Tariffs/Insurance
Tariffs could add $24 billion to auto claims costs: APCIA
The Trump administration’s tariffs on Canada, China and Mexico will likely disrupt rebuilding efforts after recent catastrophes and increase the cost of auto replacement parts, adding up to $24 billion in personal auto claims costs, the American Property Casualty Insurance Association said late Tuesday.
In a statement, David A. Sampson, president and CEO of the Washington-based trade association, said the 25% tariffs on goods from Mexico and Canada and the 10% additional tariffs on goods from China that went into effect Tuesday could interrupt the supply of building materials to the United States. On Wednesday, the White House said automakers would be exempted from the tariffs for a month.
The tariffs “will likely disrupt vital reconstruction material supply-chains at a critical moment of rebuilding from recent catastrophes, including Hurricane Helene and Milton and the unprecedented California wildfires,” he said.
In addition, they will add to the cost of auto replacement parts, increasing repair costs “that are factored into auto insurance,” Mr. Sampson said.
“APCIA has estimated that annual personal auto insurance claims costs alone could rise by anywhere between $7 billion and $24 billion,” he said.
Progressive’s Margins Leave Room for Tariff Impacts: CEO
With its 2024 combined ratio falling comfortably more than 7 points below a targeted level of 96, Progressive has room to deal with the impacts of tariffs on car repair and replacement costs, the chief executive said.
But that doesn’t mean the company is not working to understand potential tariff effects, Progressive CEO Tricia Griffith said March 4 during a call to discuss fourth-quarter and full-year results.
News
Tesla offers $1100 insurance subsidy as global sales plummet
The car maker has dabbled with its own insurance – now it's offering a saving until March 17th – but not in the US
Tesla is rolling out an insurance subsidy in an effort to counter slowing global sales, as the electric vehicle manufacturer faces mounting competition and operational challenges across key markets. The U.S.-based automaker announced that buyers of its Model 3 vehicles in China will receive an 8,000 yuan ($1,101.90) insurance incentive if they make a purchase before March 17.
This move follows a sharp decline in Tesla’s sales figures in major international markets, including a steep 76% drop in Germany last month, where the brand has faced growing consumer resistance. Industry analysts have attributed Tesla’s struggles to multiple factors, including CEO Elon Musk’s controversial political endorsements, increased competition from local automakers, and operational slowdowns due to production line upgrades.
In Europe, Tesla’s year-to-date sales have fallen by 71% in Germany and 44% in France, two of the continent’s largest electric vehicle markets. Meanwhile, in the UK, Tesla saw an 11% increase in registrations in the first two months of 2025, suggesting that some markets remain resilient despite broader downward trends.
Uber calls for insurance reforms as fraud, regulations drive up costs
Uber is intensifying its campaign for insurance reform, arguing that excessive state-mandated insurance requirements are driving up costs for both drivers and riders.
The rideshare giant, already one of the largest insurance consumers in the country, has long voiced concerns over policies that it claims disproportionately impact transportation network companies (TNCs) compared to other commercial vehicles such as taxis and limousines. With ongoing legal battles over alleged insurance fraud and growing costs linked to lawsuit financing, Uber is pushing lawmakers to implement reforms that would ease the financial burden on its drivers and customers.
One of Uber’s main grievances is the significant difference in required insurance coverage for rideshare vehicles compared to personal cars and traditional taxis. In states such as California and New York, TNCs must maintain liability coverage of at least $1 million per trip – far exceeding the requirements for personal vehicles, which are often only mandated to carry around $30,000 in coverage.
These high coverage requirements result in increased operating costs for Uber, which are ultimately passed on to riders. The company estimates that in states like California and New Jersey, nearly a third of a rider’s fare goes toward state-mandated insurance costs.
Commentary/Opinion
Can Adequate Premiums and Trust Coexist?
The insurance industry has a pivotal opportunity to redefine itself. By prioritizing transparency, insurers can address premium leakage while restoring trust.
