Research
After Years of Losses, Florida Insurers Saw Underwriting Profits in 2024, AM Best Says
After eight years of losses, Florida’s personal property insurance market reported an underwriting profit and a considerable jump in operating income in 2024, the AM Best rating and analytics firm said in a report this week.
The firm examined 45 insurers that have written most of the personal property insurance in the state, including some that went insolvent in recent years but excluding large national carriers. Of those 45, the active Florida insurers, excluding the state-created Citizens Property Insurance Corp., reported a combined ratio of 93.1 for 2024, improved from almost 100 for the prior year. Underwriting gains rose to $207 million in 2024, compared to a loss of $174 million the year before, AM Best noted.
Climate/Resilience/Sustainability
What to expect as the 2025 hurricane season begins
[Editor's comment: Happy first business day of June. With summer solstice just 18 days away, hurricane season officially began yesterday. At present, there is no activity as forecasters call for a busy season]
Hurricane season officially began yesterday, threatening to bring dangerous weather to as many as 200 million people in the U.S. through the end of November. Here’s what to know.
A busy season: NOAA forecasters predict an above-average season, with a 60% chance of 13 to 19 named storms, up to 10 of which are expected to become hurricanes. However, the season is off to a quiet start so far. [CBS News/Fox Weather]
Federal cuts: Experts have worried that the large-scale staff reductions, travel and training restrictions and grant cutoffs at FEMA and NOAA since President Trump took office may affect disaster response — though the agencies say they’re prepared. [AP]
Global risk data reveals cities most vulnerable to climate disasters
Extreme weather is increasingly encroaching on urban centers worldwide.
Some of the world's preeminent cities including London, seen here, are at high risk of fire or flood damage, according to Guidewire HazardHub data.
From wildfires threatening Athens to floods inundating major U.S. cities, “big cities including Dallas, Lisbon, Sydney, and Cape Town are what some scientists refer to as ‘sitting ducks,’” according to a recent Financial Times article that examined places where “climate and geographical conditions mean they are extremely vulnerable to global climate risks and disasters.”
The article explores a sobering reality: Extreme weather is increasingly encroaching on urban centers worldwide.
The article, titled “Wildfire near Athens observatory underscores rising risks to global cities,” examines the twin threats of wildfire and flooding by looking at conditions in Athens, Greece and several cities in the United States, including Dallas, Texas. It draws from international risk data, including data from Guidewire HazardHub, to examine where future climate disasters may strike and how awareness and improved data can help mitigate these risks.
Prepare now: Homeowners along coast, inland urged to strengthen homes with IBHS Hurricane Ready guidance
At the traditional start of hurricane season, the Insurance Institute for Business & Home Safety (IBHS) advises both coastal and inland homeowners to take steps now using its research-based Hurricane Ready guidance to prepare their homes ahead of the next storm.
While homes closer to the coast are at higher risk of experiencing the full force of a hurricane, Hurricane Helene's 500-mile path of destruction across the Southeast last year served as an example of the severe structural damage that can result from sheer wind force and catastrophic inland flooding. The 2024 hurricane season brought the third-highest number of tornadoes from tropical storms and caused major inland damage, highlighting the need for preparedness in all areas.
"Storms don't just impact the coastline – high winds, heavy rain and flooding can cause significant damage far inland. Taking proactive mitigation steps now can make all the difference," said Sarah Dillingham, IBHS senior meteorologist. "Hurricane preparation isn't just about staying safe during the storm – it's about ensuring your family, home and community can recover quickly afterward. Preparedness today means resilience tomorrow."
IBHS researchers have identified science-backed actions to strengthen vulnerable areas of buildings against high wind and heavy rain. Larger projects like re-roofing to the FORTIFIED standard, installing hurricane shutters or upgrading to a wind-rated garage door may require more time or resources and should be tackled now.
Resilience begins with the roof, which is the first line of defense against severe weather. If the roof is compromised during a storm, it often leads to significant structural damage and interior water damage. Homeowners should prioritize having their roof inspected and repairs made if needed.
Commentary/Opinion
LA wildfires won't affect reinsurer appetite or growth plans at June 1: Guy Carpenter - Reinsurance News
Discussing how the Florida-focused June reinsurance renewals are shaping up, Randy Fuller, Managing Director, Guy Carpenter, the reinsurance broking arm of Marsh McLennan, has suggested the California wildfires in Q1 are not expected to have a meaningful impact on reinsurer appetites or growth plans.
During a webinar hosted by AM Best, Fuller noted that with June 1 just days away, most of the firm’s programs are either complete or nearly finalised.
