Commentary/Opinion
Uncertainty Is the New Normal
Until recently, it was said that the only constant was change – now the only constant is uncertainty.
Uncertainty is at a generational high in almost every aspect of our lives, creating major challenges -- and opportunities -- for insurers.
Uncertainty is at a generational high in almost every aspect of our lives: socially, financially, politically, and technologically. One of the most serious consequences of this uncertainty is its impact on risk assessment across all lines of insurance. However, it also represents a major opportunity for insurers.
The model of risk transfer is centuries old and thrives on predicting when and how much known exposures are likely to happen and what the costs involved are. Thus, not all risks are insurable -- such as moral hazards where the incentives are misaligned. Risk transfer is further disrupted when doses of uncertainty distort predictive models.
Uncertainty exists when the magnitude (frequency and severity) of possible future events is obscured, making reasonably accurate forecasts unreliable. As uncertainty grows, the ability to effectively manage risk is proportionally reduced.
The implications of this new normal for insurance are existential for some insurers and more expensive for all, as it becomes harder to assess and properly price risk in the face of so much uncertainty. Not to mention the havoc that uncertainty wreaks for most consumers and businesses, including on insurers’ ability to plan and adjust. A result is uncertainty about insurance availability, degree of premium increases and extent of reduced coverage.
To make matters worse, several carriers seeking to contain risks have been withdrawing from regional markets where recent losses have unexpectedly spiked as a result of unprecedented losses from extreme weather exacerbated by ill-prepared mitigation. These pullbacks, which already target approximately 15% of U.S. property, are not only detrimental to policyholders in the affected regions but also undermine the benefits of risk pooling for all policyholders.
Yet the idea of insurance is to provide a promise of protection and safeguard against uncertainty. This goes beyond the functional insurance contract and strikes an emotional nerve, as well – peace of mind. The proverbial security blanket serves in more than one way, and the industry will hopefully find the right balance.
Alan Demers and Stephen Applebaum, by published on Insurance Thought Leadership
If this bill passes it will eradicate Florida's insurance market
Subcommittee votes overwhelmingly in favor of insurance attorney's contentious legislation
A Florida House panel has advanced a measure that could undo much of the work that has been done in the Sunshine State to reduce premiums, and could shift the financial burden of legal battles in insurance disputes back on to insurers in certain cases, reviving a debate over consumer protections and industry stability.
The state has long struggled with a high volume of insurance-related lawsuits, particularly involving claims for roof damage and water losses. Some attorneys and contractors have been accused of exploiting assignment of benefits (AOB) agreements and filing excessive or inflated lawsuits, leading to substantial legal costs for insurers. Florida accounts for a disproportionate percentage of the nation's property insurance lawsuits, despite representing a much smaller share of total policies.
Last week, the House Civil Justice and Claims Subcommittee voted overwhelmingly, 16-1, in favor of HB 1551, introduced by Rep. Hillary Cassel, a Republican from Broward County and a practicing insurance attorney. The bill would allow policyholders to recover attorney fees if they prevail in lawsuits against their insurers, reversing recent changes that critics say stripped consumers of crucial leverage.
News
Class action alleges GEICO’s accident forgiveness isn’t very forgiving
Accident forgiveness is a key point in much of GEICO’s auto insurance marketing. (Credit: merchantcircle)
One insured says his premium increased 91% after his first accident, though GEICO called it a "surcharge."
A class action suit filed in Texas at the end of February alleges that GEICO has not held up its end of the insurer’s highly advertised accident forgiveness policy.
The complaint was filed in Texas Federal Court by Christopher Cude on February 25. Cude claims that GEICO violated the state’s consumer protection laws with misleading policies, and that the company is unfairly raising premiums for customers who believed they were protected by the forgiveness policy.
Climate/Resilience/Sustainability
Hailstorms are the new hurricanes when it comes to insurance
Rising costs from hail damage in the South and Midwest are driving up insurance rates and putting homeowners at risk of cancellation.
While most of the insurance crisis news is focused on the impact of hurricanes and wildfires, hail is gaining ground as the repair of storm-damaged houses has grown so expensive that insurers are increasing premiums and even dropping homes to protect profits.
Per Wall Street Journal coverage of the same topic, convective storms — meaning storms characterized by rising warm, moist air, that potentially leads to heavy rainfall, strong winds, hail and even tornadoes — cost insurers $58 billion in the U.S. last year. That’s more than every U.S. hurricane except Katrina and Ian, according to the Insurance Information Institute, and more than the projected price tag for the Los Angeles fires.
