InsurTech/M&A/Finance💰/Collaboration
1Q2023 Results: The Insurtech Rollercoaster: Riding the Waves of Innovation and Challenge
The first quarter of 2023 has proven to be a critical period for insurtech companies as they strive to disrupt the traditional insurance industry landscape. Root, Hippo, and Lemonade are among the leading names in this emerging market, and their 1Q23 results provide valuable insights, as well as mixed results, into their progress, areas for improvement, and the challenges they face compared to incumbent insurers. Their reliance on technology alone has not proven to be a sufficient catalyst to propel them into profitability or to capture significant market share.
Over the past 12 months, Lemonade, Root, and Hippo have exhibited varying degrees of revenue growth and continued net losses across the board. I particularly appreciate the 12-month trailing data, as it offers a comprehensive view of financial performance, taking into account seasonality and smoothing out quarterly fluctuations. A comparison of their revenues, net incomes, and general and administrative (G+A) expenses reveals intriguing insights into the growth trajectories and operational efficiency of these three insurtech companies.
Kaenan Hertz, Managing Partner, Insurtech Advisors
InsTech Insurance Innovation Survey 2023: 80% of insurance tech buyers see opportunity for better provision
80% of insurance tech buyers see opportunity for better provision
The 2023 InsTech insurance innovation member survey has just been released highlighting that there’s still plenty of room for improvement when it comes to insurance technology provision.
Private Equity in Collision Repair: More Committed Than Ever
Scale is paramount to performance in the consolidation of the $36 billion collision repair market. Private equity provides the fuel that accelerates the consolidation. And private equity firms continue to invest more and more capital with implications for MSOs and single shops that cannot be ignored.
Dave Roberts and Chris Lane, – Focus Advisors Automotive
News
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”
AI in Insurance
How AI Is Redefining The Future Of Insurance
From predicting fraud to personalising policies, the impact of artificial intelligence could be profound.
The Way Ahead Insurance is by nature a cautious beast. Adoption of AI-driven tools and techniques will be a slow process. Its trickle into new areas of the industry will start with experiments and proof-of-concepts – much like Brit Insurance’s use of aerial imagery to validate natural catastrophe claims. As the value of its various applications across everything from underwriting to customer experience is made clear, attitudes and appetites may begin to change. “Slowly but surely, we’ll start to move the inertia,” says Davison.
One might imagine that AI itself could come up with new forms of insurance altogether. So what was ChatGPT’s views about that? “Yes, AI has the potential to come up with new forms of insurance that are better suited to the needs of customers,” it said.
“By analyzing vast amounts of data and identifying patterns and trends, AI algorithms can identify emerging risks and develop new insurance products to address them.” If that’s true, it’s yet another reason why the future belongs to those who embrace this technology at a business-wide level. “This isn't just an ‘IT problem to be solved’,” emphasises Wharton. “This is a fundamental business opportunity.”
Is the insurance market ready for AI technology?
There is no doubt that everyone is talking about AI and the most talked about word generates buzz at all ages. This is even among adults who want to understand what the fuss is about and whether the tool can help them in various areas. To understand how much interest the word generates, you can find an astonishing number of 9,550,000,000 Google searches.
But with all due respect to the buzz, we are talking about the insurance market, a heavy and relatively outdated market. There is no way that this technology is already ripe for the insurance industry. It can already help insurance companies and agencies with their ongoing operations. It is a challenge to overcome regulatory barriers, security issues, and navigate complex product terms and language.
We at Insurtech Israel decided to challenge this issue and check whether AI tools can indeed be used today in the insurance industry.
Yarden Peled - Insurtech Israel News
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AM BEST TV -- Panel on Embedded Insurance: Connections Between Carriers, Distributors Becoming Seamless
Industry experts at Riskworld, the RIMS 2023 annual conference, react to a projection that the market for embedded insurance could reach $2.3 trillion in 2032.
Panelists: Bryan Davis, head of VIU by HUB Christine Panet-Raymond, Head of Affinity, Programs and A&H, NA, WTW Eli Sanchez Escobedo, Associate Director, AM BEST