“Overall, I’d say this Florida renewal season is behaving pretty similarly to what we’re seeing in the broader property cat market. There’s plenty of capacity and growth appetite for reinsurers, but I’d say we’re still seeing reinsurers generally maintaining a disciplined approach to growth,” Fuller said.
He continued, “With the California wildfires, there were some initial questions about where the trajectory of the market was going to go, whether those impacts might influence reinsurer appetites in Florida and other places for the rest of the year. At the end of the day, it doesn’t look like we’re going to see the wildfires having a meaningful impact on reinsurer appetites or growth plans.
The Businesses Insurers Are Overlooking | Insurance Thought Leadership
Outdated insurance models won't cover innovative small businesses. A fresh approach to risk assessment and coverage accessibility is needed.
Today's unconventional solopreneur may be tomorrow's regional success story — that's why we need more inclusive underwriting.
Insurance is a safety net many take for granted—until they realize they've been excluded from it.
For countless small businesses across the U.S., securing coverage isn't just a bureaucratic hurdle. Instead, it's a barrier to entry. Without insurance, a budding business can't bid on contracts, rent space, or even get off the ground. Yet, many are shut out because their business models don't fit neatly into a traditional underwriting box.
As an industry, we have a duty and an opportunity to do better.
Having spent much of my career in insurance product development and underwriting, I've seen the mechanics of risk evaluation up close. I've also seen how legacy approaches can leave unconventional businesses out in the cold. From part-time side hustles to gig-driven enterprises, the insurance industry often struggles to keep pace with the changing nature of entrepreneurship. This is where innovation and inclusivity must intersect.
We're often likely to insure individuals' passions that happen to develop into businesses. For instance, we insured a young man's lawn mowing business that evolved into a thriving business. He started the business before even entering high school, and most insurance carriers would have rejected him for not having enough years of experience. If we had relied on conventional underwriting rules that required three-plus years of experience to get a policy, we would have extinguished his passion before it even began.
Scott Aiello is vice president of commercial strategy at Simply Business.
News
California creates smoke damage task force
Multiple lawsuits have been filed for denial of smoke damage claims from the LA wildfires.
Policyholders whose homes survived the LA wildfires say soot and chemical residue have made them uninhabitable.
California Insurance Commissioner Ricardo Lara has formed a new task force to create standards for smoke damage insurance coverage and clean-up.
The task force will evaluate and recommend best practices for inspecting and remediating smoke-damaged properties and develop statewide standards for insurers.
The announcement follows multiple lawsuits against California’s FAIR Plan alleging failure to investigate and pay smoke damage-related claims following the LA wildfires in January.
“For more than 30 years, California has lacked consistent statewide standards for investigating and paying smoke damage claims,” Lara said in a statement. “The result is confusion, delays and families forced to return to unsafe homes. Consumers are angry and rightly so. Californians deserve better — and this task force will help us create lasting solutions.”
Lara previously issued a bulletin in March requiring insurers to investigate and pay all legitimate smoke damage claims. He also sent a specific directive to the California FAIR Plan, requiring it to follow the same standards.
Since then, however, multiple policyholders have filed lawsuits against the FAIR Plan alleging illegal denial of coverage for smoke damage. Though their homes survived the fires, the policyholders say the interiors are coated in soot and chemical residue, rendering them uninhabitable.
Two weeks ago, another smoke damage lawsuit asked for a public injunction requiring the FAIR Plan to turn over its inspection records to all insureds.
According to the suit, the FAIR Plan has already faced smoke damage-related lawsuits for similar denials following other wildfires.
AI in Insurance
Past, Present, and Future of AI in Claims
The digital transformation occurring throughout all levels of the claims management industry is not new. It began years ago and is just now beginning to truly shake up this sector.
At Sedgwick, we have been focused on the next generation of digital tools, but it's critical to understand where we've been, where we are now, and where we're going. If companies want to ensure they are maximizing this exciting new technology.
Where We've Been
The claims industry has been leveraging analytical AI for years at this point, such as in predictive modeling programs. More recently, the advent, and rapid adoption, of generative and agentic AI have emerged as key differentiators for third-party administrators (TPAs). Understanding how companies can leverage this technology, and creatively and effectively apply it to different lines of business to drive new and improved outcomes, will be a deciding factor in terms of success.
