'Connected' Headline of the Day
Memorial Day 2025 in the United States
[Editor's note: Our sincere gratitude to the men and women who made the ultimate sacrifice so we may enjoy our special freedoms. 'Connected' will observe the holiday and resume on Tuesday, May 27th]
Originally known as Decoration Day, Memorial Day began after the Civil War as a way to honor Union soldiers who had died in the conflict.
The holiday’s name came from the tradition of decorating the graves of fallen soldiers with flowers. After World War I, it evolved to commemorate all American military personnel who died in any war or military action.
Today, it is observed as Memorial Day and serves as a solemn tribute to those who made the ultimate sacrifice in service to the United States.
Over time, Memorial Day became a day of national reflection and is now also seen as the unofficial start of summer.
When Is Memorial Day?
- Memorial Day is now observed on the last Monday in May. Originally, however, it was held on May 30, regardless of the day of the week.
- In 1968, Congress passed the Uniform Monday Holiday Act which moved several federal holidays, including Memorial Day, to designated Mondays—creating three-day weekends for federal workers.
- The change officially took effect in 1971, establishing the final Monday in May as Memorial Day. Still, it took time for all states to adopt the new observance, and even today, some states continue to recognize Decoration Day in their laws or traditions, reflecting the holiday’s historical roots.
How Do People Observe Memorial Day?
Many people honor Memorial Day in traditional ways, such as:
- flying the American flag at half-staff from dawn until noon
- taking part in a national moment of remembrance at 15:00 (3 pm) local time
- visiting local cemeteries and memorials to pay respect to fallen service members
- placing flowers or wreaths on soldiers’ graves
- volunteering to decorate military graves with American flags at national cemeteries
- attending memorial services, parades, and community events
News
May tornado outbreak triggers record losses – Guy Carpenter
A tornado outbreak between May 15 and 18 has resulted in widespread damage across Kentucky, Missouri, Illinois, and Arkansas, with three EF3 and one EF4 tornado confirmed.
Guy Carpenter said the event is likely the most expensive severe weather loss of the year to date, based on current damage assessments to homes, businesses, and public infrastructure.
Thousands of buildings were damaged in urban areas such as St. Louis, and power outages affected more than 600,000 customers across the region. In total, at least 33 tornadoes were reported during the outbreak.
Guy Carpenter noted that both economic and insured losses from the event are significant, with implications for underwriting and pricing in high-exposure regions.
As of May 18, a total of 731 tornadoes have been recorded in the United States for the year. This figure is approaching the historical record for the date and signals a severe weather season trending well above average.
Guy Carpenter expects severe convective storm activity to persist through mid-June, in line with seasonal norms. Hail and wind reports also remain elevated compared to the 2005–2015 average.
AM Best warns NOAA disaster data cutoff could hinder insurers’ response to secondary perils - Reinsurance New
AM Best, the credit rating agency, has issued a cautionary statement regarding the US National Oceanic and Atmospheric Administration’s (NOAA) decision to cease updates to its billion-dollar weather disaster database, warning that this move could significantly impair insurers’ ability to monitor and respond to escalating secondary peril losses.
The NOAA database, established in 1980, has long served as a vital resource for tracking weather events causing at least $1 billion in economic damage.
While historical records will remain accessible, NOAA will discontinue adding new data beyond 2024.
The timing is notable: both 2023 and 2024 each saw over 25 billion-dollar weather disasters—28 and 27 events respectively—far exceeding the 2010–2022 annual average of 15.
Remarkably, 2023’s figure was reached without a single NOAA-named hurricane, underscoring the rising prevalence of non-traditional, high-impact weather events.
In a related Best’s Special Report, “US Weather Event Risks Highlight Need for Stress Testing,” AM Best underscored the consequences of losing access to regularly updated data at a time when insurers are already under pressure from intensifying climate-related exposures.
The firm noted that up-to-date catastrophe data is essential for modeling risk, designing reinsurance programs, and evaluating capital adequacy in light of more volatile event patterns.
Big ‘I’ Secures Important Wins as House Passes Tax Package
Earlier today, the U.S. House of Representatives passed the “One Big Beautiful Bill Act," which includes significant tax reform. The bill was passed by a slender 215 to 214, with two Republicans voting against the measure and one GOP member voting present.
