Curators' Corner: Alan Demers and Stephen Applebaum
News
State Farm agrees to reduce proposed interim rate increase for California homeowners | Insurance Business America
State Farm General has agreed to reduce its proposed interim rate increase for homeowners insurance in California from 21.8% to 17%, according to a report from AM Best, citing testimony during a California Department of Insurance (CDI) hearing.
As part of the agreement, parent company State Farm plans to contribute $500 million in capital to support the subsidiary.
CDI attorney Nikki McKennedy asked Administrative Law Judge Karl-Fredric Seligman to approve the revised rates and related conditions. She cited ongoing financial challenges faced by the state’s largest homeowners insurer, warning that failure to act could disrupt access to coverage for policyholders.
David Appel, an economist serving as a consultant for State Farm General, said denying the rate request could affect the company’s ability to continue operating in the California market. He recommended allowing the increase on an interim basis, with a full rate hearing to follow to evaluate whether the emergency adjustment was warranted.
Consumer Watchdog Urges Denial of State Farm's Emergency Rate Hike at Conclusion of Department of Insurance Hearing
Consumer Watchdog delivers its closing argument today in a high-stakes hearing before the California Department of Insurance, urging the Insurance Commissioner to reject State Farm's emergency request for an interim increase in homeowners insurance rates. The consumer advocacy organization argues that State Farm failed to meet the legal standard required under California law to justify a mid-proceeding rate hike, and that the proposed settlement would unfairly burden consumers without resolving the insurer's financial issues.
"No insurer, not even one as large as State Farm, is exempt from the requirements of Proposition 103," said William Pletcher, Litigation Director at Consumer Watchdog. "Emergency rate increases must be based on sound actuarial evidence showing that current rates are plainly inadequate. State Farm has provided no such evidence."
In its closing remarks, Consumer Watchdog emphasizes that State Farm's arguments focused on financial pressures and market conditions, rather than the actuarial analysis required under California law. The organization's expert witness, Ben Armstrong, testified that even under the most favorable assumptions to State Farm, the company did not meet the legal threshold for an interim rate.
"California law is clear: insurers must justify their rates before they raise them," said Pletcher. "This proceeding confirmed that State Farm's request does not meet the legal standard. Granting this interim rate would set a dangerous precedent, allowing insurers to bypass consumer protections and shift costs onto struggling families."
NAIC: Top P&C insurers in 2025
The P&C industry recorded around $1.06 trillion in direct written premium in 2024.
Each Spring, the National Association of Insurance Commissioners (NAIC) releases its analysis of the top property and casualty insurers of the year. With nearly 98% of insurers reporting, the NAIC determined the industry recorded around $1.06 trillion in direct written premium in 2024, with the top ten P&C insurers accounting for about 51% of the total market share.
The largest line of business remains personal passenger auto, with an estimated $344.11 billion in written premium, which makes up about 35% of the overall market.
How did insurers rank in 2024? As of March 2024, NAIC’s rankings for the top P&C insurers were as follows:
- State Farm (9.82% market share)
- Progressive (6.57%)
- Berkshire Hathaway (6.25%)
- Allstate (5.24%)
- Liberty Mutual (4.56%)
- Travelers (4.04%)
- USAA (3.35%)
- Chubb (3.32%)
- Farmers (2.85%)
- Nationwide (2.07%)
Financial Results
Second quarter P&C outlook is a mixed bag
Nuclear verdicts and natural disasters have carriers exercising caution, but the second quarter is mostly looking up for the P&C market.
Panelists at the Burns & Wilcox P&C Market Outlook Q2 2025 webinar weighed in on various lines:
On the commercial side, “it’s not a straightforward soft or hard market,” said Connor Farquharson, manager, commercial insurance with Burns & Wilcox. Carriers are willing to lower rates to keep renewals, but they’re not budging on deductibles or coverage limits. “Carriers are really sticking to their guns to protect themselves,” he said. “It used to be the rate would protect them; now it’s the coverage.”
Clients are seeing lower liquor limits — around $300,000 to $500,000 instead of $1 million — due to the impacts of litigation and large verdicts around the country. Auto coverage is similar, with risks being harder to place right now.
For personal lines, while the home insurance market overall is stabilizing, carriers are increasing home hardening requirements, like clearing brush and other hazards away, for owners. “What used to be recommendations now might be requirements,” said Pamela Alphabet, associate vice presidents, personal insurance with Burns & Wilcox. “They might be used to reduce premiums or even be a factor in coverage eligibility.”
