Commentary/Opinion
Why educating consumers on coverage is necessary
Risk. It's probably the most fundamental word in insurance.
Nothing is decided without assessing risk. Actuaries use models and statistics to gauge the risk in offering an insurance policy, which determines the premiums consumers pay. Insurance companies are covering their bets. But are we encouraging our customers to be as proactive about risk as we are?
According to Bankrate's 2022 annual True Cost of Auto Insurance report, the average consumer pays $1,771 annually on car insurance. More in New York and Florida, less in Maine. Bankrate estimates the average cost of homeowner insurance at $1,383 per year for $250,000 for dwelling coverage.
Premiums are expected to rise even further as insurers battle higher costs across the board. With good reason. The U.S. was hit with 15 separate billion-dollar weather and climate disasters in 2022, according to the National Centers for Environmental Information. We only need to see the images from Hurricane Ian's destruction in Florida last September to see how quickly life changed for those residents.
The results of a Harris Poll on behalf of VIU by HUB surveying more than 1,600 Americans with auto/homeowners insurance reveals that nearly 60% of respondents are concerned about their homeowners and/or auto insurance coverage not being enough due to the changing economy.
Additionally, of those who have made a claim on their insurance policy in the past five years, 40% had an event where their policy did not cover their claim as they had expected. And, 59% of homeowners and/or auto policyowners are concerned that their home/auto insurance coverage may not be enough due to the changing economy (e.g., inflation).
I can't think of another industry where consumers have such confidence in the product yet can't tell you exactly what they are getting. Personal insurance shouldn't be a mystery. The stakes are too high for consumers not to be fully immersed in the details of their insurance policies.
I look at it this way. Each year we are encouraged to schedule a physical to ensure we are keeping tabs on our health. We should encourage consumers to take the same approach with auto and home insurance, especially if they live in areas prone to natural disasters.
As consumers increasingly make transactions in the digital space, let's leverage the technology we have to better meet their needs and lower their risk.
Bryan Davis. Executive Vice President And Head Of VIU by HUB
News
Progressive Reports Personal Auto Policies in Force Grew 11% in March - CollisionWeek
The Progressive Corporation (NYSE:PGR) reported its total personal auto insurance policies in force were 19,168,400 in March, an increase of 11% from March 2022. Agency personal auto insurance policies were 8,172,900, up 5% from 2022 and direct policies in force were 10,995,500, up 15% versus March 2022.
Over all its lines of business, Progressive reported $4.719 billion in net premiums written during the month, up 19 percent from March 2022. For the full quarter, net premiums written total $16.109 billion, up 22% from the first quarter of 2022.
How insurers can beat economic disruption with tech investments
Whether or not a recession officially arrives, the current severity of the economic downturn to date can't be dismissed. Many insurers have already recently reported reduced profits and a slowdown. Despite these economic hardships, those looking at the bigger picture have already planned to increase their technology investments, largely to boost decision making and reduce operational costs for greater profitability in the long run.
Where those tech dollars are going reflects urgency around the new economic reality. While insurers have previously prioritized investments in sustainability and talent as a means of driving greater competitive advantage, there's been a recent shift towards doubling down on supply chain investments (primarily distribution and claims). It's easy to understand the emphasis on the supply chain, but insurers should be careful to integrate and synchronize their investments across all these categories.
Kiran Kumar Boosam VP, Head Of Global Insurance Strategy & Portfolio, Capgemini
Property insurance price increases spell pain for CRE
Commercial real estate property insurance has increased so much over the past 2 years that the industry is requesting lending reform and government help to address the pressure these rising prices have put on the market, Bisnow reports.
“Something’s got to give or it’s just going to paralyze the industry,” Bainbridge Cos. Chief Operating Officer Kevin Keane told Bisnow. “We’ve actually lost out on a number of acquisition opportunities and development opportunities, simply because the insurance premiums have been so high.”
Commercial real estate insurance premiums went up at the end of 2022 by an average 9.4 percent across the U.S. from the year before, per the Insurance Information Institute (III). States like Texas, Florida and California saw even bigger jumps — between 30 and 50 percent, according to III. Meanwhile, construction price increases forced replacement costs to go up 40 percent more than they were 4 years ago, III Communications Director Mark Friedlander told Bisnow. Increased major weather events have also contributed to these insurance premium increases.
Intel | Tesla Recalls Over 1 Million Vehicles Over Worries Windows Could Cause a Pinch
A faulty window reversal system on certain Tesla models has led to the recall of more than 1 million vehicles.
The problem, discovered by the company during production testing in August, could make the power windows react incorrectly to obstructions and cause an individual’s fingers to be pinched, the Associated Press reported. Affected vehicles include certain Model 3 and Model S sedans and Model Y and Model X SUVs, each from various production years.
As of Sept. 16, Tesla was not aware of any claims or injuries related to the defect, the company noted in its recall report dated Sept. 19.
“No matter how many safeguards you take, recalls are always possible,” said Derek Kilmer, Manager, Professional Liability, Burns & Wilcox, Farmington Hills, Michigan. “There can be a production problem in anything automotive-related.”
The costs associated with an automotive recall can be covered under the company’s Product Recall Insurance or if the flaw caused harm to consumers, its Products Liability Insurance. In Tesla’s case, a firmware update that will be deployed “over the air” to affected vehicles is expected to resolve the issue. This allows the electric vehicle maker to avoid the logistical hurdle of physically calling back so many vehicles for a repair, Fortune reported.
Hannover Re now second-largest P&C reinsurer
Hannover Re is now the world’s second-largest property/casualty (P&C) reinsurer after overtaking Swiss Re.
