Investment management company sees opportunities for Auto manufacturers in $179 billion personal auto insurance market  January 13th 2023

Conning Report Says Auto Insurance Ripe for Disruption as Vehicle Manufacturers Enter Business

Investment management company sees opportunities for Auto manufacturers in $179 billion personal auto insurance market.

Conning, the investment management firm serving the insurance industry, says in a new report that embedded insurance, through which insurance products are distributed by non-insurance brands, could make significant inroads into both personal lines and small commercial insurance business, exceeding $70 billion in premium by 2030.

According to the report, the $179 billion personal auto insurance market could be ripe for disruption if manufacturers were to bring insurance in-house, as Tesla, Toyota, General Motors and some other vehicle manufacturers are doing.

Sfara Technologies Selected for Project to Improve German Road Safety

[Ed. note: recently announced] CCC and Sfara Help Insurers Connect Accident Data to Claims

Sfara is one of several key players selected and funded by the German state of Hesse to explore developing a smartphone-based, multimodal traffic warning system for real-time accident avoidance. Sfara is working jointly with its research partner Deutsche Telekom and other logistics leaders.

Sfara brings to the project its expansive experience in industry-leading crash detection technologies and smartphone-based Telematics for multimodal applications. The project is the logical progression from a passive state to an active safety approach for smartphones, and is based upon advanced patents awarded in this space, which can be used to avoid accidents between road users of all kinds.

NHTSA: Car crashes cost Americans $340B, or $1,035 per person

A comprehensive study released by the NHTSA on Tuesday found that vehicle crashes cost American society $340 billion in 2019. The study calculated the total societal cost of car crashes, borne by every American, not just those directly involved in car crashes. The total translates to $1,035 in extra costs incurred by each and every American due to increased medical and automotive insurance premiums for everyone, property damage, lost market productivity, and increased taxes to fund public services like first responders.

The sweeping report separately calculated the loss of life costs to society based on the 36,500 traffic fatalities in 2019, as well as in cases of severe injury. That amount was estimated to be an additional $1.37 trillion.

Both traffic crashes and fatalities increased in 2020 and 2021, in gross terms as well as based on fewer miles driven due to the pandemic. A total of 42,915 people died in motor vehicle crashes in 2021, marking a 10.5% increase from 2020 (38,824) and the most deaths since 2005. Data for 2022 hasn't been finalized yet.

The NHTSA completed a similar study in 2010 and concluded that the total cost to American society of vehicle crashes totaled $242 billion. That's an increase borne by society as a whole of 40%. In addition to the drivers, passengers, pedestrians, and cyclists killed in 2019, the NHTSA reported that 4.5 million people were injured in vehicular crashes, which damaged 23 million vehicles.

“This report drives home just how devastating traffic crashes are for families and the economic burden they place on society,” Ann Carlson, NHTSA’s Acting Administrator, said in a statement

NTSB Chair Raises Safety Concerns About Heavy Electric Vehicles

U.S. National Transportation Safety Board Chair Jennifer Homendy on Wednesday raised concerns about the increased risk of severe injury and death from heavier electric vehicles on U.S. roads.

She cited a General Motors GMC Hummer EV that weighs over 9,000 pounds, up from about 6,000 pounds for the gasoline version, and the Ford F-150 Lightning, which is between 2,000 and 3,000 pounds heavier than the non-electric version.

The heavier weight “has a significant impact on safety for all road users,” she said Wednesday in a speech. “We have to be careful that we aren’t also creating unintended consequences: more death on our roads.”

GM said “safety is at the cornerstone at everything we do. All GM vehicles are engineered to meet or exceed all applicable motor vehicle safety standards.” Ford did not immediately comment.

Homendy’s comments come as the U.S. has seen a sharp rise in traffic deaths since the start of the COVID-19 pandemic and U.S. vehicles get keep getting larger on average.

LexisNexis Telematics OnDemand Wins 2023 IoT Breakthrough Award for Connected Car Insurance Innovation | WebWire

IoT Breakthrough, a leading market intelligence organization that recognizes the top companies, technologies and products in the global Internet-of-Things (IoT) market, announced that it has selected LexisNexis® Risk Solutions, a leading provider of data and analytics for the insurance and automotive industries, as winner of “Connected Car - Insurance Solution of the Year” award in the 7th annual IoT Breakthrough Awards program, honoring the breakthrough innovation of the LexisNexis® Telematics OnDemand solution.

