News
USAA hit with $114 Million decision over bad faith
A Nevada jury has dealt a severe blow to USAA, awarding $100 million in punitive damages and $14 million in compensatory damages to policyholder Timothy Kuhn in a bad faith insurance case. The verdict stems from USAA’s handling of Kuhn’s claim following a 2018 rear-end collision, where the insurer initially determined he was not at fault but later argued in litigation that he was responsible,
The case revolved around a highway collision in which Kuhn’s BMW sedan was rear-ended by a Ford F-150 pickup truck traveling at 45 miles per hour. Initially, USAA acknowledged that the other driver was fully at fault. However, when Kuhn sought damages for injuries – including what he described as symptoms of traumatic brain injury – USAA intervened in his lawsuit against the at-fault driver and unexpectedly argued that Kuhn was partially responsible for the crash.
AI in Insurance
Lemonade Embraced AI in Claims From Inception, And Is Still Eying The Next Tech
This article is part of an on-going series about technological and AI-related developments and advancements in claims processes and claims departments.
The use of artificial intelligence has been significantly booming over the last few years in the insurance world, but for the people at Lemonade, artificial intelligence has been a mainstay in automating claims and processes since its inception in 2015.
Sean Burgess is the chief claims officer of Lemonade, a role steeped in new technology and innovations.
Charlee.ai Celebrates Groundbreaking Innovations with Multiple Patents Issued
Charlee.ai, a trailblazer in AI-driven solutions, proudly announces the issuance of three transformative patents, alongside a groundbreaking pending patent application. These achievements underscore the company’s unwavering commitment to innovation and its mission to redefine the future of technology in the insurance industry.
Patent Highlights
- Patent US-11604926-B2 Filed: February 21, 2020 | Issued: March 14, 2023 Focus: A method and system for creating and summarizing unstructured natural language sentence clusters for efficient tagging. Benefits: Enhances natural language processing (NLP) tasks by removing domain noise and hierarchically clustering sentences for more efficient tagging. Inventors: Ramaswamy Venkateshwaran, Sridevi Ramaswamy, Priya Rani, Huanchen Li, and Ke Chen.
- Patent US-11797778-B2 , Filed: February 7, 2023 | Issued: October 24, 2023,, Focus: A computerized natural language processing system with insights extraction using semantic search. Benefits: Enables the extraction of domain-specific insights from large documents through semantic analysis. Inventors: Ramaswamy Venkateshwaran, Sri Ramaswamy, John Standish, and Tim Evans.
- Patent US-11900066-B2 . Filed: November 14, 2022 | Issued: February 13, 2024 Focus: A computerized natural language processing system with insights extraction using semantic search. Benefits: Introduces a method to tag domain-relevant semantic hashtags through NLP document analysis. Inventors: Ramaswamy Venkateshwaran, Sri Ramaswamy, John Standish, and Tim Evans.
Driving Innovation Forward
These patents exemplify Charlee.ai’s dedication to developing groundbreaking technology that empowers industries and enhances user experiences. The solutions pioneered in these patents address key industry challenges and drive meaningful advancements in AI-powered solutions.
“Our team is continually pushing boundaries to craft solutions that matter,” said Sri Ramaswamy, CEO of Charlee.ai. “These patents represent our relentless drive to innovate and provide transformative technology for our clients and partners.”
Research
Arity Data Suggests Daylight Saving Time Change Doesn’t Impact Accident Risk as Much as People Think
Every year, daylight saving time (DST) prompts concerns about drowsy driving and increased accident risks. The common belief is that losing an hour of sleep leaves drivers sluggish, making roads more dangerous. However, driving behavior data from mobility analytics company Arity, founded by Allstate in 2016, suggests the reality may be more nuanced.
One of the key indicators of driver risk is hard braking, which often signals a driver reacting suddenly to avoid a collision. Arity analyzed three years of data and found that hard braking rates remained largely consistent in the week following the spring time change.
“Nationwide, hard braking increased by less than 1% after the shift to daylight saving time,” said a spokesperson from Arity. “This suggests that, at least in terms of sudden stops, driver behavior doesn’t change dramatically.”
Revealed – $480 billion could be saved by carriers
An ACORD study has revealed that only one-quarter of insurance carriers have fully digitalized their value chains, while more than 10% are not significantly incorporating digital technologies into their operations.
Meanwhile, more than half of the respondents are still assessing how digitalization can be applied to their business models.
ACORD has released its 2025 edition of the annual ACORD Insurance Digital Maturity Study*. The report analyzed 210 of the world’s largest insurance carriers across property and casualty, life and reinsurance.
