How AI Is Redefining The Future Of Insurance  May 12th 2023

LexisNexis: Auto Claim Severity Up 35% over Pre-Pandemic Rates

Claim severity for both bodily injury and property damage both increased by 35% since 2019, while collision claim severity has jumped 40%, LexisNexis Risk Solutions says in a new report.

The data broker’s 2023 U.S. Auto Insurance Trends report says the amount of traffic on US roadways plummeted after the onset of the pandemic in March 2020, but volumes returned nearly to pre-pandemic levels last year. Total miles driven in 2022 were just 5% lower than in 2019.

Intelligent ingestion: The start of commercial digital insurance

For over a decade, we have pretended to be paperless. We tout the fact that the file cabinets, the 7-part specialized file folders, and massive mail rooms have all been eliminated and reduced, and claim that we are paperless. But we know it isn’t real. Today’s paper is PDFs, excels, and adobe. The filing cabinets have been replaced with digital folders and the mail rooms with emails and digital workflows. But in truth, we have been kidding ourselves. Insurance isn’t paperless; it just pretends to be. Yet it doesn’t have to be that way. The technology to become truly digital exists. We just need to take the leap.

Michael Reilly, Managing Director, Accenture

Auto Total Loss Small Changes Can Help Yield Big Results

More than 27 percent of collision claims today are deemed total losses.

Throughout the years, I, along with the rest of the industry, have watched this number rise. In fact, according to LexisNexis® Risk Solutions data, it has been steadily increasing since 2017.

This is concerning. Not only because as an industry, we know how difficult these claims are for customers, but it is also about what the increase could potentially mean to claims departments: longer cycle times, the potential for a poor customer experience and reduced profitability.

These can be very complex claims to resolve, and the number of them is increasing.

Frank Cesario, Director of U.S. Claims, LexisNexis® Risk Solutions

GEICO reports collision claim decrease & severity increase, profit off higher rates

Berkshire Hathaway, parent company of GEICO, reports that collision claim frequency decreased 6-7% while severity rose 7-8% during Q1.

GEICO says average auto policy premiums were higher during the quarter effectively increasing profit by $72 million “as average premiums per auto policy increased 15.2% due to rate increases, offset by a decrease in policies-in-force of 2.4 million (13.0%) since March 31, 2022.”

Jain Talks Reinsurance: Berkshire Could Lose $15B in Florida

While the leader of Berkshire Hathaway’s insurance operations described Jan. 1 property-catastrophe reinsurance pricing as disappointing, the “day in the sun” came at April 1, allowing Berkshire to write almost as much as it can.

Ajit Jain also said the potential downside of deploying all that capacity is a potential $15 billion loss if a hurricane hits Florida this year.

Speaking during the annual meeting on Saturday, Jain addressed the question of why Berkshire has been sitting on the sidelines of the property-cat reinsurance market, and described the market conditions he witnessed at year-end 2022.

Liberty Mutual posts Q1 2023 results, reports net loss

Liberty Mutual Holding Company has reported its Q1 2023 results, reporting a net loss of US$74 million primarily due to catastrophe losses from severe weather storms across the Midwest. The insurer reported a combined ratio of 103.2%.

Net written premium for the quarter was US$11.9 billion, a 2.8% increase from the same period in 2022. Its global retail markets were up 5.1% at US$8 billion while the global risk solutions divisions dipped 3.5% to $3.815 billion. Revenue experienced an increase of 7.5% to US$12.7 billion, up from US$11.9 billion from the previous year.

"Insurance has penetrated all industries except gaming" –CEO

Waffle Insurance on making gaming insurance a North American reality

Gaming is a multi-billion dollar a year industry, yet it remains untapped by insurance companies as an expansive line of coverage. Its risks appear in other traditionally insured fields, which means writing coverage comes with well-established precedents, yet gaming is not traditionally seen as a viable area of opportunity.

“Insurance has penetrated all industries except gaming,” said Waffle Insurance co-founder and CEO, Qunetin Coolen. “There are a lot of technical and behavioural prevention methods out there that are useful to gamers, but there is no product to protect against careless mistakes or seasoned hackers. That’s where we step in.”

Insurance Business spoke with Coolen about why Waffle Insurance has launched US gamer insurance, what types of coverage is offered to prospective players and how the role of brokers will evolve alongside changes in consumer expectations.

“There is so much opportunity in gamer coverage”