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![U.S. P/C Industry Underwriting Loss $20B+ Higher in 2022; Reserve Releases Fall](https://dxj7eshgz03ln.cloudfront.net/production/link/image/846269/twenty_by_nine_extra_large_e33c122f-1560-45a4-b48b-a06d2c7dfffb.jpeg)
U.S. P/C Industry Underwriting Loss $20B+ Higher in 2022; Reserve Releases Fall
U.S. P/C Industry Underwriting Loss $20B+ Higher in 2022; Reserve Releases Fall
According to data compiled by AM Best, the U.S. property/casualty industry recorded a $26.5 billion net underwriting loss in 2022, $21.5 billion more than the $5 billion underwriting loss the rating agency tabulated for 2021.
The P/C results, which the rating agency characterizes as preliminary, were presented in a Best’s Special Report titled “First Look: 12-Month 2022 US Property/Casualty Financial Results.”
The combined ratio linked to the $26.5 billion figure, at 102.7, is actually better than an estimated 104.0 full-year 2022 that the rating agency had forecast a few weeks ago. The earlier estimate, set forth in AM Best’s P/C Review & Preview report, was derived from analytical estimates, judgment and projections based on results through third-quarter 2022. The figures published yesterday were instead derived from companies’ annual statutory statements received as of March 9, 2023, representing an estimated 96 percent of the total P/C industry’s net premiums written.
![High Inflation Hiked P/C Claims Costs Up to 7.5% in 2022](https://dxj7eshgz03ln.cloudfront.net/production/link/image/846760/twenty_by_nine_extra_large_09aaf893-63f2-4471-8e30-dc59c2752052.jpeg)
High Inflation Hiked P/C Claims Costs Up to 7.5% in 2022
High inflation alone led to an increase in property/casualty claims of 5-7.5%, across five key markets in 2022, according to Swiss Re research.
“In 2023, we expect that inflation should lead to an additional increase of 3.5-6.5%,” said Swiss Re Institute’s Economic Insights report, titled “Inflation may be easing, but claims severity pressures in P&C remain,” which analyzed inflation and pricing trends in Germany, France, the UK, Australia, and the U.S.
AARP Launches Free App to Encourage and Reward Safe-Driving Practices
AARP launched a free smartphone app that empowers drivers to stay safe behind the wheel by analyzing five key driving behaviors linked to increasing safety and preventing crashes. AARP SafeTrip™ measures driving quality based on acceleration, braking, cornering, speeding and phone usage, and rewards success in each area or encourages improvement if needed.
“Even the most experienced drivers can benefit from seeing how safe they are on the road and if they could use some improvement,” said Josh Dunning, Vice President and National Director of AARP Driver Safety. “AARP SafeTrip serves as another milestone in our commitment of more than four decades of helping keep drivers safe, confident and independent.”
![Auto insurance market disrupted by alternative companies favored by drivers](https://dxj7eshgz03ln.cloudfront.net/production/link/image/846620/twenty_by_nine_extra_large_df866d13-ac78-4a51-9296-32b0468c3619.jpg)
Auto insurance market disrupted by alternative companies favored by drivers
Boutique auto insurance companies earned higher satisfaction scores than industry behemoths such as GEICO, Progressive, and Allstate in Consumer Reports’ (CR) latest member car insurance survey.
It’s the latest indication that consumers appear more inclined to choose smaller companies with more comprehensive coverage over larger insurers that might lack breadth of coverage, even if it costs more.
In ranking of 36 companies, USAA, NJM, Amica and Erie topped the list despite spending less on advertising and being less familiar than their competitors, CR said. All four of the insurers received favorable scores.
![Closing flood protection gap requires new approaches: Zurich](https://dxj7eshgz03ln.cloudfront.net/production/link/image/847167/twenty_by_nine_extra_large_fb412f32-95fb-4097-aab4-2e6379659cbd.jpg)
Closing flood protection gap requires new approaches: Zurich
Closing the flood protection gap in vulnerable countries will require “massive investments” and new approaches from policymakers and re/insurers, a new report by the Zurich Flood Resilience Alliance has concluded.
The report highlights the urgent need to mitigate the effects of climate change for those most at risk of devastating flooding, as well as implementing adaptation efforts to prevent and manage avoidable losses.