After Hurricanes Helene and Beryl caused widespread flooding last year, flood coverage is top of mind for many, and a lot of insureds are still without coverage. Last year’s active weather have also pushed many carriers to start implementing wildfire deductibles, and wind and hail deductibles are increasing.
U.S. Property and Casualty Industry Reports Underwriting Profit in 2024
Fitch Ratings: The U.S. property and casualty (P&C) industry significantly improved its statutory underwriting performance and net earnings in 2024, according to a new report by Fitch Ratings. The P&C industry achieved a 96.6% combined ratio (CR), which is a reduction of 5.2 percentage points from the prior year. Despite elevated catastrophe losses, underwriting results benefitted from a notable improvement in personal lines and consistent commercial lines profits.
“The P&C industry returned to underwriting profitability in 2024, with a significant earnings improvement following two years with a combined ratio over 100% and below-average return on surplus,” said Senior Director Tana Marcom.
Although premium growth moderated from the prior year, it remains above historical levels. Continued strong growth in personal lines premiums, driven by large underwriting losses in recent years, combined with moderating growth in commercial lines premiums, contributed to solid written premium growth for the P&C industry in 2024.
Fitch expects modest deterioration in personal lines performance in 2025 due to higher claims severity in automobile and homeowners’ lines from inflationary tariff effects, partially offset by ongoing price increases. Commercial lines underwriting results may also narrow as social inflation remains a concern for liability insurers. Adverse reserve experience in longer-tail casualty segments, including commercial auto and other liability, is likely to persist. Additionally, weaker economic growth from a trade war would reduce demand for commercial insurance.
Research
ZestyAI Identifies Over 12.6 Million U.S. Properties at High Risk for Hail Damage
ZestyAI, the leader in AI-driven risk analytics for the insurance industry, today revealed that more than 12.6 million U.S. properties are at high risk of hail-related roof damage, representing $189.5 billion in potential replacement costs.
The analysis, powered by ZestyAI’s proprietary Z-HAIL™ model, highlights the rising cost of hailstorms and underscores the urgent need for more precise risk assessment in the insurance sector.
The financial impact of severe convective storms (SCS)—which include hail, tornadoes, and high-wind events—has been growing rapidly, with damages in 2024 alone estimated at $56 billion, surpassing losses from hurricanes. Despite this increasing threat, many insurers still rely on traditional catastrophe models designed to estimate exposure at the portfolio level rather than at individual property level. These older models often miss the specific structural and environmental factors that lead to real-world losses from hail events.
“Catastrophe models have helped insurers understand where storms may strike and how losses might add up at a portfolio level,” said Kumar Dhuvur, Co-Founder and Chief Product Officer at ZestyAI. “But they weren’t built to assess risk at the individual property level, and they often miss the specific conditions that drive hail damage. By analyzing the interaction between structure-specific features and local storm patterns, we can distinguish risk between neighboring properties—enabling smarter underwriting, more precise pricing, and better protection for policyholders.”
Commentary/Opinion
(10) What Does 'Increased Severity' of Weather Events Really Mean? | LinkedIn
We often hear this phrase in headlines and especially in insurance and risk circles: "The frequency and severity of severe weather is increasing."
It’s a statement that feels intuitively true. But recently, I’ve been reflecting on the idea of "severity", what’s actually driving it, and whether our terminology is helpful to the wider understanding for non-insurance folks. What do we really mean when we say an event is more severe? Is it the size of the storm? The length of the recovery? The dollar value of the damage left behind? Or something else entirely?
When we, as the insurance industry talk about severity, we’re talking about how much it costs. A CAT 5 Hurricane that barrels through a low-density area won’t be as severe as CAT 2 that hits a major metro area. So, are events getting more severe?
Yes, climate change is a factor. There’s broad agreement that warmer oceans, changing weather patterns, and a shifting atmosphere are making certain weather events more extreme. Hurricanes are packing more power. Wildfires are occurring out of season and driven further and faster by extreme weather. Droughts are lasting longer. But that’s only part of the story.
Severity isn’t just about how strong the wind blows or how much rain falls. It’s also about what stands in the path, and how much it costs to rebuild. And in today’s world, what stands in the path is a lot more than it used to be.
More people, more property, more exposure – we’ve made the bullseye bigger. FULL BLOG
Daniel Grimwood-Bird Chief Revenue Officer at Maptycs
AI in Insurance
AI in insurance praised, but consumers still aren't convinced – GlobalData
Tech used to enhance claims process and customer support
The insurance sector continues to encounter consumer hesitation around artificial intelligence, even as users report positive experiences with the technology, according to a recent GlobalData survey.