Many provisions from the 2017 Tax Cuts and Jobs Act (TCJA) are set to expire at the end of 2025 and the passage of this bill is the first step to make many of those provisions permanent.
The bill would make permanent and increase the 199A deduction for pass-through entities from 20% to 23%. With 86% of independent insurance agencies structured as pass-throughs and filing taxes at the individual rate, according to the 2024 Agency Universe Study, this is a huge win for the independent agency channel.
House Ways and Means Committee Chair Jason Smith (R-Missouri) has made this provision a priority and increasing the deduction reflects his commitment to Main Street America.
Research
What Consumers Think—and Who’s Shopping for Insurance
Tariffs. Economic volatility. Technology trends. Changing insurance market conditions.
These are all having an impact on property/casualty insurers. But how are they impacting consumers? More specifically, how are they impacting consumers’ insurance buying decisions and their opinions about interactions with personal lines insurers?
Several studies released over the past two weeks reveal that drivers and homeowners have been shopping for insurance deals. One, published by J.D. Power late last month, puts the incidence of auto insurance shopping over the past year at the highest level recorded in nearly two decades. More recent reports from KPMG and TransUnion also find consumers shopping —although not quite reaching the proportions tallied by J.D. Power. These reports also reveal changing homeownership patterns arising as different individuals across generations work to manage personal finances against a backdrop of uncertain economic trends.
Below, we summarize the key findings of all three, disclosing differences in survey time frames and respondent populations. Why are policyholders shopping? How? (What channels are they using?) Who is doing the most shopping? Which carriers give them the best experiences?
Commentary/Opinion
P&C Insurers Logged Their Best Year in a Decade While Consumers Chased Cheaper Rates | Insurify
The industry reported a net combined ratio of 96.5% in 2024. A net combined ratio of less than 100% indicates an underwriting profit, meaning insurers made more from premiums than they paid in claims.
Better underwriting results in personal lines, including auto and home insurance, drove the drastic improvement, S&P Global reported.
COVID-19-related supply chain issues, rising vehicle repair and construction costs, and natural disasters fueled more than $20 billion in annual underwriting losses in 2022 and 2023.
In response, insurers significantly raised premiums to improve margins. The cost of home insurance increased by 20% over the past two years, and car insurance rates surged by 42% in the same period, according to Insurify data.
Consumers policy shopped in record numbers as premiums skyrocketed.
Faced with major premium hikes, drivers and homeowners have begun shopping around for lower rates in record numbers.
Over the past year, 57% of auto insurance customers actively shopped for a new policy, according to J.D. Power's 2025 Insurance Shopping Study. That's the highest shopping rate in the study's 19-year history.
Home insurance shopping also hit a high, with 6.8% of policyholders comparing quotes in the second quarter of 2024, a J.D. Power survey found.
M&A breakup: Why a third of firms switch insurance brokers post-transaction | Insurance Business America
“It’s not news to brokers that companies’ insurance needs change after a merger or an acquisition.” But with dealmaking surging again in 2025, a few might be caught off guard by a striking trend.
Roughly a third (31%) of companies change their insurance brokers or carriers after a deal closes, according to a new M&A survey by Travelers. As companies reassess their operations, coverage needs, and strategic risks, business leaders find that their existing insurance relationships don’t always align with their evolving risk profile.
Joann Balous (pictured), vice president of sales and marketing for national accounts at Travelers, emphasized that the churn isn’t just about dissatisfaction: it’s a byproduct of shifting dynamics, ownership, and strategy.
“One surprising and somewhat concerning statistic was that 31% of companies changed either their broker or carrier post-transaction,” Balous told Insurance Business.
Financial Results
GM National Insurance Company reports Q1 results
GM National Insurance Company, the licensed carrier that’s part of General Motors, released its Q1 2025 results, ending the period with $9.5 million in written premiums, compared with $2.6 million in Q1 2024.
The carrier generated premiums in 14 states, up from 3 in the same quarter last year.
The company ended the period with a net underwriting loss of $15.4 million, a 19% increase compared to Q1 2024. The carrier had a gross loss ratio of 138.4% and an expense ratio of 173.5% in the quarter.
Climate/Resilience/Sustainability
Parametric nat cat rates forecast flat to -5% as interest grows outside peak perils: WTW
Parametric natural catastrophe and weather risk transfer rates are forecast to be flat to -5% down, with capacity levels continuing to increase but so too are opportunities, as the focus continues to move beyond peak perils, according to WTW, the parent of insurance and reinsurance broking group Willis.
