3 Things – 2023 Hurricane Season, Insurance Landscape Shifts & Generative AI

Hello Friends!  June has arrived along with Hurricane season, this week we are following expectations for the 2023 cycle, more changes in the insurance landscape and insurtech growth, fundraising and AI advancements.  Here are the three things we learned:


2023 Hurricane Season Expectations: Insights and Potential Impacts

The 2023 hurricane season began this week, and experts are offering valuable insights into what we can expect. NOAA predicts a near-normal season, with a forecast range of 12 to 17 named storms. However, one significant factor influencing storm development is El Nino conditions that are expected in the Pacific.  Upgraded models will be put to the test to enhance prediction accuracy.  The recent release of CoreLogic’s Hurricane Risk Report sheds light on the potential risks faced by millions of residences. Over 32 million single-family homes and 1 million multi-family residences are at moderate or greater risk of damage from hurricane-force winds. On the reinsurance front, the industry anticipates a more orderly renewal process for Florida-based property insurers this year.  Reinsurers, who had previously pulled back, are now showing increased participation and an overall appetite for renewals, indicating a more structured approach to managing risks.  Rhandahl Fuller, managing director and Florida practice lead for Guy Carpenter & Co., confirms this trend, stating, “So far, what we’re seeing is a much more orderly renewal process than what we saw in 2022.”


Changes in the Insurance Landscape

The insurance industry continues to experience significant changes that are reshaping the landscape. State Farm has made a notable decision to no longer accept new applications for business and personal lines property/casualty in California. This move comes as a result of increased risks and higher construction costs caused by inflation, particularly due to the rising threat of wildfires in the state.  In another development, Liberty Mutual has recently sold its Latin American businesses to Talanx for a substantial $1.5 billion. With a focus on sharpening operational focus and adapting to a rapidly changing world, Liberty Mutual is following in the footsteps of recents moves by other large carriers.  A sign of the conservative posture carriers are taking in this current macroeconomic environment.  W. R. Berkley Corporation is embracing new opportunities in the insurance market by establishing Berkley Specialty Excess. This specialized division will provide excess liability coverages, initially targeting the environmental and energy industries. W. R. Berkley Corporation recognizes the potential in the specialty excess market and is strategically positioning itself to capitalize on these attractive opportunities.


Insurtech: Growth, Fundraising, and AI Advancements

Cyber, embedded insurance and generative AI are all trends we expected to see take form in the next evolution of insurtech.  Cowbell and Skyward Specialty Insurance Group have joined forces in a partnership agreement that expands Cowbell’s coverage and capacity for its Cyber Liability and Prime Tech insurance programs. Through this collaboration, Cowbell gains access to Skyward Specialty’s industry partners, enhancing its ability to provide comprehensive coverage to small and medium-sized enterprises seeking cyber insurance. Cover Genius, an embedded insurtech platform, has achieved significant milestones by selling over 25 million policies, protecting more than 14 million customers. With its embedded insurance solutions tailored for digital companies worldwide, Cover Genius has witnessed substantial growth on its consumer site, XCover.com, adding 6 million new customers in the past six months alone. Sixfold, a New York-based startup, has secured $6.5 million in seed funding for its generative AI software. This innovative technology enables underwriters to upload manuals and data, which are analyzed by generative AI algorithms to provide personalized recommendations. The global generative AI in insurance market is expected to reach $5,543.1 million by 2032. The founders of Sixfold came from Unqork.  AI has certainly been the buzz lately and this demonstrates the growing significance of generative AI in driving innovation and value creation within the insurance industry.

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