While AI is seen as a tool that could enhance efficiency and accuracy, insurers are being urged to address ongoing trust concerns, particularly in areas related to data privacy and decision-making transparency.
Benefits of AI in insurance
GlobalData’s 2024 Emerging Trends Insurance Consumer Survey, which polled more than 5,500 individuals across 11 countries, found that nearly three-quarters (73.8%) of respondents believe AI can shorten the time required to reach a customer service representative.
Around 71.5% cited potential gains in operational performance, and a similar proportion (71.2%) agreed AI may outperform humans in pattern detection.
Among those who have engaged with AI tools in insurance, user satisfaction is relatively high. Of those using insurance chatbots, 74.5% reported being satisfied or very satisfied with the interaction.
Recommended Events
Last 24 hours to Register! l ClimateTech Connect |Washington DC | April 15th-16th.
Registration Closes Tomorrow!
As extreme weather events are growing around the world in frequency and severity, there is a rising tide of cutting-edge technological innovation to combat the challenge head on, which is at the center of the inaugural ClimateTech Connect coming to Washington DC next week on April 15th-16th.
The conference will feature a mix of established companies and emerging start-ups, with participation from global programs like Plug and Play and Lloyd’s Lab, as well as organizations including: Munich Re, Moody’s, PolArctic, CLIMATIG, Green Shield Risk Solutions, Majesco, Ric, Reask, Floodbase, Eventual Weather, Solera, NASA, Swiss Re, ResiQuant, Verisk, Maptycs, Floodbase, Demex, Earth Analytics Group
Predict & Prevent
Moen Partners with Liberty Mutual Insurance to offer Savings on In-Home Leak Protection
Moen, the leader in water experiences in the home, today announced an initiative with Liberty Mutual Insurance to provide its customers with special savings and installation programs on the Moen® Flo Smart Water Monitor and Shutoff devices. By offering the technology at a discount to homeowners, Moen aims to significantly reduce the risk of water damage claim frequency by as much as 96%1 and reduce household water wasted through preventable leaks by up to 90%.
Moen will be working with Liberty Mutual to help provide the Flo Smart Water Monitor and Shutoff to policyholders.
"Water damage is costly: It is estimated that insurers pay out over $15 billion in water claim damages annually, many of which are due to water leaks3," said Jeff Barnes, vice president, affinity partnerships, Moen. "These types of events account for 24% of all homeowner insurance claims4. By encouraging the use of Flo smart leak detection, Moen can help insurance companies reduce water damage claims caused by water leaks and alleviate costs associated with those claims."
Moen will be working with Liberty Mutual to help provide the Flo Smart Water Monitor and Shutoff to policyholders.
Beyond leak detection and shutoff, Flo can help prevent water waste – an increasing concern for Americans. In fact, it is estimated that one trillion gallons of water across the country are wasted due to leaks each years.
The Flo Smart Water Monitor and Shutoff continuously monitors the pressure and flow rate of the water moving through a home's pipes, detecting leaks as small as a drop per minute anywhere in the home. If the device identifies an issue, it will promptly send an alert through the Moen Smart Water Network App, enabling users to turn off the water, or in the event of a catastrophic leak, it will automatically shut off the water to prevent major damage. Homeowners can also track water usage by fixture and set conservation goals within the app to further support water-saving efforts.
People
I-CAR Names Kyle Thompson New CEO of Collision Repair Organization
John Van Alstyne's successor served on I-CAR's board of directors for nine years. He assumed the chairmanship in 2020, during which time I-CAR earned IACET accreditation.
I-CAR CEO and President John Van Alstyne announced his impending retirement in April 2024. Now, according to a press release, his successor has been named.
Kyle G. Thompson has been named to lead the organization as CEO and president effective May 5, announced Board Chair Jennifer Goforth.
Since joining I-CAR in December 2010, Van Alstyne has been instrumental in shaping the organization's relevance, growth, vision, and success. Under his leadership, I-CAR expanded and reshaped its product and service offerings, achieved financial stability, and made a lasting impact on the collision repair industry.
"It has been an incredible privilege to lead I-CAR over the past 15 years, and I'm deeply proud of the work we've accomplished as a team on behalf of the industry," said Van Alstyne. "As an industry we are more broadly performing complete, safe and quality repairs and more connected because of the dedication of our team and the support of our partners. I have full confidence in Kyle's leadership and the future of I-CAR under his guidance."
{MORE](https://www.fenderbender.com/news/latest-news/news/55281408/i-car-i-car-names-kyle-thompson-its-new-ceo-of-collision-repair-organization)
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