Inflation alone will increase P&C claims costs by between 5% and 7.5% - Swiss Re  March 22nd 2023

P&C claims growth to ease as inflation moderates: Swiss Re

Analysts at Swiss Re have warned of continued claims severity pressures for property and casualty (P&C) re/insurers over the coming year, although the firm says that claims growth will ease slightly alongside a moderation in inflation.

Swiss Re expects headline inflation to decline but stay elevated in 2023, to some extent alleviating upward pressure on claims compared to 2022.

However, it adds that cost inflation in certain prices, such as labour and healthcare, may remain high, with motor and liability also set for continued pressure as additional factors like social inflation and more frequent traffic accidents underpin claims.

“This environment will require P&C insurers to consider continuing underwriting discipline in 2023,” Swiss Re concluded in a new report on the claims environment.

AI Speeds Insurance Claims Estimates for Better Policyholder Experiences

Drivers can get auto repair estimates in seconds instead of days with AI-driven insurance applications from CCC Intelligent Solutions with an assist from NVIDIA DGX Cloud and Base Command Platform.

CCC Intelligent Solutions (CCC) CCC has become the first company in the auto insurance industry to deliver an AI-powered repair estimating solution, called CCC Estimate – STP, short for straight-through processing.

The Chicago-based auto-claims technology powerhouse uses AI, insurer-driven rules and CCC’s vast ecosystem to deliver repair estimates in seconds, instead of days. It’s a technological feat considering there are thousands of vehicle makes and models on the road, and countless repair permutations.

The company’s commitment to AI spans many years, with its first AI solutions hitting the market more than five years ago. Today, it’s working to bring AI and intelligent experiences to key facets of claims and mobility for its 30,000 customers, who process more than 16 million claims annually using CCC solutions.

“Our data scientists play a crucial role in creating new solutions and the ability to build models, experiment and easily integrate the model into our AI workflows is key,” said Reza Rooholamini, chief scientific officer at CCC.

CCC has four decades of expertise in automotive claims and collects millions of unstructured and structured automotive-claim data points every year. The combination of industry experience and raw data, however, is just the starting point for CCC’s efforts. The company runs a 100% cloud production environment, providing customers with a flexible platform for continuous innovation.

As a market leader, CCC regularly reports AI adoption among its customers to track progress. According to its 2023 AI Adoption report, the company reported that more than 14 million unique claims have been processed using CCC’s computer vision AI through 2022. The company also saw a 60% year-over-year increase in the application of advanced AI for claims processing.

Amwins CEO: banking turmoil could reverse softening insurance markets

The Silicon Valley Bank (SVB) collapse is increasing awareness of risks in the financial system and could reverse some of the softening in insurance markets this year, according to Amwins CEO Scott Purviance.

“When you’re allocating capital and taking risk as an insurance company, there are things that you’re not contemplating,” Purviance told Insurance Business.

“I think we’re seeing that risk is going to be much more in focus as this year goes by, and that likely means some of the lines of business that were softening are going to potentially at least be flat if not up in 2023.”

Following the downfall, a securities class-action lawsuit has been filed against SVB’s parent, SVB Financial Group, and its CEO and CFO – the first of potentially many legal actions taken against the bank’s executives.

If the Federal Reserve had not intervened, insurers would potentially have looked at enormous directors and officers (D&O) liability claims, according to a report by AM Best.

NICB PRESIDENT AND SAN DIEGO COUNTY DISTRICT ATTORNEY DISCUSS CURRENT CRIME TRENDS, JOINT EFFORTS TO FIGHT FRAUD

The National Insurance Crime Bureau (NICB), the insurance industry's association dedicated to predicting, preventing, and prosecuting insurance crime, continues to focus on strengthening its longstanding relationship with the San Diego County District Attorney's Office to enhance investigative efforts in the county.

NICB President and CEO David J. Glawe and San Diego County District Attorney Summer Stephan met at the Insurance Fraud Management (IFM) Conference in Carlsbad on Monday to discuss current insurance fraud and crime trends plaguing San Diego County and how similar trends are impacting the United States. Additionally, they talked about their continued partnership and future collaborations as they work to investigate and prosecute offenders.

"I have tremendous respect for District Attorney Stephan, and NICB is grateful for our partnership with her office," said NICB President and CEO David J. Glawe. "One of NICB's core strengths is our ability to maintain robust relationships, which is why NICB is proud to be working hand in hand with District Attorney Stephan and the men and women at the San Diego District Attorney's Office."

"We remain committed to working in collaboration with NICB to prevent and prosecute criminals who perpetrate insurance fraud, one of the top fraud schemes in the U.S.," said San Diego County District Attorney Summer Stephan. "San Diego County is known for obtaining justice through its unique partnership with law enforcement agencies and organizations dedicated to preventing crime and supporting victims."

States Pressure Hyundai, Kia to Do More to Tackle Theft Risk

A group of 22 U.S. state attorneys general on Monday blasted Hyundai Motor and Kia Corp. and said they need do more to address problems with millions of U.S. vehicles that are prone to theft.

Last month, the Korean automakers said they would offer software upgrades to 8.3 million U.S. vehicles to help curb increasing car thefts using a method popularized on TikTok and other social media channels.

“The surge in thefts of these vulnerable vehicles has been truly shocking,” said the letter from 22 states and the District of Columbia led by Wisconsin Attorney General Joshua Kaul. “More needs to be done so that every current owner can obtain one of these devices at no cost as soon as possible – especially those owners whose cars are not compatible with the software upgrade you recently announced.”

Trade Groups Ask NAIC for a Toned-Down Revised Privacy Model Act

Insurance trade groups asked members of the National Association of Insurance Commissioners to tone down some of the sections in a proposed revision of its Privacy Model Act as the NAIC’s Spring Meeting got underway in Louisville, Kentucky.

“The draft really goes significantly far,” said Wes Bissett, senior counsel for the Independent Insurance Agents and Brokers of America. “It would dramatically restructure the privacy framework in a way that would really uniquely… apply to only one sector of the business world. We don’t believe such dramatic changes are needed in the insurance code.”

Bissett said among the group’s concerns are burdensome notice requirements and mandates that third parties adhere to the same contract between the agent and the consumer. That, he said, could put agents in a position of trying to compel a large insurance company to follow his requirements.

“It opens up Pandora’s Box,” he said.

“The draft really goes significantly far,” said Wes Bissett, senior counsel for the Independent Insurance Agents and Brokers of America. “It would dramatically restructure the privacy framework in a way that would really uniquely… apply to only one sector of the business world. We don’t believe such dramatic changes are needed in the insurance code.”

Bissett said among the group’s concerns are burdensome notice requirements and mandates that third parties adhere to the same contract between the agent and the consumer. That, he said, could put agents in a position of trying to compel a large insurance company to follow his requirements.

“It opens up Pandora’s Box,” he said.

Colorado lawmakers propose bill to curb underinsurance

Two Colorado state representatives have proposed a bill aimed at curbing underinsurance in response to widespread problems Marshall Fire victims experienced covering the cost of rebuilding their homes.

The December 2021 Marshall Fire near Boulder become the most destructive in the state’s history. Two lives and nearly 1,100 structures were lost as a result of the event. More than 1,000 pet also perished in the blaze, which is suspected to have had two ignition points; one in a private shed and another inside an abandoned underground coal mine. The fire burned more than 6,000 acres, according to news reports, and caused more than $500 million worth of damage.

In the time since the event, several homeowners found that their property insurance was insufficient to rebuild their homes or businesses. Now that more than a year has passed, homeowners also have exceeded their additional living expenses coverage, spurring state leaders to respond.