The German reinsurance giant reported P&C reinsurance gross written premiums of close to $25bn in 2022, marginally ahead of Swiss Re’s total of $24bn, according to analysis by Aon.
Munich Re maintained its position as the largest P&C reinsurer with gross written premiums slightly ahead of Hannover Re.
AI and Fraud Detection in the Insurance Industry: Challenges and Solutions
The insurance business is seeing unprecedented levels of fraud, with billions of dollars lost each year as a result of bogus claims. In order to fight this issue, insurers are employing artificial intelligence (AI) and machine learning tools to detect and prevent fraudulent conduct.
In this article, we will look at the problems and answers to employing artificial intelligence for fraud detection in the insurance business.
The Difficulties of Detecting Fraud in the Insurance Industry
Insurance fraud takes many various forms, making it difficult for insurers to detect and prevent it. The following are some of the most typical types of insurance fraud:
Vehicle Telematics Global Market Report 2023: 5G and AI-based Edge Computing to Elevate the Value of Vehicle Telematics Market Solutions
This report assesses the vehicle telematics ecosystem including market dynamics and emerging B2B, B2C, and B2P business models. The report evaluates hardware, software, network connectivity and supporting technologies.
The report also analyzes OEM vs. aftermarket sales opportunities, applications in different industry verticals, and emerging technologies that enable new and enhanced vehicle telematics solutions. The report provides market sizing data with forecasts from 2023 to 2028.
Select Report Findings:
The global vehicle telematics market will reach $221.5 billion by 2028, growing at 13.4% CAGR
The 5G enabled global telematics market will reach $102.3 billion by 2028, growing at 48.7% CAGR
Emerging technologies are enabling completely new and enhanced B2C and B2B telematics use cases
The vehicle telematics OEM market is two times larger than aftermarket and growing three times CAGR
The commercial vehicle market remains the largest segment followed by passenger automobiles and two-wheeled vehicles
InsurTech/M&A/Finance💰/Collaboration
As hail damage continues across the U.S., new research from ZestyAI and IBHS works to make hail losses more predictable
Today ZestyAI, the leading provider of climate and property risk analytics solutions powered by artificial intelligence (AI), and the Insurance Institute for Business & Home Safety (IBHS) released new research examining catastrophic losses from severe convective storms, particularly hail. The study focuses on hail-driven losses in property and casualty insurance.
Hail losses are a persistent problem for property insurers' risk management efforts. Historically, carriers have focused on intense events to predict hail risk, with supporting data confined to storms with hailstones larger than one or two inches. The study Small Hail, Big Problems, New Approach shows high concentrations of small hail are more important than previously thought, pointing to an opportunity to broaden data sets to account for the cumulative effect all hailstorms have on a roof's susceptibility to damage over time, leading to a claim.
"Hail losses are a persistent problem for property insurers' risk management efforts," said Attila Toth, founder and CEO of ZestyAI. "Three of the nation's five largest publicly-traded P&C carriers mentioned hail as a key concern in 2022 financial reports. Greater losses have brought attention to hail risk, and the insurance industry needs better approaches to solve this problem."
Insurtech startup Kanguro launches US pet insurance offering
A majority of US pet owners don't currently take out insurance for their pets.
Insurtech startup Kanguro Insurance has launched a brand new pet insurance proposition for the US market, described as 'health insurance for pets'
US pet insurtech Kanguro Insurance has launched a new pet insurance proposition for American pet owners.
Described as “health insurance for pets”, Kanguro’s coverage places a strong emphasis on digital innovation and provides bilingual customer service. The Miami-based company, which was only launched in September 2022, is aiming to transform the US pet insurance industry and has already sold 1,000 policies.
"Pet insurance can be a financial lifesaver, especially when it comes to unexpected emergencies," adds Kanguro President Nicholas Hanabergh. "Our goal is to provide pet owners with affordable, customisable, and comprehensive coverage that meets their unique needs and budget."
WRMS bridges $160bn global protection gap by launching SecuRisk
Agriculture and climate risk management firm Weather Risk Management Services (WRMS), has unveiled SecuRisk, a digital-first global parametric insurance marketplace, to bridge the $160 billion global protection gap.
In a press release, the firm stated that SecuRisk supports product design, product validation, digital beneficiary onboarding, product education, policy purchase, claim management & settlement.
WRMS also noted that the platform is backed by a proprietary global data stack, as well as simple product education and capacity-building tools keeping the needs of low-income communities in mind.
SecuRisk will be available to a wide range of different customers, such as individuals, aggregators, development institutions, brokers on the demand side, and re/insurers on the supply side.
“The global underinsurance gap is $160 billion, 96% of which is in emerging economies; Asia accounts for over 85%. The challenge is that traditional indemnity-based insurance solutions have not been able to fill this gap because they are data and resource intensive, expensive, and time-consuming which makes them unviable to cover small ticket risks relevant for these economies. The solution is Parametric Insurance, but while there has been significant traction in Europe and North America, the parametric needle hasn’t moved much in emerging economies.” said Anuj Kumbhat, Founder & CEO, WRMS.
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Canada
Desjardins hunting for property and casualty insurance acquisitions
Canada’s Desjardins Groupis seeking acquisitions in the property and casualty (P&C) insurance space as it seeks to boost its presence across the country, CEO Guy Cormier told Reuters on Tuesday.
Cormier said the Quebec-based cooperative financial group is mainly looking at opportunities in Canada where it feels the industry is ripe for consolidation.
"We are in acquisition mode and we are in discussion with some players," he told Reuters, referring specifically to P&C. "We really hope to be able to make a transaction."