Study says warming may push more hurricanes toward US coasts  April 13th 2023

Study says warming may push more hurricanes toward US coasts

A new study says changes in air patterns as the world warms will likely push more and nastier hurricanes up against the United States’ east and Gulf coasts. Friday's study looks more at steering currents of future storms than past research, focusing on where storms will go instead of how big or frequent they will be. The study projects that in the future extra warming in the eastern equatorial Pacific will ripple through the atmosphere to push storms in the Atlantic more eastward toward the Southeast Coast and north in the Gulf of Mexico. The Florida peninsula is projected to have the biggest risk increase.

Changes in air patterns as the world warms will likely push more and nastier hurricanes up against the United States’ east and Gulf coasts, especially in Florida, a new study said.

While other studies have projected how human-caused climate change will probably alter the frequency, strength and moisture of tropical storms, the study in Friday’s journal Science Advances focuses on the crucial aspect of where hurricanes are going.

It’s all about projected changes in steering currents, said study lead author Karthik Balaguru, a Pacific Northwest National Laboratory climate scientist.

“Along every coast they’re kind of pushing the storms closer to the U.S.,” Balaguru said. The steering currents move from south to north along the Gulf of Mexico; on the East Coast, the normal west-to-east steering is lessened considerably and can be more east-to-west, he said.

How AI regulation in insurance is taking shape

It's not new that insurance regulators are grappling with how (and how much) to regulate artificial intelligence's use in the business of insurance. This year is no different, but some of the big ideas on which regulators previously focused are beginning to inform more practical and detailed efforts to provide concrete guidance or, in some cases, actual regulatory requirements. Two developments in 2023 especially will inform the approaches that regulators will take in the years ahead.

First, insurance regulators via the National Association of Insurance Commissioners (NAIC) are drafting a model bulletin on artificial intelligence use with the aim of guiding companies in establishing governance systems and regulatory expectations for such systems. As explained during the 2023 Spring National Meeting in Louisville, Kentucky, the NAIC's Committee on Innovation, Cybersecurity and Technology is taking the lead on producing a commissioner-driven deliverable that likely will be exposed for public comment sometime this year. Much like the NAIC's AI Principles adopted in 2021, the bulletin likely will provide high-level, principles-driven guidance that will serve as a good guide for companies seeking to understand, at a minimum, what kinds of questions and information regulators will ask when seeking more information about artificial intelligence and machine learning products.

How Insurers Can Harness the Power of AI

There is a lot of talk about the insurance industry being slower to adopt new technologies, such as artificial intelligence, but Counterpart CEO Tanner Hackett and Socotra CEO Dan Woods both agreed on the latest episode of The Insuring Cyber Podcast that the industry’s conservative nature can serve as a benefit.

“I do appreciate the conservative nature of insurance,” Hackett said, speaking with The Insuring Cyber Podcast from the 2023 PLUS Cyber Symposium held this year in New York City. “You know, this is why the industry is still around. It’s because they’ve done things well for a very long time.”

Woods, who spoke with The Insuring Cyber Podcast from Socotra’s Connected PlatForum event held in New York City ahead of InsurTech NY’s 2023 Spring Conference, agreed.

Top 10 most valuable lines of insurance worldwide

These are the 10 most valuable lines of insurance globally, bringing in trillions of dollars in insurance premiums every year We humans are possessive, protective creatures. Whether it's our own mortality or the gadgets we fill our homes with, if we can lose it we insure it. Doing so gives us peace of mind that, in the worst-case scenario, we're protected against damage, theft or loss. But it also creates a multi-trillion-dollar industry with several vastly lucrative lines of insurance. So, what exactly are the world's biggest lines of insurance by market value? We've done the research and, with a little help from some of the top market research companies, we're able to count down the Top 10 most valuable lines of insurance worldwide.

Allstate pays CEO $15 million amid difficult year

Allstate CEO Tom Wilson collected $15 million in total compensation in 2022, down from $19.1 million in 2021.

Citing the company’s proxy statement filed with the SEC, Crain’s Chicago Business reported that the decrease in compensation was largely due to the annual cash bonus paid for a single year’s operating performance, which came in at 58% of Wilson's target bonus.

Since that target is three times his salary, which sat at nearly $1.4 million last year, the bonus amounted to $2.4 million.

Additionally, Wilson’s stock and options awards were at $11.2 million, increasing 6% from $10.6 million in 2021 and remaining at the board’s target level of 775% of salary.

Tips for Improving Customer Experience

Only 11% of policyholders think their insurer is among the best in providing a good experience when compared with other companies they do business with.

Customers expect great experiences, yet they’re often getting the opposite. According to Broadridge’s 2023 CX and Communications Consumer Insights report, only 11% of policyholders think their insurer is among the best in providing a good experience when compared with other companies they do business with.

Customer dissatisfaction can directly affect the bottom line. In fact, the majority of surveyed consumers (65%) have cut spending with companies that don’t meet their customer service expectations. What’s even more alarming is that the dissatisfaction trend continues: 69% of consumers indicated that most of the companies they do business with need to improve their customer experience (CX). That’s up from only 35% in 2019.

There are steps you can take to improve your CX while controlling costs. But before doing so, it’s critical to understand two vital components to enhancing the customer experience: communicating with policyholders how they want, and then leveraging technology to deliver communications how and where they want them.

Matt Swain, head of communications insights and experience at Broadridge

Autonomous vehicles could lead to lower premiums: Moody’s

Policyholders could have lower auto fleet insurance premiums as autonomous and other intelligent technologies improve and there are fewer accidents, according to a Moody’s Investors Service report issued Wednesday.

“As advanced autonomous vehicles become prevalent, accident frequency is likely to fall precipitously over time, and could ultimately translate into significantly lower loss costs and premiums for auto insurers,” says the report on autonomous vehicles.

“Profits are likely to also decline, since most insurers set profit targets as a percentage of premiums,” it said.

Auto liability could also shift, the report says. “Regulators, lawmakers and courts will have to determine how liabilities for accidents caused by autonomous vehicles are shared among automobile manufacturers, technology companies, drivers, and their insurers,” it said.

Hagerty announces workforce cuts

In an SEC filing, Hagerty announced a workforce reduction of approximately 4% (83 employees) following the strategic review of business processes as the company focuses on driving efficiencies in order to achieve growth and profitability goals.

The company expects to realize a charge of approximately $5 million, primarily in the first quarter of 2023, associated with this headcount reduction.

Hagerty anticipates incremental annualized savings of approximately $20 million to $25 million as a result of this reduction in force, reduced hiring plans, as well as additional cost containment initiatives. Given the estimated restructuring charge and net savings over the balance of the year, the company now expects net income (loss) of $(13) million to $7 million and Adjusted EBITDA of $55 million to $75 million, respectively, for full year 2023.

Late last year, Hagerty announced a 6% workforce reduction.