Additionally, comprehensive social protection programs need to be created or strengthened in at-risk areas, the Alliance said, with insurance schemes utilised in some cases.
The Alliance is a multi-sectoral partnership that aims to build community flood resilience in both developed and developing countries. All members of the Alliance, with the exception of Zurich Insurance Company, are funded by the Z Zurich Foundation.
![State Farm reports $1 BILLION increase in hail claim costs](https://dxj7eshgz03ln.cloudfront.net/production/link/image/847164/twenty_by_nine_extra_large_39a2a33f-71b5-4c02-9954-c271f3639dbf.png)
State Farm reports $1 BILLION increase in hail claim costs
State Farm has reported that the company’s annual claims paid to help customers recover from hail damages increased more than $1 billion from 2021 to 2022.
According to the insurance giant’s official statement, the reasons for the sharp increase is two-fold, namely: an increase in hail claims and inflation.
The number of hail claims increased by nearly 45,000 from 2021. However, inflation and supply chain issues occurring across the country is also responsible for the overall increase. To put it in more relative terms, the average claim increased by nearly $2,000 last year. That is the largest year-over-year increase to date.
![‘Worrying Sign’ as Homeowners Repair, Claim Times Increase but Digital Usage Declines‘Worrying Sign’ as Homeowners Repair, Claim Times Increase but Digital Usage Declines](https://dxj7eshgz03ln.cloudfront.net/production/link/image/846542/twenty_by_nine_extra_large_efbe55f0-b8d8-4083-ad39-c709d0ed1466.jpg)
‘Worrying Sign’ as Homeowners Repair, Claim Times Increase but Digital Usage Declines‘Worrying Sign’ as Homeowners Repair, Claim Times Increase but Digital Usage Declines
A combination of severe events, increasing prices and supply chain-related issues conspired to make 2022 the worst financial year for homeowners insurance providers. This—coupled with the strain on digital tools designed primarily to help the industry respond more quickly and efficiently—has led to increased dissatisfaction among customers, according to a recent study by J.D. Power, the “2023 U.S. Property Claims Satisfaction StudySM."
“The p-c industry playbook for the past few years has been to invest heavily in digital solutions that streamline the claims process for customers, while reducing costs and improving efficiency for carriers," said Mark Garrett, director, insurance intelligence at J.D. Power. “However, the longer cycle times have made it increasingly difficult to keep customers informed via digital channels and limit their need to contact their insurer with questions."
![Transformation Is Now an Imperative](https://dxj7eshgz03ln.cloudfront.net/production/link/image/847178/twenty_by_nine_extra_large_d62b8ef7-5c6d-4a52-8bfc-7b06089b38f6.jpeg)
Transformation Is Now an Imperative
The insurance industry is at a crossroads, and ecosystem enablement and new business models are no longer a choice but an imperative.
Insurance has been a pillar of society for centuries, providing individuals and businesses with the protection they need against life's uncertainties.
Whether it was the law in King Hammurabi’s code that said a debtor didn’t have to pay back debts if a personal life tragedy made it impossible, or an insurer in today’s world helping homeowners repair their roofs after a natural disaster, insurance has enabled society to take risks and make progress.
Right now, though, insurance is at a critical juncture.
Some risks are becoming too risky for insurers to cover, leaving individuals and insurers unsure what to do in the face of ever-worsening climate catastrophes and cybersecurity threats. Claims inflation means occurrences that remain covered in insurance policies are getting pricier for insurers to cover, and the whole industry is being pushed toward a tipping point, where they must embrace digital ecosystem enablement or become obsolete.
InsurTech/M&A/Finance💰/Collaboration
![11 insurtech investors with the highest investment in 2022](https://dxj7eshgz03ln.cloudfront.net/production/link/image/846759/twenty_by_nine_extra_large_7ee62955-dce9-4eb8-9348-fce7280dedb1.jpeg)
11 insurtech investors with the highest investment in 2022
EDITORS' PICK Complimentary access to top ideas and insights — curated by our editors.
The top five insurtech investors had a cumulative investment amount of more than $2 billion in 2022. Their average investment amount was $578,722,000.
Scroll through to see which investors made the top 11 and their level of activity in 2022.
Source: Gallagher Re Global Insurtech Report, February 2023
InsurTech Perspective: Our Turn to Stand by SVB
Just before a group of big banks extended a $30 billion lifeline to First Republic Bank last Thursday, a five-year-old InsurTech offered its support to Silicon Valley Bridge Bank, the successor of the failed bank that catered to startups.