Alan Demers Stephen Applebaum
The insurance industry is at a crossroads. Consumer resentment about insurance affordability and fairness of premiums is brewing. The insurance industry is taking needed action on rates, but insurers find it difficult to inform and educate a customer base that views pricing as opaque and overly complicated.
All of this raises the question: Can adequate premiums and trustworthiness coexist?
Eroding Trust
As consumers grow increasingly skeptical, the industry faces mounting challenges. Recent lawsuits involving individuals’ driving data from connected cars and consumer apps being sold to insurers without clearly informed consent has struck a nerve. Allegations of improper home insurance cancellations based on flawed aerial imagery and related concerns of insurers “spying” on their customers have surfaced. Even more attention has been attracted by the recent reports of non-renewals for many homeowners just before the Los Angeles-area wildfires, generating a mix of angst and wake-up calls. But each of these actions is deemed necessary for carriers to ensure viability, despite the obvious criticism that the decisions lack transparency.
Concern about insurer profitability has been in the forefront as the P&C industry experienced significant underwriting losses over the last three years. Attendant rate increases and tightening underwriting practices are having the desired outcome with, at least, financial recovery in personal auto lines. However, increasing rates are a new reality as climate exposure, repair cost inflation, social inflation, and fragile supply chains persist and costs are passed on via premiums.
Premium Leakage
Premium leakage, a problem fueled by outdated and inaccurate data, continues to contribute to underwriting losses and undermine profitability. Such leakage occurs when insurers are unable to align premiums with the actual risks of their policyholders. This often stems from reliance on stale, incorrect, or incomplete data. The problem doesn’t stop there. After policy inception, specifics like garaging location, undisclosed drivers, vehicle use and mileage can become a moving target. Inaccuracies create a ripple effect—insurers lose revenue, or customers may pay more than they should.
Financial Results
Polished Gem GEICO Fuels Berkshire Hathaway Operating Gains
The work that GEICO’s CEO has done to “repolish” Berkshire Hathaway’s “long-held gem” got a special shout-out in Berkshire Chair Warren Buffett’s 2024 annual report to shareholders this weekend.
GEICO’s $4 billion-plus jump in 2024 underwriting profit (before taxes) vs. 2023, and another $5 billion boost in investment income across all of Berkshire’s insurance operations compared to 2023, explained the bulk of the conglomerate’s improvement in operating income.
Hagerty Reports Full Year 2024 Results; Provides 2025 Outlook for Revenue and Profit Growth
Hagerty, Inc. (NYSE: HGTY) an automotive enthusiast brand and leading specialty vehicle insurance provider, announced today financial results for the three and twelve months ended December 31, 2024.
- Full year 2024 Total Revenue increased 20% year-over-year to $1.200 billion
- Full year 2024 Written Premium increased 15% year-over-year to $1.044 billion
- Added a record 279,000 new members in 2024
"2024 was another excellent year at Hagerty with 20% revenue growth fueled by a record 279,000 new members. We are also investing to improve Hagerty and become more efficient in how we deliver on our brand promise to members and maintain our industry leading net promoter score of 82. These initiatives allowed us to translate revenue growth into even higher rates of profit growth, with net income up 178% and Adjusted EBITDA up 41%," said McKeel Hagerty, Chief Executive Officer and Chairman of Hagerty.
"In 2025, Hagerty's customer-centric model and automotive expertise should result in written premium growth of 13-14% and even faster rates of profit growth. Top-line growth should accelerate in the back half of 2025 as we anticipate rolling out the State Farm Classic Plus program to over 25 states in the year. Longer-term, we expect to more than double our policy count to three million by 2030," continued Mr. Hagerty.
InsurTech/M&A/Finance💰/Collaboration
CoverForce Secures $13 Million in Series A Funding Led by Insight Partners to Build Infrastructure and Connectivity Between Insurance Carriers and Agencies
CoverForce, a leading infrastructure platform for commercial insurance, today announced a $13 million Series A funding round led by global...CoverForce, a leading infrastructure platform for commercial insurance, today announced a $13 million Series A funding round led by global software investor Insight Partners with participation from Nyca Partners.
