Commentary/Opinion
P&C INSURANCE: MIND THE GAP(S)
Alan Demers and Stephen Applebaum
First Published, Feb. 20, 2025
The expression 'Mind the Gap' dates to the 1960s when it was first announced on the London Underground. The purpose was to warn passengers of the potentially dangerous gap between the train door and platform which are not perfectly aligned. It has since evolved to become a general warning about the danger of open space or gap between two points.
It applies especially well to the many risks and headwinds faced by the insurance industry today. And if unattended, may be irreversible or much harder to close.
The P&C industry is by design, resilient with layers of financial insulation. Reinsurance, surplus capital, low-risk and liquid investment portfolios are just some of these layers with individual state oversight to monitor financial stability. The insurance model has been tested over time during high inflationary periods and severe catastrophic events and alternating hard and soft market cycles. However, the last three years are arguably the most challenging from fluctuating inflation and worsening climate risks. Meanwhile, there are emerging and widening gaps that both threaten and are reshaping massive segments such as real estate and homeownership.
Navigating Natural Disasters: Restoring Trust with Policyholders
Proactive communication—before, during, and after catastrophes—can help insurers mitigate confusion, reduce customer attrition, and reinforce their role as trusted partners.
The LA wildfires are projected to be among the costliest natural disasters in U.S. history, as preliminary estimates put the damage and economic losses between $135 billion and $150 billion. But as the recovery gets underway, there are survivors who have been confronted with the realization that their insurance coverage was not adequate enough to support their rebuilding efforts. The same story is being told across the Gulf Coast and the southern Appalachian Mountains in the aftermath of Hurricanes Helene and Milton. The net result is that many insurance customers feel alone, as though they are navigating a system that is more inclined to fail them than protect them when disaster strikes.
Insurance companies cannot control the number or severity of catastrophe losses and the impact that they have on communities, individuals, and business owners, but they can control the way they communicate with their customers—before, during and after a loss.
Be a Trusted Advisor
Proactive communication shouldn’t start only when a claim is filed. Forward-thinking insurers are recognizing the value of engaging with policyholders before a loss occurs, creating a foundation of understanding, preparedness, and trust.
One powerful way to do this is through clear, timely explanations of coverages. Many policyholders don’t fully understand what their policy includes (or excludes) until it’s too late. By proactively communicating about coverage details in plain, relatable language—especially when policies are purchased or renewed—insurers can help customers make informed decisions, avoid unwelcome surprises, and feel more confident in their protection. MORE
Eileen Potter is VP of Marketing for Insurance at Smart Communications
News
New UnitedHealth CEO vows to fix gaps
As the largest health insurer in the United States, UnitedHealth Group is under increasing pressure to address criticism about care denials, rising costs, and a complex system that many patients say is difficult to navigate. Its new CEO is now responding publicly, pledging improvements in how it communicates with patients and streamlines access to care.
The move follows months of public scrutiny - including a viral social media backlash after previous chief Brian Thompson was killed on his way to an investor meeting in December. The shooting, and the reaction that followed, exposed a growing rift between how the company views itself internally and how it’s perceived by the public.
In interviews conducted in March, UnitedHealth executives acknowledged that many consumers feel lost in the health system and frustrated by delays caused by prior authorizations and coverage denials.
Tim Noel, who stepped into Thompson’s former role leading the insurance unit, said, “We are fixing them,” while also acknowledging ongoing challenges.
The company has since begun efforts to cut back on the number of medical services requiring prior approval. For Medicare specifically, the company reports a 40% reduction in prior authorization requirements since 2016. UnitedHealth is also working on tools to help physicians and patients check insurance coverage, receive approvals, and get cost estimates directly from the exam room.
Financial Results
Fitch: P&C industry improved profitability in 2024
Premium growth remains above historical levels.
The U.S. property and casualty industry improved its underwriting and earnings performance last year, according to a new report from Fitch Ratings.
Even with large catastrophe losses, the industry achieved a 96.6% combined ratio, down 5.2 percentage points from 2023. The combined ratio is a measure of insurer profitability: anything below 100% indicates a profit, while anything above 100% indicates an underwriting loss.
“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 Tana Marcom, senior director at Fitch Ratings, in a statement.
Premium growth remains above historical levels. Personal lines premium growth has been strong due to large underwriting losses over the past several years. Commercial lines premiums are growing but starting to moderate.
Fitch expects higher auto and home insurance claims in 2025 due to the inflationary effects of tariffs, which will cut into personal lines performance. Weaker economic growth due to a trade war could also reduce demand for commercial lines.
Progressive's quarterly profit jumps on robust auto insurance demand
Progressive (PGR) reported a 10% jump in first-quarter profit on Wednesday, helped by resilient demand for its auto insurance policies.
Shares of the Mayfield Village, Ohio-based company rose 1.8% to $281 before the bell.
Rising wages and low unemployment in the reported quarter helped sustain customer spending on auto insurance, one of Progressive's mainstay revenue streams.
Its net premiums written jumped 17% to $22.21 billion in the quarter.
The insurer's combined ratio was 86%, compared with 86.1% in the year-ago period. A ratio below 100% means it earned more in premiums than it paid out in claims.
