News
Looking Forward to 2023: Top Trends Shaping Insurance
With multiple signals to respond to involving economic, business, environmental and social factors, 2023 will demand insurers to respond by strengthening business fundamentals and foundation, while meeting the challenges of a changing market.
Understanding the future is all about signals—and we have lots of them. We are facing new challenges including the market economics of inflation, supply chain issues, rising interest rates, and low unemployment. We are grappling with the increased reality of societal, climate, and technology risks and their potential impact on our lives. We are experiencing declining profitability, rising loss ratios and claims costs, increasing demand for reinsurance capacity, lower disposable incomes, and a growing talent loss with a projected high percentage of retirements within the insurance industry.
At the same time, we are seeing a changing market landscape. The year 2023 is poised to deliver some game-changing scenarios that will impact insurance. Amazon is re-entering insurance in the U.K. [i]. Apple could enter health insurance in 2024 [ii]. Google is bringing data and analytics at scale through increased partnerships with insurers like Travelers [iii]. Insurers will continue to acquire new distribution channels or InsurTech technology, like American Family did with Bold Penguin [iv] and Travelers with Trov [v]. And the InsurTech space will change and consolidate due to higher interest rates, tightening access to capital and lack of profitability.
Understanding the future is all about signals—and we have lots of them. We are facing new challenges including the market economics of inflation, supply chain issues, rising interest rates, and low unemployment. We are grappling with the increased reality of societal, climate, and technology risks and their potential impact on our lives. We are experiencing declining profitability, rising loss ratios and claims costs, increasing demand for reinsurance capacity, lower disposable incomes, and a growing talent loss with a projected high percentage of retirements within the insurance industry.
Denise Garth, Chief Strategy Officer, Majesco
Travelers expects $459 million hit from cat losses
Travelers Cos. Inc. said Tuesday it expects to report net income of $819 million for the fourth quarter of 2022, down about 38% from the same period in 2021, largely due to losses from the winter storm that hit much of the United States and Canada in December.
The results forecast includes $459 million of catastrophe losses pre-tax, net of reinsurance, Travelers said in a statement.
A deadly winter storm brought freezing temperatures to a huge swath of North America in late December, cutting power to millions, disrupting holiday travel and bringing large snowfalls to areas such as upstate New York.
Travelers said it expects its results, which it is due to report Jan. 24, will include an underlying underwriting gain of $723 million and net investment income of $625 million.
Travelers' financial results are closely watched because it is usually the first major property/casualty to report each quarter. The insurer's shares were down nearly 5% in late trading Tuesday.
More insurance companies pull out of Louisiana: 'We are in a crisis'
Thousands of folks in the South no longer have home insurance because companies are leaving the area after years of devastating storms.
The state of Louisiana is at the center of this insurance dilemma.
In the last two years, more than 20 companies have gone under or withdrawn from the state, forcing hundreds of thousands of families to pay higher premiums or go without coverage.
“We are certainly in a crisis,” said Louisiana Insurance Commissioner Jim Donelon.
Donelon says the crisis started in 2020 when Hurricane Laura hit Lake Charles. Soon after, the state was hit by storms Delta and Zeta, and then another major hurricane, Ida, in 2021.
“800,000 claims were filed after Laura and Ida, resulting in insurers paying $23 billion for insured losses,” Donelon said.
Nationwide, NFL Engage Fans with New Fundraising Platform
The 32 nominees for the National Football League's (NFL's) Walter Payton NFL Man of the Year award presented by Nationwide are recognized not only for athletic excellence, but also because they make a positive impact off the field in their respective communities, representing the best of the NFL's commitment to philanthropy.
Nationwide, NFL Engage Fans with Alltroo; Donors Can Win Prizes Curated By Walter Payton NFL Man of the Year Nominees
For the first time, fans will have the opportunity to contribute directly to some of the causes supported by the nominees through a new online fundraising platform called Alltroo, which was co-founded by three-time Walter Payton NFL Man of the Year nominee and Tampa Bay Buccaneers tight end Kyle Rudolph. Because of Nationwide's sponsorship of the themed fundraisers, all of the donations that fans make on the Alltroo site will go directly to the player's designated charities.
From now through February 6, 2023, Alltroo will host customized fundraisers where supporters can make donations to any, and as many, of the charities designated by participating Walter Payton NFL Man of the Year nominees. Donors will receive entries into a sweepstakes where prizes include a host of specially curated packages and experiences such as tickets to a game next season, with travel arrangements paid for; meet and greets and meals with players; personally signed team jerseys; and replica team helmets. The fundraisers will close at 11:59 p.m. CT on February 6, 2023.
Make an Easy $1,000 Each Month Car Sharing
Clearsurance.com recently released a report, Turo insurance: What to know about sharing your car. This report explains how the car-sharing platform, Turo, works and how individuals can turn a profit using their personal vehicles.
Car-Sharing Versus Ride-Sharing Services Uber and Lyft are popular ridesharing services. But in the rideshare model, vehicle owners provide transportation to customers. With a car-sharing platform, vehicle owners allow peers to rent their cars and drive themselves.
