CNA Recognized for Setting the Example for P&C Insurance Industry Transformation by Insurance Technology Leader Guidewire  May 19th 2023

CNA Recognized for Setting the Example for P&C Insurance Industry Transformation by Insurance Technology Leader Guidewire

Guidewire (NYSE: GWRE) recognizes CNA, one of the largest U.S. commercial property and casualty insurance companies, for its dedication to delivering P&C insurance products and services as a Guidewire customer for the past 20 years.

“We are grateful for the trust CNA placed in Guidewire’s goal of transforming the P&C insurance industry.”

First selecting Guidewire ClaimCenter in April 2003 as the technology cornerstone of an enterprise-wide initiative to enhance its claims operations, CNA deployed ClaimCenter to thousands of adjusters worldwide in 2005. This was at a time when many insurers were contemplating or were building claims systems in-house, while others were in a wait-and-see mode. CNA took action becoming not only one of Guidewire’s first customers but also part of the early group of insurers who blazed the trail, which others then followed.

The company expanded its Guidewire relationship with the selection of Guidewire PolicyCenter in 2006 to streamline its underwriting processes. CNA launched its loss-sensitive and standard workers’ compensation programs in 2016 and is now on a forward-looking journey to the cloud with the move of its specialty products and migration of PolicyCenter to Guidewire Cloud.

“We selected Guidewire ClaimCenter to help CNA’s goal of establishing a leading industry position in claim processes as well as improve customer service and enhance the accuracy and efficiency of our underwriting operations,” said Radha Kanakamedala, vice president of applications at CNA. “Guidewire has been a true supporter of CNA through our business transformation process.”

Auto Insurance Trends Report

Auto Insurance Trends Report Data Offers Key Insights to Drive Profitability

The annual LexisNexis® Risk Solutions Auto Insurance Trends Report explores how trends in U.S. consumer auto insurance shopping, driving violations, claims frequency and severity, vehicle safety features and more are impacting the auto insurance policy lifecycle from quote to underwriting to claims.

Throughout 2022, U.S. auto insurance carriers continued to navigate a precarious mixture of increased costs, limited vehicle sales, rising accident severity and regulatory pushback on proposed rate increases, setting the market on a collision course away from profitability. 

The 2023 report examines key trends from the previous year and offers insights to help insurers make better business decisions now – and into the future.

Download the Report to Discover:

• What is a hard insurance market and how long will it last?
• Key factors contributing to the rise in claim severity.
• The fall and rise of policy shopping and switching.
• Consumer and insurer sentiments towards telematics usage and adoption.
• How the rebound of miles driven impacts major and minor violations for assessing risk.

In search of insurance data quality

The accuracy and completeness of insurance data can make all the difference between a successful business and a disastrous one. As such, data quality management is critical to any insurance company’s operations.

Insurance companies deal with large amounts of data daily. High data quality is critical for several insurance processes, including the following:

Underwriting: Insurance underwriters rely on accurate data to assess the risk of insuring a particular individual or business. The accuracy of this data can affect the premiums charged, the policy terms, and the overall profitability of the insurance company.

Unfortunately, most insurers struggle to attain high degrees of accurate underwriting data. At times, agents and agencies provide inaccurate information about a risk being priced. This is especially problematic on smaller policies when taking the time to “dig deep” for accurate data isn’t always seen as worthwhile.

Insurers have many means of validating submitted policy data through third-party data sources today, but this adds expense and time, and the third-party data isn’t always reliable. Carriers relying on independent agents and brokers must balance their desire for accurate data against the “hassle factor” it creates for the agency or broker, especially when time is of the essence in providing a quote, as they have other carriers they write business with.

Angela Harter, assistant vice president of Data Strategy and Quality Assurance, CLARA Analytics

Inflation and Insurance Replacement Costs

IIS Executive Insights Economics Expert: Dr. Michel Léonard, PhD, CBE, Chief Economist and Data Scientist, Insurance Information Institute and Riley Conlon, Research Analyst, The Insurance Information Institute

Inflation and Insurance Replacement Costs: Key insights into the relationship between inflation and insurance replacement costs as basis for P&C / Non-Life capital allocation line performance, and solvency.

Synopsis/Summary: This executive briefing looks at the relationship between overall inflation and insurance replacement costs in six of the world’s largest insurance markets: the U.S., Canada, the U.K., the E.U., Japan and Korea.

Specifically, the briefing’s analysis focuses on P&C/non-life replacement costs for commercial and personal property and personal and commercial vehicles including construction materials, auto and auto parts and labor. The results provide correlation estimates across and within each country, organized first around property and then vehicles, identifying statistically significant and non-significant coefficients that confirm and question received expectations.

The briefing’s analysis builds on the authors’ research at the Insurance Information Institute on overall inflation and P&C replacement costs in the U.S.. Applications include business strategy, planning, and maximizing underwriting performance and solvency during times of economic stress such as the current high inflation environment.

More States Adopting Professional Standards for Public Adjusters

A movement to establish professional standards for public adjusters gained ground this year, with lawmakers in five states passing bills that impose new controls over a trade that already requires a license in 46 states.

Brian S. Goodman, general counsel of the National Association of Public Insurance Adjusters, says his organization welcomes the new rules.

“I don’t view licensing as the government getting involved in our business,” he said. “It’s a recognized legal profession. It’s a way to protect the profession and a way of protecting the public.”

A major scandal involving Mitchell Adjusting International in Texas — which is accused of stealing $7.9 million from policyholders that include several churches — brought negative publicity for public adjusters.

“Lawyers go bad sometimes, or doctors,” Goodman said. “You can’t root out every possible bad actor just by having licensing in place.”

There is no indication that elected officials have any interest in abolishing the public adjuster trade. In fact, the Texas Senate on Wednesday unanimously approved House Bill 1706, a measure that would prohibit insurers from writing polices that bar the use of public adjusters. The bill now goes to Gov. Greg Abbott for final approval.

Revealed – factors behind underwriting loss for P&C industry

Inflation and catastrophes contributed to the underwriting loss suffered by the property & casualty insurance industry in 2022, according to a new report by the Insurance Information Institute (Triple-I) and Milliman.

The report, titled “Insurance Economics and Underwriting Objections: A Forward View,” revealed that the net combined ratio for the P&C insurance industry was 102.4 in 2022, with personal lines suffering underwriting losses partially offset by gains in commercial lines.

Presented at a virtual webinar for Triple-I members, it identified a significant difference in performance between personal and commercial lines, with a combined ratio of 109.9 for personal lines and 94.8 for commercial lines. This represents the largest difference between the two segments in at least 15 years.

Massachusetts bill aims to reduce auto insurance rate disparity

A bill sponsored by Massachusetts State Senator Pavel Payano aims to reduce “racial and socioeconomic inequities in auto insurance premium pricing” by altering how ZIP codes are weighed in underwriting.

If passed, the bill (S703) would disallow rating plans for private passenger motor vehicle insurance including territorial classifications from assigning a weight of more than 75% to individual territorial loss cost indication and no less than 25% to the state-wide average loss cost indication. Individual territorial loss cost and statewide average loss cost indication would need to be actuarially justified.

Every insurer in the state that writes private passenger auto would be required to comply with these regulations within 60 days of the bill’s passage.

MoneyGeek recently released the results of a study that looked at how auto insurance premiums correlate with race by examining data for 69 U.S. cities that each contain more than ten ZIP codes. The study found 75% of these cities had a negative correlation between the cost of auto premiums and the percentage of white residents who live within that ZIP code.