News
Auto Panel: Telematics-based Transactions Up 35% in Past 12 Months
Editor's note: This is a must listen panel discussion about the state of auto insurance
A panel of auto insurance experts at the Verisk Insurance Conference said auto insurers are recovering from a "double whammy" of mis-rated policies and inflation.
APCIA Says Property Insurance Market ‘Hardest in a Generation’
A combination of historic high inflation and a growing frequency of natural catastrophes is creating the hardest market in a generation for property insurance, the American Property and Casualty Insurance Association (APCIA) says in a new white paper.
“The growth of population, housing, and businesses in hazard-prone areas are exacerbating the effects of climate change, leading to more frequent and severe catastrophe losses,” stated Karen Collins, the APCIA’s vice president, property and environmental. “The higher costs of capital and reduced reinsurance capacity are further exerting upward pressure on insurance rates and may result in stricter underwriting in cat-exposed markets.”
APCIA noted that the U.S. inflation rate hit a 41-year high of 8% in 2022, peaking at 9.2% last June. Insurance claims have risen even faster, contributing to underwriting losses that pushed the estimated combined loss ratio for property/casualty up to 104% according to a preliminary estimate by A.M. Best, the report says. That was the first underwriting loss since 2017.
US Property-Casualty Underwriting Results Expected To Improve
The US property-casualty insurance industry's underwriting results will likely improve this year as premium rates increase significantly in the underperforming automobile and property segments, according to Fitch Ratings.
Still, claims volatility along with higher inflation and macro uncertainty could prevent the US property-casualty segment from returning to underwriting profitability, Fitch said. The rating agency said its neutral outlook for US property-casualty insurance is based on stable to improving operating performance by the segment in 2023.
Fitch said that declining personal lines underwriting performance drove a 31 percent drop in the US property-casualty industry's 2022 statutory earnings. The personal lines sector should improve in 2023, Fitch said, as recent pricing and underwriting adjustments take hold and insured catastrophe losses normalize.
Slipcase – (re)insurance industry news
In his 2005 film about a family road trip, Ice Cube, playing the protagonist, is stuck in an SUV with two pretentious children and their mother who he seeks to impress...
Throughout the movie, the kids, whose aim is to question the relationship, indulge in shenanigans including repeating the titular phrase “Are we there yet”?
To be honest, the movie was too hammy for our liking. But as we head into first-quarter earnings, we feel a bit like the kids in that movie.
A year or so ago, the industry – primarily commercial insurers – discussed the expectation of meaningful margin improvement from pricing, as well as the potential benefit to investment income from changes in interest rate.
Beyond commercial lines, personal auto was also supposed to be reacting well to loss costs, and reinsurers were tightening the capital availability spigot.
One year later, we are still saying: “Are we there yet?”
But rather than getting clearer, the picture has only gotten more muddled, with multiple events influencing this earnings season. These range from several items that could impact insurance companies’ balance sheets and investments, such as the SVB crisis, to emerging issues surrounding commercial real estate.
Beyond the balance sheet items the macro discussion including the Fed’s next move and its impact on the sector will also be front and center.
Reinventing The P&C Insurance Claims Value-Chain: Moving To The Claims Of The Future Vision
Reinventing the P&C Insurance Claims Value-Chain: Moving to the Claims of the Future Vision
Heightened momentum for technology-first and automated operations is elevating customers’ need for greater convenience, instant gratification, faster turnaround time, and more self-service options. Today’s digitally-immersed consumers have grown accustomed to doing business anywhere, at any time, and with any device, and this is shaping up the new normal of the insurance industry; transforming the insurance claims journey becomes a pivotal priority for Property and Casualty (P&C) carriers to meet demands for a customer-centric hyper-personalized experience driven by digital technologies. Read on to learn more about the zero-touch claims of the future vision and how to achieve it.
Leading InsurTechs with pure-play digital models are heating up the competitive landscape, making it imperative for traditional insurers to optimize their claims functions. An insurer can achieve future goals by accelerating the adoption of next-generation capabilities.
Amid the digital shake-up and rising demand for delivering an “Amazon-like” experience, insurance operations are plagued with workflow complexities caused by multiple intermediaries and legacy systems. Digital and emerging technology solutions can help insurers reshape the customer claims journey and improve turnaround time while reducing information leakages and fraud and delivering a superior customer experience.
Harnessing The Power Of AI In The Insurance Sector
The insurance industry has undergone significant changes over the years. The integration of advanced technologies such as artificial intelligence (AI) has paved the way for further evolution, offering improved efficiency, reduced costs and enhanced customer experience. Various AI applications are currently in use in the insurance industry, ranging from underwriting to claims processing.
AI can help insurers evaluate risk more accurately by analyzing large amounts of data such as historical claims data, credit scores and social media activity—thereby enabling insurers to offer personalized coverage to customers and price policies more accurately. It can also aid in detecting and preventing fraud by analyzing data patterns and identifying suspicious activity, which can help insurers save money by reducing the number of fraudulent claims they pay out.
Metaverse In The Insurance Industry: A Match Made in Virtual Space
Metaverse has brought in a new wave of digital transformation by presenting the insurers with a robust technology toolset that helps them to get engage with the customers and develop new business strategies. As the line between the digital and physical world continues to blur, insurers are now prepared to enter into the ‘phygital’ environment and leverage the advantages of its potential.