The study used the most current available data to evaluate each company’s digital maturity in comparison to industry peers and to measure the relationship between digital capabilities and value creation. It also identified key challenges, implications and necessary steps for successfully digitalization. The findings provide a framework for recognizing gaps and focusing on areas for improvement.
AI & Digital Maturity
A new addition to the 2025 edition is the “AI & Digital Maturity” addendum, which examined AI’s potential impact on insurance enterprises and how AI adoption can help less digitally mature organizations overcome obstacles and accelerate development.
ACORD’s analysis found that integrating AI capabilities could reduce expenses for P&C insurers by up to 14.6%, representing potential savings of more than $480 billion annually across the industry. For life insurers, the estimated annual value potential exceeds $300 billion, according to the report.
Climate/Resilience/Sustainability
Innovative InsurTech Procurement Powers Green Future | InsurTech Digital
Insurers like Zurich and Allianz are steering the shift towards sustainable procurement, helping to shape a greener, more resilient future
As society increasingly prioritises sustainability, companies across sectors are stepping up to incorporate ethical and responsible practices within their operational frameworks. Specifically, the insurance industry is uniquely positioned to foster sustainability through strategic procurement practices.
Companies here not only manage climate-related risks but also anchor the shift towards more ethical supply chains, reduced carbon emissions, and compliance with evolving regulatory mandates.
We delve into how major players like Zurich Insurance and Allianz are embedding sustainable practices into their procurement strategies to enhance operational longevity and catalyse broader industry shifts towards environment-conscious business models.
Embedding Sustainability in Procurement
Fostering sustainable procurement aligns closely with both investor expectations and regulatory frameworks, significantly aiding in the resilience and minimisation of environmental footprints.
InsurTech/M&A/Finance💰/Collaboration
Insurtech Funding Round-Up: The Top Investment Raises so far in Spring 2025
The year saw continued geopolitical instability, persistent inflationary pressures, and evolving interest rate policies, all while the rapid advancement of AI began to fundamentally reshape industry expectations. This complex backdrop has created a nuanced investment climate where strategic foresight is paramount.
While the long-term impacts of 2024 are still unfolding, early indicators suggest strong investor interest in the following areas:
- AI-Driven Operational Efficiency: Insurtechs demonstrating tangible ROI through AI-powered automation, claims processing, and personalized customer experiences will attract significant capital.
- Climate Risk Mitigation & Resilience: With increasing awareness of climate change impacts, solutions focused on parametric insurance, disaster risk modeling, and sustainable underwriting will be highly sought after.
- Cybersecurity & Data Privacy: As cyber threats become more sophisticated, investors will prioritize insurtechs offering robust cyber insurance products and innovative data protection solutions.
- Personalized Health & Wellness: Companies leveraging telematics, wearables, and data analytics to provide proactive health management and personalized insurance offerings will remain attractive.
- Employee Benefits & Risk Management: In a dynamic labor market, solutions that enhance employee well-being and mitigate workforce risks will continue to generate investor interest.
- Advanced Telematics & Mobility Solutions: Insurtechs that are developing next generation telematics for all forms of mobility, and that can show real world data and results will be in a good position to raise capital.
Insurtech Insights rounds up the top investment results for insurtechs in February and March 2025.
Gallagher pushes back likely close of AssuredPartners deal - Business Insurance
Arthur J. Gallagher & Co. said Friday its proposed $13.45 billion purchase of rival brokerage AssuredPartners Inc. will likely close in the second half of this year rather than the first quarter.
Gallagher said it had received a request for additional information as part of its Hart-Scott-Rodino filing related to the deal. HSR filings are required by the Federal Trade Commission and the Department of Justice for sizeable transactions as part of antitrust reviews. The law typically imposes a 30-day waiting period before the companies can begin the integration process.
In a statement, Gallagher said a second request for information is common for this type of transaction.
“It extends the waiting period imposed by the HSR Act until 30 days after Gallagher has substantially complied with the request, though it is possible for that period to be extended voluntarily by the parties or shortened by the antitrust agency.
“Gallagher is actively responding to the request and expects that the transaction will close in the second half of 2025.”
Gallagher announced in December that it had agreed to buy AssuredPartners. The deal would bolster Gallagher’s position as the world’s third-largest brokerage, with about $14 billion in annual revenue.
Earlier this week, Gallagher announced the proposed purchase of Woodruff Sawyer & Co. for $1.2 billion.
Nirvana Insurance Secures $80M Series C to Redefine Commercial Insurance with AI
Nirvana Insurance, the leading AI-driven commercial trucking insurer, today announced an $80 million Series C funding round, valuing the company at nearly $850 million. This round came after a momentous year for Nirvana, which exceeded $100 Million in Premiums, more than doubling year over year. The round was led by General Catalyst with continued support from existing investors Lightspeed Venture Partners and Valor Equity Partners. This investment will fuel Nirvana's rapid expansion and continued technological advancements in commercial fleet insurance.
