Old is Gold: The timeless appeal of small carriers and brokers  April 28th 2023

2023 U.S. Insurance Shopping Study

The nation’s auto insurers are locked in a vicious cycle of inflation, rising premiums and steadily increasing customer defection rates.

The result, according to the J.D. Power 2023 U.S. Insurance Shopping Study, released today, is a sharper focus on saving money as large numbers of auto insurance customers shop for new policies and switch to new carriers, largely based on price.

“Auto insurance customers are starting to shop for insurance like they shop for gas,” said Stephen Crewdson, senior director, insurance business intelligence at J.D. Power**. “They are taking a much more active stance in seeking out plans that fit their needs and their budgets, which could have a serious long-term effect on carriers that have been working for years to build lifetime value through bundling and other initiatives. In the near term, this shopping trend manifests itself in increased customer interest in usage-based insurance (UBI) plans and some reshuffling of market share among the top carriers.”

Unlike Fine Wine, Claims Don’t Age Well

The length of time it takes to settle an auto claim is key to customer satisfaction --  one of many reasons touchless claims are finding a stronghold.

Ahhh... a full-bodied merlot or cabernet sauvignon. Nothing tastes better than an aged red wine. The longer these vintage spirts lay dormant, the better. 

Unfortunately, there is no such happy result when it comes to delayed vehicle claims. In fact, the more time a claim goes unattended, the more “collateral damage” is created, with increases in (already challenged) cycle times and decreases in customer satisfaction. 

Bill Brower, vice president, industry relations, Solera

Embedded insurance enhances product offerings in developed markets: AM Best

According to ratings agency, AM Best, the growing use of embedded insurance in developed markets has provided a way to enhance product offerings and integrate risk protection directly into purchases.

According to a new commentary by the ratings agency, there are still significant challenges to overcome in the consumer-facing channel of the insurance industry. These include navigating regulatory constraints, establishing standardized and limited coverage, and keeping claims costs and handling at manageable levels.

Embedded insurance coverage is developed by a carrier, but distributed through non-insurance channels. It often complements another product or service that is offered, and also has a limited insured amount.

AM Best’s commentary, titled “Embedded Insurance Gains Profile as a Digital Option,” explains that the goal of embedded insurance is to offer insurance as an add-on option during a related transaction, establishing a level of trust between the distributor and the consumer.

According to Simon Torrance, a leading industry analyst, embedded insurance will generate $2.5 trillion in Gross Written Premiums by 2032 in Life and Property/Casualty businesses.

Innovating commercial auto distribution through telematics

Innovation in both product and distribution underlies the strength of successful insurance programs, and commercial auto insurers have an opportunity to leverage both as the industry seeks to improve upon a decade of financial losses. While the use of telematics-based products increases, most insurers adopting them remain committed to traditional distribution methods and overlook the substantial benefit of risk pre-selection.

Commercial auto is the worst-performing property and casualty line of business, and telematics is a very necessary solution for advancing risk assessment and future profitability. Since 2010, the industry has generated an underwriting return only once, in 2021, due to a marked decline in frequency associated with the Covid-19 pandemic. As such, an increasing number of insurers are transitioning to telematics-based programs based on quantified improvements in crash frequency, loss ratio, retention, claim quality and efficiency. The IoT Insurance Observatory is a leading advocate for telematics solutions in both personal and commercial lines and reports many of these results.

Joe DiMartino, Ph.D., is CEO of Fleetr

Core systems are critical for enabling digital transformation

It would be difficult to dispute how critical core systems are in the insurance business – they are the enablers of significant in-and-out interactions and help drive efficiency and profitability for an insurance company. Today, many insurers and MGAs are accelerating their transformational journeys by upgrading their policy, billing, and claims systems. And new research suggests that demand for new core implementations is not slowing down.

A new research report from SMA examines core systems deals completed in 2022 from 18 of the top solution providers in the market today. The transactions span insurers and MGAs and support personal, commercial, and combined personal/commercial lines business. What is clear from the research is that the core systems buying is consistent, which, along with continued deployments across all segments over the past few years, indicates a strong market.

Eyes Wide Open: A ChatGPT Users’ Guide for Insurance Professionals

OpenAI’s ChatGPT will give you some pushback if you ask it how to commit a crime—like breaking into someone’s house.

But a little creative coaxing can elicit a “misaligned response” from the “generative pre-trained transformer” large language model, Girish Modgil, vice president of Travelers Automation and Artificial Intelligence Accelerator program, demonstrated early last month.

During the Travelers Institute webinar, “Making Sense of Emerging AI Capabilities like ChatGPT,” moderated by Institute President Joan Woodward, Modgil and Mano Mannoochahr, chief data and analytics officer, illustrated the immense possibilities as well as the drawbacks of using the increasingly popular AI tool.

A Record Start to the 2023 U.S. Tornado Season

The U.S. has experienced a record number of tornadoes in the first three months of 2023 according to preliminary data from the National Weather Service Storm Prediction Center (NWS SPC), delivering an active start to the U.S. severe convective storm season

In this blog, we review the 2023 season to date, recap the largest tornado outbreaks, the causes of this active start to the year, potential loss implications, and examine what the remainder of the severe convective storm season might have in store.

From Data to Decision Making: How AI Is Streamlining Claims Operations

Insurance organizations handle more data than ever, but using that data efficiently isn’t always easy. That’s why many are turning to artificial intelligence (AI) to accelerate workflows and get the right insights to the right adjusters. These capabilities promise lower costs but also create a faster path to claims resolution, which is increasingly important: A recent survey found that one-third of claimants weren’t satisfied with their experience — and slow claim speed was cited by 60% of those participants.

“We handle about 5,000 new claims each year,” says Ann Latimer, senior vice president, head of claims operations at Signal Mutual Indemnity Association, the premier Longshore mutual in the United States. “And with every new claim, we need to figure out the severity quickly in order to route it to the right adjuster. So recently, we began using artificial intelligence from Gradient AI to help improve processes, such as claims triage.”

As helpful as AI is for expediting claims triaging and providing critical insights, getting adjusters — especially the more seasoned ones — on board can present a cultural challenge.