“Hail damage is one of the leading causes of insurance claims, particularly in storm-prone states like Florida and Texas,” Anthony M. Lopez, CEO of Your Insurance Attorney, told HousingWire. Lopez also chairs the firm’s property insurance department. “Because insurers treat hailstorms as a costly risk, homeowners often see premium increases — even if they haven’t personally filed a claim. Some insurers have also introduced higher deductibles or coverage limitations specifically for hail-related damage, shifting more financial responsibility onto policyholders.”
Lopez says that hail can cause significant destruction to roofs, windows, siding and other exterior structures, depending on the size. “Insurers worry about the frequency and severity of these storms, especially in regions where hail is common,” he added. “However, while they highlight these risks when justifying rate hikes, they also frequently deny or underpay legitimate claims, leaving homeowners struggling to cover necessary repairs.”
Sarah Wolak
Yokahu Launches cat-risk.com Parametric Exchange to Transform Disaster Risk Finance
The platform is designed to seamlessly connect brokers, carriers, and data providers, significantly reducing friction in the market and ensuring fast, transparent payouts.
Yokahu (London), a Lloyd’s Coverholder parametric InsurTech that solely underwrites extreme weather and natural catastrophe risk via parametric (re)insurance, has announced the launch of cat-risk.com, which the company describes first independent, many-to-many parametric exchange for the London re/insurance market.
A statement from Yokahu says that cat-risk.com seamlessly connects brokers, carriers, and data providers to streamline parametric insurance transactions, significantly reducing friction in the market and ensuring fast, transparent payouts when disasters strike.
“Parametric insurance has long been heralded as a solution for fast, reliable disaster payouts, but inefficiencies in placement have hindered adoption,” comments Tim McCosh, Founder & CEO, Yokahu. “With cat-risk.com, we are delivering on the promise of parametric insurance—removing barriers, improving accessibility, and ensuring resilience in the face of growing climate and disaster risks.”
Built to enhance rather than disrupt the existing London market ecosystem, cat-risk.com transforms a traditionally slow and fragmented process—cutting quote and bind times from days to mere minutes, according to the Yokahu statement. The company says the platform enables real-time risk assessment, pricing, and seamless capacity allocation, broadening the ability of parametric (re)insurance to play a vital role in climate resilience and disaster preparedness.
Captives seen as vehicles for covering climate-related exposures
As catastrophe losses rise due to increased climate-related events, captives can be used to manage the exposures better, experts say.
The alternative risk transfer vehicles can fund risk management programs, provide additional capacity and be used to purchase and administer nontraditional insurance and reinsurance programs such as parametric coverage, they said during sessions at the Captive Insurance Companies Association’s 2025 International Conference last week.
The increased frequency of catastrophe events, the higher concentration of people in urban areas and greater supply chain risks are increasing companies’ exposure to climate-related losses, said Taronne Tabucchi, San Francisco-based director, climate risk advisory, at Aon PLC.
“If we can quantify the risk, if we can have more detailed analytics and information, we can come up with action plans to push back against these rising losses, help mitigate them and manage them for the future,” she said.
The flexibility of captives means they can play a key role in those efforts, Ms. Tabucchi said.
Financial Results
Ping An P&C's net profit swells 67.7% in 2024
Ping An Insurance Company of China has disclosed that its property & casualty (P&C) segment achieved a net profit of RMB 15,021 million in 2024, marking a significant 67.7% increase compared to 2023.
The segment maintained steady growth and strong business performance throughout the year, with insurance revenue for Ping An P&C reportedly climbing 4.7% year-on-year, reaching RMB 328,146 million in 2024.
Ping An P&C’s overall combined ratio for 2024 stood at 98.3%, reflecting an improvement compared to the previous year, indicating enhanced operational efficiency and better cost control within the firm.
Groupwide, Ping An has reported an operating profit attributable to shareholders for 2024 of RMB 121,862 million, up 9.1% from 2023.
Meanwhile, Ping An’s net profit for 2024 was RMB 126,607 million, marking a huge increase of 47.8% from 2023.
The firm’s total revenue in 2024 was RMB 1,141,346 million, up 10.6% from 2023, while its insurance funds investment portfolio grew 21.4% from the beginning of 2024 to over RMB 5.73 trillion.