The investment will accelerate CoverForce's mission as a leading marketplace for quote-and-bind API connections, enabling seamless digital interactions between insurance carriers, agencies, and wholesalers.
Co-founded by Cyrus Karai, Behram Dinshaw, and Kaivan Wadia, CoverForce was born out of a shared vision to modernize the commercial insurance industry. With decades of combined experience in insurance and technology, the founders set out to solve the inefficiencies of legacy systems by building a unified API platform that allows customers to instantly quote, pay, bind and issue policies.
CoverForce's platform serves as a leading marketplace for quote-and-bind API connections, enabling brokers, wholesalers, and agencies to access instant quotes and one-click binding functionality. The platform integrates with national carriers like AmTrust, Chubb, Liberty Mutual, and Travelers, and covers major commercial lines of business such as Workers' Compensation, General Liability, Business Owner's Policies, and Cyber.
Flume Partners with HSB to Provide Homeowners with Advanced Water Leak Protection
Flume, a leader in smart home water leak detection, today announced an exciting new partnership with HSB to offer its advanced flow-based water leak detection service to homeowners through HSB's extensive network of insurance providers and partners.- Flume's IoT-enabled flow-based monitoring service now available through HSB's partner ecosystem
- Water leak detection system provides 24/7 protection for homeowners
- Real-time mobile alerts help prevent costly water damage
- Partnership expands Flume's reach to insurance clients across the country
Flume's Home Water Protection Service is designed to protect homes from the devastating effects of water damage, a leading cause of property loss. By using a single sensor that straps to a home's existing water meter, Flume monitors water flow in real-time, immediately detecting leaks and sending instant alerts to homeowners via a mobile app.
"We're excited to join forces with HSB, an industry leader committed to integrating the latest technologies into insurance solutions," said Eric Adler, co-founder of Flume. "Water damage claims are a major pain point for homeowners and insurers alike, and our partnership will allow us to reduce these claims by offering smart, simple, and proactive water leak protection. With our IoT-powered sensor technology, homeowners will have peace-of-mind, knowing that they're protected from the hidden threat of water damage."
AI in Insurance
Charlee.ai Unveils Charlee Agentic Artificial Intelligence (AI) Library
Charlee.ai, a leader in AI-driven insurance technology, proudly announces the launch of the Charlee Agentic AI Library, a cutting-edge suite of task-specific AI agents designed to transform the way insurance claims are processed and analyzed.
Built on a combination of Charlee's pre-trained domain-specific language models, task-optimized language models, and patented Natural Language Processing (NLP) technology. Charlee Agentic AI agents focus, reason, and solve insurance-specific tasks with unparalleled precision.
The Charlee Agentic AI Library introduces the first seven specialized use cases that streamline and enhance claims processing:
- Claims Reserves Adequacy Agent – Evaluates reserve adequacy to mitigate financial risks.
- Claims Document Agent – Extracts and categorizes critical information from claims documents.
- Claims Summarization Agent – Generates concise, actionable summaries of complex claims.
- Claims Alerts Agent – Provides proactive alerts based on critical claims insights.
- Claims Email Agent – Automates and prioritizes claims-related emails, ensuring timely and efficient responses.
- Claims Historic Trends Agent – Identifies and analyzes historical patterns in claims.
- Claims Prior Strategy Agent – Assesses past claims strategies to optimize decision-making.
“Charlee Agentic AI is a game-changer in claims processing,” said Sri Ramaswamy, CEO & Founder at Charlee.ai. “Our AI agents leverage Charlee’s patented NLP technology to reduce domain noise and extract key claim-specific attributes with pinpoint accuracy. By integrating our pre-trained insurance domain-specific Large Language Model (LLM), our AI agents truly understand claims language and prioritize the most relevant insights.”
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