Insurance companies can streamline their operations, enhance the customer experience, and address new risks by investing in the metaverse. Metaverse in the insurance industry is the new frontier in user experience and financial risk coverage that allows the utilization of digital avatars for training and customer support, creating digital twins for property underwriting, or providing coverage for digital assets.
InsurTech/M&A/Finance💰/Collaboration
Selling insurance is hard, but that’s not bad news for insurtechs
I spent quite a bit of time lately looking at the latest in insurtech. What’s great about zooming in on a sector is that I hear things that I didn’t expect. Talking to investors has also helped me confirm some of my intuition on topics like cash diversification and M&As.
Anna Heim, TechCrunch
Porch Group announces $333 million convertible notes financing
Porch Group announces $333 million convertible notes financing
Porch Group announced the pricing of a private offering of $333 million aggregate principal amount of its 6.75% Senior Secured Convertible Notes due 2028 in a private placement transaction, and a concurrent privately negotiated repurchase of $200 million aggregate principal amount of its 0.75% Convertible Senior Notes due 2026. The New Notes offering and Existing Notes repurchase are expected to close concurrently on April 20, 2023, subject to customary closing conditions.
“This transaction will allow us to reduce our medium-term debt maturity from $425 million to $225 million, while delivering additional liquidity to the business, all while minimizing dilution by maintaining a $25 per share conversion price.” – Shawn Tabak, Porch Group CFO.
AutoLeap, now with $30M Series B, accelerates SaaS approach to auto repair operations
AutoLeap's founders say now is "the golden age for aftermarket auto repair" as technology shifts from “a nice to have” to a "must have."
A shortage of available vehicles, higher car prices and interest rates are fueling car owners to hold onto their vehicles longer. Statistics from the Bureau of Transportation Statistics show that the average passenger car on the road is over 13 years old. In 2017, the age of the average car was 11 years old.
All of that holding on means more repairs, but 90% of auto repair shops still use “archaic technology” in the form of spreadsheets and clunky invoicing tools. Though these may be increasingly difficult to use, “change to something new” is keeping shops from upgrading, according to AutoLeap co-CEOs Steve Lau and Rameez Ansari.
Capitola Secures $15.6M in Series A Funding Round Led by Munich Re Ventures along with Lightspeed Venture Partners
Capitola, the digital marketplace for commercial insurance that connects brokers and carriers and uses AI-based risk appetite matching to streamline the placement process, today announced it has raised $15.6 million in its Series A funding round. Led by Munich Re Ventures, this round will be used to grow Capitola’s platform with an emphasis on its market intelligence capabilities and to accelerate sales in the U.S. This round adds to a $5M Series Seed round raised in 2021 that was led by *Lightspeed Venture Partners**, who also participated in this round.
“The insurance industry has seen many technological advancements over the years, but very little attention has been given to the insurance professionals and the tools they use,” said Sivan Iram, Capitola’s co-founder and CEO. “Capitola’s mission is to help insurance professionals deliver exceptional client service and coverage. Our platform brings together brokers and underwriters, removing many of the operational inefficiencies around manual processes and repetitive tasks to allow them to focus on what they do best. We’re thrilled to have the support of Munich Re Ventures, Lightspeed, and our other investors as we continue to grow our team, develop innovative solutions and expand our impact on the insurance industry.”
Top 10 insurtech companies in the US by total funding
These are the top 10 insurtechs based in the US, ranked in order of the total amount of fundraising they've brought in to date
As the technology has evolved to enable it, the insurtech sector has seen a massive boom in the last 10 years. There is now no shortage of insurtech unicorns – companies worth at least US$1bn in valuation. Indeed, a tenth of all fintechs globally to have achieved unicorn status are reported to be insurtechs.
The US is home to a large number of insurtechs, split between Silicon Valley on the West Coast and New York on the East Coast. Here’s our list of the Top 10 US insurtechs, which we’ve ranked based on total funding raised to date.
$6.5 Million Awarded to Support New Insurance Policies and Products for Climate Technology Solutions
Governor Kathy Hochul today announced $6.5 million awarded under the Insurance Innovation for Climate-Technology Solutions program to support new insurance policies and products that will accelerate the adoption of clean technologies by consumers across New York State. The nonprofit InnSure was selected to deploy grants that will advance risk management and insurance market growth - transforming business support and providing consumer confidence for a range of climate-friendly technology products. This announcement supports the adoption of new technologies to meet the State's nation-leading Climate Leadership and Community Protection Act goals, including an 85 percent reduction in greenhouse gas emissions by 2050.
"Removing barriers to innovative, climate technologies that lower carbon emissions is a critical part of reaching New York's ambitious climate goals," Governor Hochul said. "By supporting new insurance policies for New Yorkers purchasing cutting-edge, climate-friendly products, we can offer protection and reassurance for consumers and companies alike to help ensure our state continues to lead in climate innovation."
Events
Insurance Innovators USA Day 1 Highlights, April 17, 2023
Insurance Innovators USA today hosted the movers, shakers, disruptors and influencers in Nashville, Tennessee to shine a light on the cutting-edge innovations and emerging trends that that are shaping the future of insurance
Here are the Day One highlights.