Progressive provides insurance for personal as well as commercial autos and trucks, motorcycles, boats, recreational vehicles and homes.
The company's net income rose to $2.57 billion, or $4.37 per share, in the quarter ended March 31, from $2.33 billion, or $3.94 per share, a year earlier.
Progressive had 35.1 million personal insurance policies in force, 18% higher than a year earlier. Commercial lines policies were 6% higher than last year.
Insurers face potential disruptions from tariffs, which could inflate the cost of auto parts and building materials as well as drive up repair costs.
AI in Insurance
Pinpoint Predictive Achieves Independent Fairness Certification, Setting the Standard for Responsible AI in Insurance
Pinpoint Predictive, an actuarial AI platform for property and casualty insurers, empowers carriers to quantify risk and predict loss ratios earlier and more accurately than traditional methods—supporting more profitable underwriting decisions, has achieved a major milestone in ethical AI with its recent fairness certification from ZwillGen's Artificial Intelligence (AI) Division. This independent certification underscores Pinpoint's commitment to providing transparent, bias-free AI solutions that meet the highest standards of compliance and ethical integrity.
ZwillGen, a renowned law firm specializing in technology and privacy law, offers advanced AI bias testing—an increasingly essential service as regulatory scrutiny intensifies across the insurance sector. By partnering with ZwillGen, Pinpoint demonstrates a proactive approach to responsible AI, ensuring its models are fair, compliant, and aligned with evolving industry guidelines.
The certification process involved a rigorous audit of Pinpoint's actuarial loss prediction model, focusing on disparate impact and proxy testing across demographic groups, including race, gender, and age. ZwillGen's AI Division applied standards from key frameworks, including the NAIC Model Bulletin on AI in Insurance (2023), the New York Department of Financial Services AI Circular (2024), and the Colorado AI Act, ensuring that Pinpoint's technology adheres to recognized guidelines for bias detection, risk controls, and transparency.
"This certification validates our commitment to developing AI tools insurers can trust to deliver both precision and fairness," said Scott Ham, CEO of Pinpoint Predictive. "By actively aligning our technology with the industry's most rigorous standards, we're giving insurers the confidence to adopt AI solutions that enhance compliance, improve decision-making, and drive competitive advantage."
‘Explainable AI’ in insurance: 5 best practices & 4 major challenges
As increasing use cases of AI in insurance add urgency to the need for explainability and transparency, experts are recommending "explainable AI" best practices to follow and key challenges to look out for.
“Models are going to vary, but explainability is generated through being able to demonstrate the datasets that the AI is being trained on, the correlation drivers that are creating the different outcomes. In the simplest terms, it’s quite literally showing the math [and] simplifying the explanations and models to where they can generate a level of transparency and predictability,” Peter McMurtrie, partner and insurance practice lead, West Monroe, said.
“The fundamental reason a business leader should be aware of this concept is to get value from the investment that they’re making into AI, GenAI, into any of the analytics that they’re doing,” Mike Fitzgerald, insurance industry advisor, SAS, added.
Explainable AI best practices
To this end, McMurtrie and Fitzgerald recommended insurers follow these five explainable AI best practices:
1.Have an AI inventory 2.Use the right tools 3.Incorporate human oversight 4.Test systems constantly 5.Don’t get too sophisticated
However, they cautioned that there are challenges to be considered as well. Those challenges include:
1.Balancing limitations with sophistication 2.Building trust 3.Training staff 4.Getting buy-in from executives
Announcements
Progressive Insurance® Announces New Cargo Plus Coverage
Progressive Insurance today announced the launch of Cargo Plus, a new endorsement that expands Motor Truck Cargo coverage purchased by for-hire truckers and other eligible customers.
Motor Truck Cargo coverage offers protection in the event a trucker is legally liable for damage to covered property while in the trucker's exclusive physical custody and control. The new Cargo Plus endorsement protects truckers by expanding coverage for perils attributed to wetness, rust, and corrosion, and covers perils attributed to driver error and changes in temperature on refrigerated loads for customers that purchase Refrigeration Breakdown coverage.
The Cargo Plus endorsement is automatically included on new Progressive policies with Motor Truck Cargo coverage. Existing Progressive customers with Motor Truck Cargo or Refrigeration Breakdown coverage can immediately benefit from enhanced coverage under Cargo Plus prior to renewal.
With Cargo Plus, Progressive is delivering additional protection to for-hire truckers with Motor Truck Cargo coverage to help them move forward with the confidence of knowing they've got the coverage they need. For-hire truckers carry Motor Truck Cargo coverage to protect the goods they are transporting, making it an important part of securing loads with brokers and shippers.
Claims
State Supreme Court issues ruling in Farmers Insurance Co. of Oregon case
The Oregon Supreme Court has overturned a $26.3 million class-action judgment against Farmers Insurance Co. of Oregon, finding the company did not violate state law in how it informed auto policyholders of their repair shop options.
The case involved Oregon’s “choice-of-shop” statute, which bars insurers from requiring policyholders to use specific repair shops as a condition of claim settlement. The law also outlines what insurers must disclose about a policyholder’s rights during the claims process. Lower courts found that Farmers’ notices failed to include all elements of the statute, leading to the award.