Curators' Corner: Alan Demers and Stephen Applebaum
Thought Leadership Articles and Whitepapers
Our Q1 2025 published thought leadership articles...............
Rising Uncertainty: Risk & Opportunity for insurance Resilience
Trust, Personalization and Transparency: Foundational for Premium Accuracy
P&C Insurance Claims: The Time Has Come
AI in Insurance
Most experts advise insurers not to expect federal AI guidelines
Most legal and insurance industry experts aren’t expecting federal AI guidelines anytime soon, urging insurers to look to the National Association of Insurance Commissioners Model Bulletin and state regulations and form their own governance frameworks.
While the Biden administration had issued an executive order guiding the ethical use of AI, the Trump administration quickly rescinded the order.
“It’s very wrong to assume that what happened with the federal executive order has anything to do with insurance, because insurance is not regulated at the federal level; it’s regulated on a state-by-state level,” Mike Fitzgerald, insurance industry advisor, SAS, explained.
“I think that carriers shouldn’t be waiting around for federal legislation having to do with AI, and I don’t think that they are. I can’t say that it won’t happen. It probably won’t be specifically about insurance, but it could affect insurance in the same way that the Biden executive order did,” Robert Tomilson, partner, Clark Hill said.
However, Peter Dugas, executive director, Capco, and managing director of the company’s Center of Regulatory Intelligence, believes federal regulation of AI could be introduced in the coming months and could be structured in such a way that would allow businesses to flourish.
“At the federal level, it’s likely going to be more advantageous for insurance companies, meaning President Trump and his team have indicated that they’re going to try to be more business-forward and allow for AI to flourish… But it’s always a challenge industry by industry,” Dugas said.
InsurTech/M&A/Finance💰/Collaboration
Swiss Re sells stake in Definity Financial for $460 mln | Reuters
Swiss Re (SRENH.S), opens new tab on Tuesday announced a sale of its 10.5% stake in Canadian insurer Definity Financial (DFY.TO), opens new tab for 655 million Canadian dollars ($458.49 million).
The Swiss reinsurer expects to close the deal on March 19 and will hold no shares in Definity Financial after that, it said.
Kingstone Insurance Partners with Snapsheet to Elevate Claims Efficiency and Customer Experience
Kingstone Companies, Inc. (Nasdaq:KINS) (the "Company" or "Kingstone"), a Northeast regional property and casualty insurance holding company, today announced it has partnered with Snapsheet to simplify claims resolution and enhance operational efficiency
By deploying Snapsheet's intuitive software, Kingstone will modernize its claims operations to deliver a faster, more seamless experience for policyholders while improving cost efficiency.
"We are pleased to announce our partnership with Snapsheet as part of our ongoing commitment to providing the best claims experience to our valued policyholders," said Dave Fernandez, Chief Claims Officer of Kingstone.
"Snapsheet will optimize the claims process for our customers, enabling our dedicated team to focus on delivering fast, accurate, and compassionate claims service. With Snapsheet, we will introduce new digital communication capabilities, expand payment options, and intelligent automation to enhance the overall claims experience."
"We're excited to support Kingstone as they take their claims operations to the next level," said Andy Cohen, President of Snapsheet. "By deploying automation and intelligent workflows, our platform will enhance Kingstone's claims efficiency while delivering a seamless digital experience for policyholders."
Data Privacy
Insurers Must Resolve Cloud Adoption Challenges
Insurance companies face three critical challenges when migrating to the cloud: security, legacy integration and cost management.
Protecting data, closely adhering to pertinent rules and regulations, cleanly importing existing architecture, and controlling costs are all imperative for insurance companies when they migrate to and work in the cloud.
Recent survey data shows that 91% of banks and insurance firms are migrating to the cloud. And no wonder: Cloud migration offers significant benefits, such as better security, effective resource management, and cost optimizations. But these benefits don't come without challenges.
Addressing Data Security and Compliance Concerns
Properly managing the vast amounts of personal data insurance companies handle – which are so critical to day-to-day operations – involves changing the infrastructure, networks, access controls, and firewalls, among other things. All of these changes create big security challenges. Fortunately, cloud providers offer multilayered security measures, such as advanced network protections, continuous monitoring, end-to-end data encryption, secure backups, and rigid user permissions.
Karina Myers is the Microsoft Cloud practice lead at Centric Consulting