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California to Create First Public Wildfire Catastrophe Model to Empower Homeowners with Insurance Wildfire Risk Information, says Consumer Watchdog
Legislation creating a fully transparent public wildfire catastrophe model was signed by Governor Newsom late Friday.
The law will give consumers the ability to push back on secret wildfire risk algorithms insurance companies use to raise rates in California. The legislation, SB 429, was authored by Senator Dave Cortese. It charges California universities and the Department of Insurance with creating the model and funding was approved in the 2025 budget.
"Homeowners are fed up with insurance companies' black-box models that penalize consumers for fire risk but refuse to explain how they calculate it. Even when they do everything to protect their homes from wildfires homeowners face extreme price hikes or lose their insurance completely. A fully transparent wildfire model will level the playing field and empower consumers to keep their insurance and make their homes and communities safer," said Carmen Balber, Executive Director of Consumer Watchdog.
SB 429 requires full public access to all aspects of the wildfire catastrophe model, including all "documentation and programs" and "underlying data and algorithms" of the model. Under current regulations, California Insurance Commissioner Ricardo Lara specifically exempted insurance companies from disclosing the same information about the private black-box models they use to set insurance rates.
Newsom signs five new FAIR Plan laws
These new laws aim to advance reforms to California's insurer of last resort.
Years of work have gone into attempted reforms to California’s insurer of last resort — the FAIR Plan. On October 9, Governor Gavin Newsom signed a handful of new bills into law that aim to advance that directive.
Below, we break down the five bills signed by the governor last week.
State Farm faces class action over auto claims payouts in Tennessee
A federal appeals court has allowed a class action to proceed against State Farm over its method for calculating total loss auto claims in Tennessee.
The case focuses on State Farm’s use of the “Typical Negotiation Adjustment” (TNA) when determining the actual cash value of totaled vehicles for Tennessee policyholders. State Farm relied on valuations from Audatex, a third-party company, and applied the TNA to reduce payouts based on the assumption that buyers typically negotiate lower prices than those advertised.
Lead plaintiff Jessica Clippinger alleged that the TNA did not reflect current market practices and resulted in lower settlements than policyholders were entitled to under their insurance contracts. She argued that, due to online shopping and price transparency, used cars often sell for their advertised prices. The lawsuit claims that State Farm’s use of the TNA breached its contracts and violated Tennessee law.
State Farm’s standard Tennessee auto policy provides for payment of the “actual cash value” of a totaled vehicle. If there is disagreement about the value, the policy allows either party to request an appraisal, with each side selecting an appraiser and a third chosen if needed. Tennessee regulations set out permissible methods for determining actual cash value but allow insurers discretion in the approach used.
Legal System Abuse/Social Inflation
Florida Gov. DeSantis speaks on market changes following insurance reform
Florida Gov. Ron DeSantis said last week that insurance reform in the state over the past couple of years has played a part in the top five auto insurance groups reducing rates, on average, by 6.5% this year.
He spoke in Orlando on Oct. 6 at the American Property Casualty Insurance Association (APCIA)’s annual meeting. DeSantis said the insurance market also benefited from faster catastrophe recovery.
“As of the end of 2024, auto insurance had been arguably the most inflationary item of any of the baskets of things people look at for how households are being affected by inflation,” he said. “There’s not a lot of places in this country where you’re seeing declines in rates for auto insurance.”
DeSantis said Florida’s personal auto liability loss ratio is the lowest in the nation, at 53.3% as of the end of 2024, due to the reforms.
As of Sept. 30, DeSantis said Florida’s Office of Insurance Regulation had received 59 rate filings for rate decreases and 87 filings for zero rate increases. He didn’t specify whether the filings were for auto or homeowner insurance, or both.
Before the recent reforms, DeSantis said Florida held 8% of all property insurance claims nationwide and accounted for 78% of all litigation nationwide.
“If somebody is harmed, they should have a right to go in and get a redress of the grievances, including monetary compensation,” he said. “But I think what we were seeing was someone would have a $50,000 claim and they’d end up with a judgment where the lawyer got $300,000 and then the person with the claim got $50,000. How is that a system that makes any sense?