LexisNexis Telematics OnDemand helps insurers to have more scalable, convenient access to robust, normalized driving behavior attributes for their customers in a source-agnostic platform. The solution assists insurance carriers with the ability to price policies more accurately at their first interaction with a consumer and deliver driving behavior data from participating automakers, including General Motors and Mitsubishi Motors, aftermarket devices and third-party telematics service providers. The driving behavior data is normalized, producing common attributes and scores that can be used throughout the insurance workflow.

When consumers engage with their automaker for connected services, they can take advantage of the option to share their telematics-based driving behavior data. By opting in to share their driving behavior data, the consumers can receive more personalized insurance pricing, participate in safe driving reward programs or tap into other value-added services.

“We’re thrilled to accept this award from IoT Breakthrough. LexisNexis Telematics OnDemand is designed to deliver timely, normalized driving behavior data so that consumers may benefit from their telematics driving behavior data at the point of quote or renewal,” said Adam Hudson, vice president and general manager, U.S. Connected Car, LexisNexis Risk Solutions. “Consumers’ personal driving behavior data is virtually portable, allowing them to take advantage of their good driving habits when shopping with any insurer using our solution. And in turn, insurers can use the latest telematics data to help better price policies which could improve customer loyalty.”

Munich Re: Natural disasters caused losses of $270B in 2022

Global natural disaster losses in 2022 totaled $270 billion USD, according to a recent report from Munich Re. Around $120 billion of these losses were insured, which comes in above the average of $97 billion in insured losses from 2017 to 2021.

Weather events caused the most damage, and Hurricane Ian – which hit parts of the United States and Cuba in September – was the most costly event worldwide, causing total losses around $100 billion.

“Climate change is taking an increasing toll,” Munich Re Board of Management member Thomas Blunck said in a release. “The natural disaster figures for 2022 are dominated by events that, according to the latest research findings, are more intense or are occurring more frequently. In some cases, both trends apply. Another alarming aspect we witness time and again is that natural disasters hit people in poorer countries especially hard. Prevention and financial protection, for example in the form of insurance, must therefore be given higher priority.”

Other than Hurricane Ian, Munich Re reports the most costly natural disasters worldwide in 2022 included:

Closing the insurance coverage gap in risky coastal areas

With climate change intensifying and coastal areas becoming increasingly affected, how will people in those areas secure insurance coverage?

The lack of robust coverage options in coastal regions is a result of many insurers leaving these areas due to the high risks involved.

The coastal insurance landscape

There has been a significant exodus of insurers and reinsurers from the market as a result of increasingly costly catastrophic climate events. Consequently, many homeowners are unable to obtain suitable insurance coverage.

In Florida, the problem is especially pronounced. When Hurricane Ian hit the Sunshine State in September 2022, the Florida insurance market was already in a state of crisis. The damage caused by this Category 4 storm is estimated to be as high as $65 billion. Aside from Hurricane Katrina, it was the second most expensive natural disaster in U.S. history.

It’s estimated that just 18% of Floridians have flood insurance in a state that’s one of the most vulnerable to disastrous flooding.

Ignite CEO on what's holding back further innovation in insurance

Turning challenges into opportunities is coded into the very DNA of Ignite Systems, which enjoyed its first full year as a Verisk business in 2022. And building out a successful policy administration system has been no mean feat according to CEO Toby MacLachlan (pictured), particularly considering the turbulent road to gaining credibility with brokers and insurers alike while simultaneously keeping up with the wider market and the latest tech.

“You can see why there aren’t too many players in this space, and why a lot of them fall at the first hurdles,” he said. “But I think you have to look upon these challenges within the industry as opportunities otherwise you’d quit and give up.”

Last year was a strong year of growth for the Ignite team, which increased its team by 21% in Q3 alone and now commands a team of some 50 teammates. The other key area of growth, he said, was that of furthering its insurance panel now that Ignite is a known name with backing from both big insurers and some top-50 brokers.

“We signed three new clients in the last quarter, which has been great and they are in implementation at the moment,” he said. “What has also been gratifying is our progress with insurers and getting access to insurers’ rates through IHP integration - which is a really difficult thing to achieve as a software house, to be sufficiently high up on their list.