Research
The $43 Billion Opportunity Hiding in Plain Sight
This report is worth the read if you are engaged in the auto industry for insurance.
The auto insurance industry is adapting to the current market dynamics characterized by a slowdown in new car sales, a shift toward used vehicles, and increased demand for ancillary products through several strategic and operational adjustments:
- Focus on Used Car Market: As new car sales decline, insurers are increasingly targeting the used vehicle segment. This includes offering tailored policies for used cars, which often have different risk profiles and repair costs. Insurers are also leveraging data analytics to better assess risk and pricing for used vehicle owners.
- Extended Warranties and Service Contracts: The rise in used car sales has driven demand for extended warranties and service contracts. Insurers and third-party providers are expanding their offerings in this space, often bundling these with insurance policies to create comprehensive protection packages that appeal to cost-conscious consumers.
Growth in Ancillary Products: Products like payment protection, tire insurance, and gap coverage are seeing increased sales. Insurers are capitalizing on this trend by cross-selling these products during policy purchase processes, often through digital channels, to enhance revenue streams and customer retention.
Digital Transformation and Data Utilization MORE/REPORT LINK
- Pricing and Underwriting Adjustments
- Customer Engagement and Retention Strategies
- Partnerships and Distribution Channels
Overall, the industry is shifting toward a more diversified product portfolio, leveraging technology, and focusing on customer-centric strategies to navigate the challenges posed by the current automotive market landscape.
Phil Hobson, Managing Director - International Affinity Leader at Marsh AND Yuri Poletto, the Open and Embedded Insurance Observatory, a global community of insurance and non-insurance brands involved in embedded insurance and open insurance.
TransUnion: Aggressive Shopping Continues for Home, Auto Coverage
More and more consumers are looking for lower prices to protect their investments as the costs of owning both properties and vehicles continue to rise.
According to the Q3 2025 Insurance Personal Lines Trends and Perspectives report from TransUnion, customers and potential customers are aggressively shopping for auto and property insurance. During Q2 2025, auto shopping was up 17.6% and property up 9.2% year over year.
Top Reinsurer Rankings Reshuffled to Reflect Adoption of New Accounting Standard
Market leaders maintain strong performance despite record $320 billion in global natural catastrophe losses, AM Best reports.
Swiss Re’s transition to IFRS 17 accounting standards has significantly reshuffled the rankings of the world’s largest reinsurers, moving the company from first place among traditional reporters to the top spot among IFRS 17 adopters, while the overall market delivered double-digit returns on equity despite facing over $320 billion in worldwide natural catastrophe losses, according to AM Best.
IFRS 17 is the International Financial Reporting Standard for Insurance Contracts that became effective in January 2023, fundamentally changing how insurance and reinsurance companies measure, recognize, and disclose insurance contract liabilities. The difference in accounting means the results of IFRS 17 and non-IFRS 17 reinsurers are not directly comparable, requiring a separate ranking, AM Best explained.
Market Hardening Delivers Strong Results Amid Record Losses
The global reinsurance market continued to benefit from the dramatic hardening that began in January 2023, with reinsurers maintaining strong underwriting discipline and favorable terms through renewal periods, the rating agency said. This market strength proved resilient even as natural disasters reached severe levels in 2024, with insured losses exceeding $140 billion globally.
News
Farmers Insurance Data Breach Impacts Over 1 Million People - SecurityWeek
Farmers New World Life Insurance and Farmers Group have filed separate data breach notifications with state authorities.
According to its website, Farmers Insurance serves roughly 10 million households (19 million insurance policies) across the entire United States, offering car, property, life, commercial and other types of insurance. The insurer has approximately 48,000 agents and 21,000 employees.
Farmers New World Life Insurance and its parent company Farmers Group, which is a subsidiary of Zurich Insurance Group, have filed separate data breach notifications with state authorities.
The notifications reveal that Farmers Insurance was not directly targeted by hackers. Instead, the insurer learned from a third-party vendor on May 30 that it had detected unauthorized access to a database containing Farmers customer information.
Tesla rejected $60 million settlement before $243 million Autopilot verdict - Business Insurance
Billionaire Elon Musk’s electric vehicle company Tesla rejected a $60 million settlement proposal in a lawsuit over the 2019 fatal crash of an Autopilot-equipped Model S before a jury this month awarded a $243 million verdict in the case.
Lawyers for the plaintiffs disclosed the settlement proposal in a filing on Monday in the federal court in Miami, Florida, as part of a request for legal fees from Tesla.
They said Florida law entitles them to the legal fees the plaintiffs accrued since May 30, when the settlement was proposed.
The trial focused on an April 2019 crash involving a 2019 Model S featuring Autopilot driver-assistance software. The driver’s Tesla struck the victims’ parked Chevrolet Tahoe as they were standing beside it on a shoulder.
Jurors awarded the estate of Naibel Benavides Leon, who was killed, and her boyfriend Dillon Angulo, who was seriously injured, a combined $129 million in compensatory damages, plus $200 million in punitive
Jurors found the driver liable for 67% of the compensatory damages, but he was not a defendant.
AI in Insurance
Leading Insurance Brokerages Embrace AI Revolution
Performance gaps widen between firms embracing artificial intelligence tools and those lagging behind, agency benchmarking study finds.
Insurance brokerages are experiencing a dramatic divide in performance based on their artificial intelligence adoption, according to the 2025 Best Practices Study from Independent Insurance Agents & Brokers of America (Big “I”) and Reagan Consulting.