AI in Insurance
A tech-y generation gets replaced by AI - Business Insurance
Twenty-nine percent of companies have already replaced entry-level workers with AI, and another 34% are considering doing so, as a new survey reveals growing concerns about Gen Z in the workplace and a shift toward artificial intelligence “as a more dependable alternative.”
Six in 10 hiring managers expressed hesitations about hiring Gen Z workers, and one in eight say the average Gen Zer is “unemployable,” according to a ResumeTemplates.com survey of 1,000 U.S. hiring managers.
Among managers who are unwilling to hire Gen Z employees, 81% say they lack work ethic, 74% describe them as entitled, and 68% cite issues with professionalism. Eighteen percent of all hiring managers say Gen Z has negatively impacted company productivity.
Forty-one percent of hiring managers say AI is more reliable than Gen Z because it delivers faster, more consistent results with fewer errors.
The trend is expected to continue; 68% of managers believe AI will reduce the need for entry-level employees within five years.
DXC Launches Assure Smart Apps to Accelerate AI-Driven Innovation in the Insurance Industry
DXC Technology (NYSE: DXC), a leading Fortune 500 global technology services provider, today announced the launch of DXC Assure Smart Apps, a new suite of AI-powered, workflow-driven applications designed to transform how insurers engage with customers, brokers, and advisors. Built for speed, precision, and flexibility, Assure Smart Apps combine intelligent automation with modular innovation to help insurers modernize operations and improve performance, all while leveraging existing systems.
"Assure Smart Apps meet insurers where they are, whether they're maintaining heritage systems, extending capabilities, or transforming for the future," said Ray August, President of Insurance Software and Business Process Services at DXC. "This launch represents a major leap forward in how insurers digitize and automate every step of their business processes. Our modular approach provides the flexibility to innovate at their own pace, without disrupting critical operations or existing investments."
Assure Smart Apps are purpose-built with features to address today's most common insurance challenges facing brokers, customers, and advisors:
- Self-service capabilities: Allows customers, brokers, and advisors to make their own updates on the platform and change information as needed.
- Customer support: Equips customers with personal insurance concierge accessible from their mobile device, using AI-driven insights to provide real-time support.
- AI insights: AI-enabled dashboards draw from previously arranged contracts to generate intelligent insights and speed up the decision-making process.
- Leverage existing systems: Assure Smart Apps can be built and deployed quickly, working with existing DXC solutions to minimize disruption.
Research
Weed, THC, Car Crashes, and Fatalities
Many drivers are injured or killed while under the influence of cannabis or THC, and the problem is rapidly escalating.
- An American College of Surgeons coroner study showed 42% of drivers in fatal ctashes tested positive for THC.
- THC harms driving, impeding coordination, visual function, and attention for several hours after consumption.
- High-THC cannabis, vaping THC, and use with other drugs or alcohol make driving even more dangerous.
Sometimes marijuana can kill, not by overdose, but when people drive under the influence of THC. Recent research analyzed coroner records in Montgomery County, Ohio, from January 2019 through September 2024 to identify THC, the psychoactive drug derived from cannabis, in drivers in fatal crashes. Shockingly, close to half (42%) of the drivers killed in crashes tested positive for THC in the blood.
In the cases of 246 deceased drivers, each had their blood tested for THC as part of the autopsy/toxicology process. Because these are coroner-drawn blood samples (typically within hours of death), the THC levels reflected usage close in time to the crash (recent ingestion). The most important result was the high prevalence of THC positivity in fatal crashes; 103 out of 246 drivers (41.9%) tested positive for active THC. The researchers also found that the THC concentrations in blood were very high. Among the THC-positive cases, the average concentration was 30.7 ng/mL, a blood level well above impairment thresholds, often 2- 5 ng/mL.
This information was presented at the recent Clinical Congress of the American College of Surgeons. Caution is warranted until the findings are peer-reviewed and published.
The cohort consisted of drivers who died in crashes, but information was not provided on drivers in general, nonfatal crashes, or those who survived. Also, although many deceased drivers had THC in their blood, that doesn’t prove that THC caused or contributed to the crash. There may have been other substances present in the blood, like alcohol, cocaine, opioids, or benzodiazepines. Also, the study did not utilize control groups (like drivers in nonfatal crashes or non-crash drivers). Still, the findings are concerning.