Nirvana has built the first AI-powered commercial insurance platform that has reached significant scale. Nirvana has achieved best in class loss ratios with the strong support of top tier reinsurers with trillions in assets. Nirvana fully integrates IoT data that is embedded in telematics devices across fleets, and has analyzed over 20 billion miles of real world driving. This data asset powers its proprietary AI models, delivering superior risk assessment, underwriting, pricing, claims processing, and an overall better customer experience.
Nirvana Insurances Secures $80 Million Series C to Redefine Commercial Insurance with AI
"Nirvana is transforming the insurance experience with AI that helps us better understand the real world risk that every individual fleet presents," said Rushil Goel, CEO of Nirvana Insurance. "This investment allows us to scale our impact, ensuring fleets have access to personalized, real-time insurance solutions that reward safety - it's a fairer approach for the fleets, and a more profitable approach for an insurance carrier."
Commentary/Opinion
Goosehead Insurance
🪿 In the past, Goosehead shared that 2/3 of its new franchise agents come from the captive agent channel. You would think that the underwriting restrictions by State Farm, Allstate, and Farmers would lead to an increase in the number of Goosehead franchises, but it decreased – in 2022, Goosehead had 1,413 franchises and in 2024 it had 1,103.
Aside from looking to grow the number of franchises, Goosehead has been working to add more producers to existing franchises, but even here there wasn’t growth – the company had 2,101 producers in 2022 and 2,092 producers in 2024.
The other aspect Goosehead is talking about is productivity. Despite their claims that their franchise sales agents are significantly more productive than others in the industry, the company believes that the runway for further productivity improvement is “substantial.” Now, if you’re a glass half full person, you’d say that the company does have a lot of room for improvement considering that the top half of its franchises accounted for around 90% of new business production in the franchise network for 2022. But if you’re the glass half empty type, then you’d say that Goosehead’s real challenge is attracting franchise agents that can be productive enough.
This leads us to embedded insurance. In their recent earnings calls, the company shared that the type of franchises they are adding is changing. “More and more, we're looking for franchises with larger growth potential and built in lead flow. This includes businesses like mortgage servicers and realtors that want to access insurance economics by embedding a franchise in their business.”
Goosehead is trading at approximately 14 times its annual revenue – that’s more than Google and Progressive. Geese are known for their ability to fly long distances, but this goose is in the business of trying to teach others how to fly.
Avi Ben-Hutta, Insurance coverage @coverager as posted on LinkedIn
Los Angeles Wildfires
Lloyd's pegs LA wildfire loss at $2.3bn as FY'24 GWP rises 6.5% -
The specialist Lloyd’s insurance and reinsurance marketplace has announced a net loss estimate of around $2.3 billion for the Los Angeles, California wildfires, as the market reports another strong year of underwriting profit and top-line growth.
Lloyd’s is scheduled to release its full year 2024 results on March 20th but has today reported some preliminary figures alongside its January 2025 California wildfire loss for the market.
“Whilst not included in the FY24 result, based on the information currently available, we estimate the net loss to the market for the Californian wildfires to be approximately $2.3bn,” Lloyd’s has revealed.
“We would like to extend our deepest sympathies to those affected by the California fires earlier this year. Although we are still assessing the full impact, we do not expect this to be a capital event,” said Burkhard Keese, Lloyd’s Chief Financial Officer (CFO).
Currently, industry loss estimates for the wildfires are merging around the $40 billion mark, although some have suggested a total loss closer to $50 billion. Either way, it’s the costliest wildfire event in U.S. history and one of the most expensive natural catastrophe loss events ever for insurers and reinsurers.
Payments
Unified Platforms Help Insurers Meet Customers Where They Want
Insurance is one of the most complex industries, marked by multiple touch points among several stakeholders — from carriers to customers, claims adjusters to contractors.
One Inc. Chief Revenue Officer Kevin Ostrander told PYMNTS that payments remain among the most important touch points within those interactions, yet payments are inefficient, often paper-based. However, the insurance industry has been going through what he called “a massive digital transformation over the last 20 years” that promises to speed up workflows and payments.
That transformation was initially focused on core systems, where carriers began to move off their legacy systems, which housed hundreds of applications that governed and ran insurance operations, from billing to claims. Carriers have been striving to streamline all manner of processes and drive an optimized customer experience, he said.
As for the payments, “when you think generally about payments overall, the concept of accepting a payment or pushing a payment isn’t really complicated,” he said. But what is complicated is getting to the point where, in property and casualty, life insurance and other segments, carriers can meet customers where, when and how they want to pay and be paid.