expertise across the insurance economy and in digital transformation will help our customers accelerate their journeys with confidence. He comes with a deep working knowledge of the broader industry that will enable him to make an immediate impact on our repair, insurance, and auto manufacturing customers. We’re thrilled to welcome Tim to the CCC team.”
Welsh most recently served as Vice Chair, Consumer and Business Banking, at U.S. Bank. He spent more than 26 years at McKinsey & Company, where he was a Senior Partner and was elected to McKinsey’s Shareholders Council (the firm’s Board of Directors). He also led the firm’s Global Learning and Development effort
Los Angeles Wildfires
State Farm to retain $212m of $7.6bn LA wildfire loss after reinsurance - Reinsurance News
State Farm General has estimated direct losses from the Los Angeles wildfires at $7.6 billion, with retained losses after reinsurance at $212 million and its share of FAIR Plan losses at $400 million.
According to its latest update, State Farm General has paid out $1.75 billion on approximately 9,500 claims filed due to the wildfires.
As mentioned, the current estimate of direct losses from the fires stands at $7.6 billion, accounting for both reported and not reported claims. State Farm General’s retained losses after reinsurance, and its share of total FAIR Plan losses, are approximately $212 million and $400 million, respectively.
“Based on these estimates, and after accounting for reinsurance recoveries, tax impacts and partial recoupment of State Farm General’s allocation of the FAIR Plan’s recent $1 billion assessment, the January fires will reduce State Farm General’s surplus, which stood at $1.04 billion at the end of 2024 after a decline of over $300 million from year-end 2023, by approximately $400 million,” State farm explained.
Brokers and agents navigate "chaotic" aftermath of Los Angeles wildfires
Nearly two months after destructive wildfires broke out in the Pacific Palisades, Altadena, and Los Angeles and Ventura counties, brokers in California said many claims have been paid out but that the “chaotic” and “confusing” aftermath of the disaster was incredibly challenging for policyholders.
Industry professionals told Insurance Business the claims process was fraught with delays, inconsistent communication, and policyholders realizing too late that their coverage was inadequate.
“The Commissioner's Office is trying to show accountability with tracking software for claims and payouts, which is helpful, but the past three weeks have been absolute chaos—very reactive rather than proactive,” said Joshua Morey (pictured on right), president of The Morey Insurance Company, an insurance agency with offices in downtown Los Angeles and San Jose.
“Instead of asking, 'What should we be doing after this tragedy?' they’re responding to complaints as they arise.”
Today
Berkshire Hathaway Class A Stock Tops $750,000 for the First Time Ever
Berkshire Hathaway's Class A shares surpassed $750,000 after a strong earnings report this week. The company's market value reached $1.1 trillion, making it the seventh largest company in the S&P 500.