InsurTech/M&A/Finance💰/Collaboration
RAVIN and ROLLiN' Launch Strategic Partnership to Fast-Track Claims for Australian Drivers
RAVIN AI, a leader in AI-powered vehicle inspections, today announced a strategic technology partnership with ROLLiN', one of Australia's fastest-growing digital car insurance brands. The partnership will enable ROLLiN' to digitise post-collision vehicle inspections and assessments.
RAVIN's technology, powered by a global dataset of billions of real vehicle images, uses artificial intelligence to assess vehicle damage from photos taken by end customers or tow truck drivers. The system provides real-time predictions on whether a vehicle is a total loss or repairable, along with automated repair estimates. For ROLLiN' customers, this means faster claims decisions, reduced delays, and a more seamless experience from first notification of loss to settlement.
"Joining forces with RAVIN AI aligns perfectly with ROLLiN's goal to provide smart insurance that meets the expectations of a younger, tech-savvy audience," said Brendan Griffiths, Executive Manager at ROLLiN'. "The majority of our customers lodge claims online. Now they can opt-in to capture damage of their vehicle themselves, allowing RAVIN's artificial intelligence to produce a detailed condition report. Ultimately this will support repair decisions and help get customers back on the road sooner."
"We're thrilled to work with ROLLiN' to bring the power of AI vehicle inspections to more Australians, creating a digital claim experience at a fraction of the time," said Eliron Ekstein, Co-Founder and CEO of RAVIN. "This collaboration is a natural next step after our successful pilots with IAG, and it reflects our shared commitment to innovation and customer-centric insurance."
Investors Back Irys Insurtech with $12.5 Million to Reinvent Insurance Software
Irys, the company rebuilding insurance infrastructure from the ground up, today announced a $12.5 million seed round led by Markd, with participation from Deepwork Capital, Florida Opportunity Fund, Ansay & Associates, HICO Ventures, and JMG Capital.
The round gives Irys fresh capital to expand engineering, accelerate implementation, and scale distribution partnerships across the U.S and Canada. It also underscores a resurgence of investor confidence in insurance infrastructure, coming shortly after Markd's own $500 million fundraise to back transformative insurtechs.
"For 15 years I ran agencies on tech that didn't care if it was usable," said Margeaux Giles, CEO of Irys. "The industry's been trapped in contracts, broken platforms, and empty promises. It's eroded the trust agents fight to build every day with their clients. Irys is how we fix that."
Irys replaces outdated systems with an AI-native, integration-agnostic operating platform that unifies financials, operations, and sales and client data in real time. The system communicates across tools and between AIs, enabling automation that scales service capacity and profitability without adding staff.
"The market has confirmed- insurance leaders are done stacking third-party tools just to work around outdated systems," said Parker Beauchamp, Managing Partner at Markd. "Irys isn't just a new AMS, it's the whole backbone. It runs CRM, analytics, accounting, tasks, and document management, all in one place. It's the infrastructure that works."
This Startup Raised $13.3 Million To Inject AI Into One Of The World’s Slowest Industries
Armed with fresh capital, ClaimSorted is using artificial intelligence to ensure insurance claims get paid without the pain.The tedious, time-consuming process of settling insurance claims is practically begging for disruption. A startup called ClaimSorted is answering the call with an AI-enabled service that investors are backing to redefine the industry.
On Monday, ClaimSorted will announce a $13.3 million seed round led by Atomico, the venture capital firm that has backed fintech giants Stripe and Klarna, with participation from Eurazeo, Y Combinator, Firstminute Capital, Start Ventures and a network of seasoned insurance veterans.
The fresh capital will help fund the expansion of ClaimSorted’s 50-person team, particularly in its engineering and claims operations. But don’t expect any victory laps.
“We don't celebrate a fundraise once we close,” said Pavel Gertsberg, ClaimSorted’s cofounder and CEO, in an exclusive interview. “We didn't have any company drinks, didn't do anything. It's not the goal. The goal is the customer and what we deliver.”
At just over a year old, ClaimSorted says it already works with more than 20 insurance companies across the U.S., U.K., and EU, serving tens of thousands of policyholders. The founders’ long-term goal is to reach 100 million policyholders worldwide.