Most companies in our industry started in the same place when generative AI burst on the scene two and a half years ago: document summarization. While we were all starting to recognize the power of generative AI, that technology began to evolve at exponential speed. Everyone learned to fail fast in this space and spent significant time understanding the new features as they came out every month. Many companies introduced initiatives using data extraction and analysis from claims-related documents, while others explored whether large language models (LLMs) could support automated customer support options. Keeping up with AI's advances drove IT teams to prototype rapidly, but generative AI itself prompted companies to re-evaluate their initial use cases every day.
What did we learn? The keys to success haven't changed: Robust data sets, data science maturity to understand what the data means, and industry-leading claims practice are still the critical components to establish a foundation for digital transformation of the industry. MORE
Leah Cooper is the chief digital officer for Sedgwick.
Gavel to Gavel: AI driven decisions in insurance and risks of liability
The use of artificial intelligence algorithms is increasing across insurance markets but poses real and specific risks of liability for companies attempting to streamline decision making.
The use of artificial intelligence (“AI”) algorithms is increasing across insurance markets but poses real and specific risks of liability for companies attempting to streamline decision making. For example, health insurance companies are under significant scrutiny for their use of algorithms in determining coverage. Algorithms are essentially a set of instructions that tell a computer how to operate on its own and are especially useful for industries that must process voluminous amounts of data and render decisions. Though AI is touted for increasing productivity, it is also susceptible to bias and may generate more risks than benefits.
For insurers, AI can be helpful in evaluating risks, e.g. predicting the likelihood of future claims, as well as setting policy pricing and detecting fraud in insurance applications. However, major insurance companies are facing lawsuits resulting from the use of AI algorithmic tools in underwriting and claims processing. A class action lawsuit against Cigna Health and Life Insurance (“Cigna”) is ongoing in the United States. There, the plaintiffs allege Cigna utilizes an algorithm-based tool called PxDx that reviews health insurance claims and compares procedure codes with Cigna’s list of approved diagnosis codes for that procedure. Id. at *1.
The plaintiffs contend that the use of this algorithm resulted in the denial of claims for medically necessary procedures without actual review by a medical director or physician, as required by California law. Id. at *2.
Taylor Wewers Bagby is an associate at Hall Estill’s Tulsa office.
InsurTech/M&A/Finance💰/Collaboration
10 largest US insurtech equity deals of Q1 | Digital Insurance
The three largest U.S. insurtech equity deals of the first quarter of 2025 had an average funding round of $101 million. In total, all 10 of the top insurtech equity deals earned $542 million in funding in the first quarter.
Read more about the ten biggest U.S. insurtech equity deals as of March 31
Source: CB Insights
If P&C Insurance Goes Live on Socotra With Embedded Car-Sharing Product
Socotra’s Flexible Core and Open APIs Enabled If P&C Insurance to Self-Implement Product in Only Five Months
Socotra, the leading provider of insurance core technology, announced today that If P&C Insurance (If), the largest property and casualty insurer in the Nordic region, has successfully launched a car-sharing insurance product on Socotra’s cloud-native platform in only five months. By leveraging Socotra’s flexible core and open APIs, If has rapidly expanded into new geographies and customer segments.
As the largest P&C insurer in the Nordics with $7 billion in gross written premiums (GWP), If has established a reputation for innovation and agility in the insurance industry. With its innovative new car-sharing insurance product, If further strengthens its position within the sharing economy. The fully embedded and API-first solution enables a seamless digital journey for end users, providing peace of mind through customizable features such as on-demand coverage, usage-based pricing, and deductible reduction. This ensures tailored protection precisely when needed, specifically benefiting car-sharing platforms and their users.
"Choosing Socotra was a strategic decision that allowed If to go live quickly while maintaining autonomy," said Erik Granmar, CEO of Insrt AB, a subsidiary of If P&C. "Socotra’s powerful and flexible policy core empowered our team to easily self-implement an embedded insurance product and connect it to an ecosystem of technology. By partnering with Socotra, If can deliver new products faster and more efficiently, positioning us for greater success in the Nordic and Baltic markets."
Claims
Cars Are Getting Smarter. Why It Matters for Claims Professionals
Cars of today are more than just forms of transportation; they are mobile data hubs. Not only is the modernization of cars making life easier for people driving to work, dropping the kids at school, or going on road trips, but it is also greatly benefiting claims professionals and claimants themselves when accidents or other incidents arise.
The world of automotive vehicle forensics is complex, nuanced and rapidly evolving. While cars vary in shape, style, and speed, an underlying common characteristic in today’s world is their plethora of data that can help us as claims professionals—by way of event data recorders (EDR), infotainment data and in-vehicle cameras.