Since ChatGPT’s release in November 2022, generative AI is rapidly transforming insurance brokerage operations, according to the report.
The data reveals a clear correlation between firm size and AI investment, with 84.2% of brokerages over $100 million in revenue having invested in generative AI, compared to 60% of firms in the $25-100 million range. These larger organizations are leveraging their scale and complexity to integrate AI into core workflows, achieving measurable returns on investment, the report noted.
Research by Reagan Consulting examining Broker Tech Ventures partner firms.
InsurTech/M&A/Finance💰/Collaboration
Applied Home taps ZestyAI for climate risk analytics
ZestyAI, an AI-powered property and climate risk analytics provider, has formed a partnership with Applied Home National Underwriters, a U.S. property insurance underwriting specialist.
Applied Home National Underwriters will integrate ZestyAI’s regulatory-approved models and property insights to enhance underwriting accuracy, pricing, and portfolio management, according to FF News.
The suite includes peril-specific models such as Z-Water™ for non-weather water, Z-Fire™ for wildfire, Z-Hail™ for hail, Z-Wind™ for wind, and Z-Storm™ for severe convective storms. ZestyAI also delivers insights combining aerial imagery, building permits, and parcel-level data to flag roof condition, vegetation overhang, and other risk-relevant features.
Climate/Resilience/Sustainability
When Luck Runs Out: Where $100B Hurricanes Might Happen
Lists published every hurricane season, adjusting the amounts of insurance losses for past events for inflation to current-dollar levels, give a misleading picture of the potential for a single event costing insurers $100 billion.
Karen Clark & Company (KCC) offered that assessment in a new white paper, “The $100 Billion Hurricane: How and Where it Can Happen.
The paper identifies five past events that would result in over $100 billion in losses today—including one that would top $200 billion—by adjusting for property exposure changes.
20 years after Katrina, hurricane risks to Gulf Coast rising, scientist warns | Reuters
The Gulf Coast of the United States is increasingly vulnerable to hurricanes, a scientist has warned in a new study, 20 years after Katrina devastated New Orleans and hundreds of miles of coastline.
Mark Bove, a meteorologist with the German reinsurer Munich Re (MUVGn.DE, warned in his review, seen by Reuters, that the risk of major hurricanes in the region making landfall is growing with time and the effectiveness of post-Katrina flood defense systems will fade.
Payments
Klear.ai Adds Carepay Technology to Claims Platform | Insurance Innovation Reporter
The integration embeds digital disbursements into Klear.ai’s system, enabling insurers and TPAs to issue payments without leaving the platform.
Klear.ai (Cypress, Calif.), a provider of AI-driven policy, claims, risk, and analytics software, has integrated Carepay (Nashville, Tenn.) digital payment technology into its claims platform.
The integration allows insurers, TPAs, self-insured employers, and risk pools to issue disbursements via ACH/EFT, virtual card, or check directly within Klear.ai’s system. By embedding payments into the workflow, the companies aim to reduce manual steps, eliminate the need for external portals, and speed up claims settlement.
“Integrating with Klear.ai allows us to bring intelligent, embedded payments directly into the claims process—without disrupting existing workflows or requiring long implementations,” says Todd Boring, CEO, Carepay. “We’re aligned in our mission to make risk and claims operations more connected and scalable.”
Curators' Corner: Alan Demers and Stephen Applebaum
Curator’s Corner
A selection of our most popular recent thought leadership articles:
OPEN LETTER TO ILLINOIS SECRETARY OF STATE & THE AUTO INSURANCE INDUSTRY AT LARGE
The precise setting of auto insurance premiums has long been an elusive challenge for insurance carriers and problematic for consumers and regulators alike. In the absence of a better method, ratemaking continues to be part art, part science establishing price for the cost of product only to be accurately determined in the future. While the industry strives for fairness and accuracy it is generally accepted as inexact.
INSURANCE ECOSYSTEM: NAVIGATING A NEW AND UNFAMILIAR WORLD
Partnerships, collaboration, and trust matter now more than ever
REAR VIEW MIRROR REVEALS DIRECTION OF THE P&C ECOSYSTEM
It’s been a wild and bewildering few years in our industry and almost everything seems to be in flux as leaders are seeking some reliable sense of what to expect so they can strategize and plan effectively. Three consecutive years of rate increases have taken a toll on consumers and businesses but has achieved the desired goal of profitability. At least for now as insured losses from catastrophe events across the globe in the first half of 2025 increased to almost $100 billion, which marks the second highest recorded after 2011’s, $140 billion according to an AON report. These figures are up from $71 billion in H1 2024 and are threatening, especially as hurricane season has yet to peak.
Canada
Desjardins Group strengthens insurance leadership | Insurance Business Canada
The company is moving to sharpen its focus on insurance
Desjardins Group has placed insurance at the core of its latest leadership changes, naming Chantal Gagné as executive vice-president of life and health insurance, while reaffirming Valérie Lavoie in her role as executive vice-president of property and casualty insurance.
The moves come as Denis Dubois prepares to take office as president and chief executive on September 2.
Gagné, who has been with Desjardins for 18 years, began her career in property and casualty insurance before working in actuarial services, underwriting and claims. Over the past five years, she has played a central role in transforming the group’s life and health insurance division, positioning it to meet changing member and client needs.
Meanwhile, Lavoie continues to oversee property and casualty operations, maintaining continuity in a core business line where Desjardins is a market leader. Together, the appointments highlight the central role of insurance in the group’s growth strategy as it enters a new phase under Dubois’s leadership.