In the banking sector, U.S. regional banks like First Republic and international banking giant Credit Suisse struggled with their own problems late last week as contagion fears swelled in the wake of the earlier Silicon Valley Bank and Signature bank collapses.
Back in the insurance sector, as follow-on banking troubles were playing out, Vouch, an InsurTech that writes directors and officers liability and other commercial insurance lines for venture-backed technology startups, pledged to allocate “a significant portion of its corporate funds to SVB, backed by the FDIC’s full backstop.” (Read more about continued troubles in the banking sector in related article, “Too Soon for ‘All Clear’ in D&O Insurance Market“)
Vouch announced its intention to continue working with the Silicon Valley Bank team and support the newly created Silicon Valley Bridge Bank, N.A (SVBB NA) “to demonstrate its confidence in the institution,” the company said in a statement on its website. The statement was preceded by several social media announcements from Co-Founder Travis Hedge.
Amica Partners With Canopy Weather for Additional Tornado Data
Amica Mutual Insurance, a leader in auto, home and life insurance, is partnering with Canopy Weather to further monitor the impacts of tornado damage and enhance service to its policyholders.
Insurance companies must rapidly gather information on the size, scope, extent and potential impacts of a tornado in order to efficiently respond to an event.
“By using Canopy’s data, we’re able to proactively reach out to impacted policyholders and quickly plan an appropriate response,” said Brian Leroux, Claims Innovation Supervisor at Amica.
![battleface partners with BringFido to bring worry-free travel with your furry friend](https://dxj7eshgz03ln.cloudfront.net/production/link/image/846758/twenty_by_nine_extra_large_3fbcacf1-2b25-422b-bc70-36d324f5168e.png)
battleface partners with BringFido to bring worry-free travel with your furry friend
Travel Insurance provider battleface today announced its partnership with BringFido to provide pet travel insurance coverage.
Designed specifically to protect pets and their owners while traveling domestically or internationally, the partnership will offer BringFido customers with protection options if the unexpected happens to pets and their owners while traveling together.
Traveling with pets can be tricky, which is why BringFido and battleface have teamed up to provide important coverages for pet owners who plan to travel with their furry friends.
There has been a huge surge in pet ownership in the U.S in recent years, with 70% of households owning some type of pet. As pet owners increasingly consider their furry friends as part of their families, it is no surprise that more and more people are choosing to take their pets with them when they travel. As exciting as it is to bring your pet on a trip, it’s important to be prepared for unexpected, costly accidents or illnesses.
Driver Technologies Research Shows Dash Cams Significantly Improve Driver Safety
In Plato’s Republic, Socrates tells the story of the Ring of Gyges, which makes its bearer invisible. A Lydian shepherd who finds the ring goes on to seduce the king’s wife, murder the king and take control of his kingdom. Socrates deduces from the story that “no one is just of his own will but only from constraint.” In all likelihood, J.R.R. Tolkein read the Republic, as he tells a very similar story with a very similar moral. No doubt people often also feel compelled to do the right thing whether anybody’s looking or not, but they’re likely to be on their best behavior if they’re being watched. This is at least one of the reasons for using dash cams to reduce risky driving in commercial fleets as a loss control measure. Last week we shared a conversation with Cover Whale president Kevin Abramson, who reported that the company’s study of its internal data showed a reduction of 7 loss ratio for insureds who used dash cams. We see the hypothesis further supported through internal research from Driver Technologies, Inc. (Brooklyn, New York), an AI-based mobility tech company.
Events
InsurTech Chicago, April 12, 2023
InsurTech is helping the insurance industry move toward its digital future. Join as thought leaders and experts discuss the latest trends.
Join one of North America's newest insurtech communities, InsurTech Chicago, for an evening of networking and light programming. The world of insurance technology is always evolving, and on April 12, practitioners and experts will discuss some of the latest trends.
Agenda:
- 5:30 - 6:30 - Registration & Networking
- 6:30 - 6:40 - Event Kickoff
- 6:40 - 6:50 - Presentation: TBA
- 6:50 - 7:30 - Panel Discussion: InsurTech Trends
- 7:30 - 7:40 - Wrap Up
- 7:40 - 8:30 - Networking