Within the alternative risk transfer (ART) segment, the broking group sees parametric insurance and risk transfer as an area of growth, with applicability both to protection buyers and also captive owners.
Parametric solutions, “Continue to be a valuable approach, complimenting property policies and adding vital protection for loss costs limited or excluded under a property policy,” WTW explains.
In its latest spring update on the market in North America, the firm forecasts that rates for parametric nat cat protection are likely to be flat to -5% down over the coming quarter.
With insurance and reinsurance industry capital levels high and growing still there is no surprise rates-on-line for parametric solutions would face some pressure.
As a result, WTW notes on the parametric market that, “Capacity continues to increase and while established for large and complex insureds, it’s now actively targeting middle-market and smaller insureds.”
Adding that, “The middle-market segment is adopting creative strategies such as alternative program structures as well as parametric and captive solutions.”
While parametric solutions have become established for peak catastrophe perils, such as hurricanes and earthquakes, WTW explains that adoption continues to expand for other risks.
“Interest is growing for wildfires, tornadoes, hail and general weather (rain, temperature, snow) perils that can impact physical assets but also cause financial loss,” WTW said.
AI in Insurance
The Next Era of Insurance Operations | Insurance Thought Leadership
In today's fast-paced digital landscape, insurance carriers stand at a crossroads. Traditional operations—burdened by siloed systems and manual workflows—are no longer sustainable. Outdated models not only slow decision-making but also erode customer trust and inflate operational costs. The path forward is clear: Embrace intelligent, AI-driven operations that cut through complexity, deliver real-time insights, and elevate both efficiency and experience.
As featured today in Insurance Thought Leadership
Manulife Outlines Responsible AI Use at Industry Summit | Insurance Innovation Reporter
The company shared its ethical AI framework and deployment strategy at the Reuters Momentum AI Summit.
Manulife Outlines Responsible AI Use at Industry Summit
The company shared its ethical AI framework and deployment strategy at the Reuters Momentum AI Summit.
Manulife (Toronto) presented its Responsible AI Principles at the Reuters Momentum AI Summit in New York last month, detailing how the company governs the design, development and deployment of artificial intelligence across its operations.
Jodie Wallis, Manulife’s Global Chief Analytics Officer, joined other industry leaders at the event to discuss the future of AI and its role in global business. Wallis emphasizes the firm’s commitment to ethical and responsible AI, citing its alignment with corporate values and customer protection priorities.
. “We are committed to harnessing AI responsibly, ensuring it aligns to our core values and supports our mission to make decisions easier and lives better,” says Wallis. “Our AI Principles highlight the importance of ethical adoption, and we are dedicated to cultivating a collaborative environment that tackles the complexities of AI while ensuring it remains safe, trustworthy, and beneficial for all.”
Anthony R. O’Donnell, Executive Editor, Insurance Innovation Reporter
Fraud
CLARA Analytics Reveals AI as Early Warning System for Insurance Fraud
A groundbreaking CLARA Analytics study on fraud detection in property and casualty insurance claims has revealed that advanced analytical methods can accurately identify potential fraud indicators just two weeks after a claim is filed, significantly earlier than traditional approaches.
The research, completed in November 2024, analyzed 2,867 claims from 2020 to 2024 using an unsupervised machine learning approach. The study demonstrates that cohort modeling across claim development periods can effectively identify cost and treatment outliers while mapping connections between providers and attorneys that may indicate fraudulent activity.
“This research represents a significant advancement in how the insurance industry can approach fraud detection,” said Pragatee Dhakal, Director of Claims Solutions at CLARA Analytics. “By leveraging advanced analytics, we’ve shown that insurers can identify potential fraud much earlier in the claims process, potentially saving billions in fraudulent payouts.”
Key findings from the study include: Nine percent of open claims were identified as high potential for Special Investigation Unit (SIU) referral. - Michigan and Arizona showed the highest percentages of potential fraud indicators. - The model’s predictions closely matched actual SIU referrals made by adjusters but detected potential cases significantly earlier — as soon as two weeks after the first notice of loss. - Network analysis revealed important connections between attorneys and medical providers that traditional methods might miss. - The FBI estimates that insurance fraud costs the industry approximately $40 billion annually, excluding medical insurance. These costs ultimately affect policyholders through increased premiums.
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