Both services meet different needs, so they aren’t direct competitors. Customers who want a ride will still use ride-sharing, and customers who wish to access a vehicle for a day or longer to transport themselves can opt for car-sharing.
Car Sharing Versus Car Rentals Car sharing is renting a car. But instead of renting from an agency, peer car-sharing platforms like Turo allow customers to rent from other people. In addition, both car-sharing and car rentals offer insurance options. Rideshare insurance options are similar to car-sharing insurance options.
Online Tracking Technologies
Common tracking technologies used on websites may be transmitting private information about site users to third parties to facilitate advertising. This led to numerous class actions being filed in 2022 and has sparked interest from regulators. It has also attracted the attention of cyber insurance underwriters.
Here’s what you need to know about these technologies, why regulators and insurers are concerned and what your organization can do to mitigate potential risks.
How tracking technology works
Perhaps the best-known example of tracking technology is the Meta Pixel, a small bit of computer code that resides on a website and tracks the activity of visitors to that site for the purpose of targeting them with advertisements based on their activity.
As Meta — the parent company of Facebook — explains (opens a new window), the goal is to lead web site visitors to reengage with a site owner in order to boost sales. Similar technologies, such as cookies, tags and web beacons, are used by many site owners. These technologies are also frequently included in mobile apps.
Bill Boeck SVP- Global Cyber Product & Claims
J.D. Power Electric Vehicle Index: Measuring Roadblocks to EV Adoption, Parity to Gas-Powered Vehicles | Business Wire
"Vehicle electrification has industry leaders grappling with billion-dollar decisions, and hyper-detailed data and analytics will help guide their decision making. We’ve created a smart and dynamic way to capture how the EV marketplace is performing in relation to gas-powered vehicles, and the index provides a heightened level of detail never seen before in this arena.”
Elizabeth Krear, vice president of electric vehicle practice at J.D. Power.
InsurTech/M&A/Finance💰/Collaboration
Insurance M&A Activity Slowed in 2022 but Still the Second Highest Year on Record
Despite various economic and political challenges, the number of mergers & acquisitions deals in 2022 meant it was the second-most active year in history. After record activity in 2021, insurance mergers & acquisitions did not maintain pace in 2022. However, despite various economic and political challenges, the number of deals was the second-most active year in history.
There were 708 M&A deals in 2022, down from 924 in 2021, according to insurance agency consulting firm MarshBerry. This represents a 23.4% decrease compared to 2021.
Record inflation, a faltering economy, labor shortages, interest rate hikes and a flurry of deals that closed in the fourth quarter of 2021 driven by sellers that were concerned about a potential federal capital gains tax increase in 2022 all impacted M&A last year.
“Despite the hurdles, 2022's final deal count will likely qualify as the second highest year on record," according to the “Q4 M&A Trends—Quarterly M&A Market Update" released by MarshBerry.
The top 10 most active buyers accounted for 345 of the 708 transactions (48.7%), while the top three—Acrisure, Hub International Limited, and Peter C. Foy & Associates Insurance Services—accounted for 19.8% of the total transactions
Five Lessons for Carriers to Launch Innovative Insurance Products
The insurance market may be ripe for disruption, but actually capitalizing on the opportunity can be difficult. The industry maintains high barriers to entry, heavy regulatory obligations, and is populated with well-established competitors. Survival for carriers depends on their ability to launch new products and services fast, and on budget, while tailoring them to evolving customer demands.
Executive Summary
As the insurance landscape is continuously evolving, Dan Woods, founder and CEO of Socotra, writes that it’s more important than ever for insurers to remain competitive by embracing modern technology. In this article, he shares what he sees as five important lessons for insurers to continue innovating in a time of rapid change and uncertainty.
The traditional incumbent approach of spending several years and millions of dollars on product development isn’t viable in today’s fast-paced insurance environment. It’s not only inefficient – it also leaves your business trailing the competition.
Insurers must forge a new path, powered by agile methodology. By maximizing resources and continually iterating toward a best-fit product, an agile approach can be a significant differentiator for insurance innovators. But in insurance, agile is still a relatively new and uncharted concept.
Here are five lessons that both carriers and InsurTechs can use to distinguish themselves from their peers:
Dan Woods, Socotra
Liberty Mutual lining up $1 billion sale - report
Liberty Mutual Holding Co. is exploring a sale of its Latin America businesses as part of the US insurer’s divestment plans from non-core markets, according to people with knowledge of the matter.
The Boston-based firm is working with JPMorgan Chase & Co. on the potential sale, which could fetch about $1 billion, the people said, asking not to be identified because the discussions are private. The assets include operations in Brazil, Chile, Colombia and Ecuador, the people said.
Liberty Mutual may kick off the sale as soon as the coming weeks, the people said. Some of the Liberty assets are attracting interest from global rivals including Zurich Insurance Group AG and Assicurazioni Generali SpA, the people said.
Events
InsurTech Hartford Symposium 2023
InsurTech Hartford Symposium is an industry event designed to push the boundaries of innovation in insurance by bringing together the latest technology and top talent
Stacey Brown, Founder, InsurTech Hartford