3 Things – Navigating Challenges, Comm Lines Developments & Insurtech Empowering Industry

Hello Friends! It was another week with lots to unpack and many headlines to read.  This week we are following large carriers navigating challenges, key developments in commercial lines and insurtech innovations that are looking to empower the industry.  Here are the three things we learned:


Navigating Challenges: Updates from Nationwide, Liberty Mutual, Progressive, and Allstate

Large carriers, including Nationwide and Allstate, are grappling with persistent challenges stemming from economic conditions and weather events. Nationwide has implemented specific business measures aimed at constraining the growth of new personal lines and small commercial quotes from agencies, indicating a strategic shift in focus for these lines of business. In a similar vein, Liberty Mutual opted to divest its Liberty Seguros operations in several European countries, namely Ireland, Northern Ireland, Portugal, and Spain, by selling them to Generali Group for a substantial $2.5 billion. CEO, Tim Sweeney continues to speak about sharpening their operational focus.  Meanwhile, Progressive faced difficulties with auto loss costs, reflected in their May results, which revealed a combined ratio of 99%, surpassing their target. On the other hand, Allstate announced a significant catastrophe loss of $885 million in May. However, they managed to partially offset these losses through favorable reserve estimates. To enhance profitability, Allstate has implemented an auto rate increase of 9.3% across ten locations. Jess Merten, Chief Financial Officer of The Allstate Corporation, emphasized the company’s commitment to improving profitability through significant rate adjustments in their auto insurance business.


Key Developments in Commercial Lines, Chubb Cyber Quoting, Core Specialty Medical Stop-Loss, and Acrisure IPO Plans

Willis Towers Watson issued their first quarter of 2023 Commercial Lines Insurance Pricing Survey (CLIPS).  The headline was that the industry witnessed a continued increase in U.S. commercial insurance rates, particularly in Commercial Property and Commercial Auto. However, Workers’ Compensation and Directors & Officers Liability experienced a persistent decline. The surge in rates was primarily driven by the impact of high inflation. Chubb has introduced Cyber Central, an innovative quoting platform tailored for cyber risks. This platform streamlines the process of quoting and issuing Cyber, Technology E&O, and Miscellaneous Professional Liability coverages, equipping agents and brokers with rapid insights and support in the dynamic cyber landscape. Additionally, Core Specialty Insurance Holdings Inc. has acquired Standard Life and Accident Insurance Co., marking its entry into the medical stop-loss market. This strategic move strengthens Core Specialty’s position in the insurance market and enhances its range of offerings. Lastly, insurance broker Acrisure LLC is eyeing an IPO in 2024, aiming for a valuation surpassing $20 billion. As market conditions improve, Acrisure seeks to capitalize on investor receptiveness to riskier investments and further expand its reach in the insurance, reinsurance, and real estate sectors.


Insurtech Innovations Look to Empower the Industry

Insurtech companies are continuing to focus on value creation with strategic partnerships, significant funding rounds, and groundbreaking technologies. Lemonade has made waves with its two-second AI insurance claim settlement, showcasing the potential of AI and machine learning in transforming insurance practices. While receiving mixed responses from the industry, Lemonade’s achievement underscores the opportunity for insurers to leverage AI to innovate and automate especially in the area of customer experience.  Precedent closed a $9 million seed funding round to expand its Digitized Demand Handling technology, streamlining the claim handling process and providing efficiency gains for insurers. Finally, Driver Technologies secured a $6 million strategic funding round, supporting the adoption of their AI-powered dash cam and safety alert app in insurance-backed programs. These developments collectively highlight the transformative power of insurtech, ushering in a new era of efficiency, customer experience, and industry-wide innovation.

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