The Supreme Court ruled, however, that Farmers met its legal obligations by using notice language approved by the state’s Department of Consumer and Business Services (DCBS). The court said insurers that adopt agency-approved wording are not liable for omitting portions of the statute, affirming that the legislature intended for such approval to serve as compliance.
Truly transformative claims begin with unified data
Insurance digital-transformation trends are driving toward faster, more personalized claims experiences.
Today's insurance policyholders expect seamless, straight-through process (STP) automation in claims; services that deliver resolution speed and lead to policyholder retention while optimizing adjudication.
With a surge in the availability of new insurance technology promising the accomplishment of this feat, it’s the unification of data that remains the evolutionary hurdle.
The claims evolution The claims life-cycle has evolved to judiciously navigate both the meritorious and fraudulent, delivering on the promise of the insurance contract — originally through paper and now electronically — to the benefit of the millions who rely on it to cover their business and personal losses.
The insurtech movement has accelerated the transformation of claims processes through the introduction of advancements such as cloud computing, automation and AI. A 2024 study commissioned by Origami Risk polled 75 P&C insurance executives about their top priorities over the coming 18 months. It revealed that transformation trends are driving toward faster, more personalized claims experiences largely based on leveraging such technology.
Despite the advances that have been made, insurance carriers have the daunting task of making sure that positive outcomes in one area aren’t accompanied by negative outcomes in elsewhere. For example, digital transformation, with its expanded capabilities and promise of faster cycle times, comes with the added pressure of ensuring strict security and privacy standards are met.
Ryan Cantor is chief product and technology officer at Origami Risk
Los Angeles Wildfires
A Monumental Loss: Fine Art Collectors and Museums Grapple with the Aftermath of the Palisades Blaze
Fine arts insureds face historic losses from the Palisades fire.
The Getty Villa protrudes like a fortress from the hills along the coast of Malibu. The concrete, protected steel and travertine building was surrounded by an inferno for a time during the fire that struck the Pacific Palisades in Los Angeles in January. It was in the mandatory evacuation zone for a period of time as the fires burned.
There was damage on the property, but the museum itself — in a feat of risk management — is built from fire resistant stone. All of the artworks housed inside were protected.
“The Getty is one of the best protected, most well-built institutions on the planet,” said Jennifer Schipf, global chief underwriting officer of fine art and specie at AXA XL.
Others did not have that advantage. As the inferno raged, it killed 12 people and claimed countless properties. The losses of life and homes were devastating. In the wake of these major losses, many mourned the losses of the objects — photos, family heirlooms — that help give life meaning.
People
NY Automotive Forum 2025: Chrissy Taylor and Steve Rowley | Enterprise Mobility & Cox Automotive
At the 2025 NY Automotive Forum hosted by NADA, J.D. Power, and the New York International Auto Show (NYIAS), CBT News host Jim Fitzpatrick caught up with two of the industry’s top leaders: Chrissy Taylor, president and CEO of Enterprise Mobility, and Steve Rowley, CEO of Cox Automotive.
The conversation came on the heels of Taylor receiving the prestigious Automotive Hall of Fame Industry Leader Award, with Rowley helping present the honor. Together, they reflected on the award’s broader significance, shared insights into their respective company missions, and addressed the importance of collaboration and diversity as the automotive landscape continues to evolve.
Key Takeaways: - 1. A shared commitment to recognizing leadership and culture. - 2. The role of collaboration in navigating industry challenges. - 3. Enterprise Mobility’s evolution and broader mission.
Taylor discussed the company’s rebranding from Enterprise Holdings to Enterprise Mobility, signaling its expanded role in transportation. With nine business lines, the brand refresh is a reintroduction to consumers and partners, aligning with a long-term vision of innovation and growth built on customer service and employee development.
Telematics, Driving & Insurance
Ford Pro Insure Coverage expanded to Pennsylvania and Texas
More than 4 million small businesses in Pennsylvania and Texas have a new option for vehicle fleet insurance. A Ford Pro Insure policy from Ford subsidiary, The American Road Insurance Company (TARIC), powered by Pie Insurance, is now available.
"We're making fleet management easy with Ford Pro Insure traditional and usage-based insurance, along with the vehicles, financing, software and services in the Ford Pro suite," said Craig Carrington, Ford Credit executive vice president Operations and Insurance. "Ford Pro Insure is a new solution for businesses with fleets of Ford or other vehicles."
TARIC underwrites the Ford Pro Insure policies, which cover commercial vehicles purchased through Ford Pro and other channels. TARIC works with Pie, which specializes in serving small businesses with commercial insurance and, as managing general agent, providing sales, distribution, underwriting, policy servicing and claims management.
Usage-based insurance (UBI) that leverages vehicle data is available in Arizona, Illinois, Minnesota, Pennsylvania, Texas, and Wisconsin. UBI policies offer a 10% discount on enrollment, and Ford Pro Telematics subscribers may be eligible for additional savings.
"Data-driven insurance allows business owners greater influence over rates," Carrington said. Data is collected only with explicit customer permission.