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The Connected Podcast

News and Events in the Insurance Ecosystem

In the latest segment of The Connected Podcast, we're diving into the evolving landscape of the insurance ecosystem, particularly within the InsurTech sector. Full-stack InsurTech companies are striving to achieve profitability, aiming to demonstrate financial success by next year. Matteo Carbone, founder of the IoT Insurance Observatory, offers insights into the industry's transformative journey.

As the second half of 2024 unfolds, the sector faces regulatory challenges and a shift towards digital solutions. InsurTech Analyst Harry Slade explores trends that will shape the coming months, marking a pivotal period characterized by growth and adaptation.

The primary insurance market is adjusting to necessary price hikes in property and casualty (P&C) reinsurance. Swiss Re's CFO John Dacey reports an 8% price increase in July renewals, alongside a 9% year-to-date rise, indicating a significant growth in treaty premium volume. Updated loss models have increased loss expectations by 10%, underlying the need for higher prices in undervalued areas, especially concerning natural catastrophes.

Additionally, the expiration of the National Flood Insurance Program (NFIP) looms, potentially disrupting home sales this fall. NFIP, covering 4.7 million policyholders and $1.28 trillion in assets, needs reauthorization by September 30. Failure to do so could hinder mortgage acquisition in flood-prone areas. Financial policy analyst Jaret Seiberg stresses the critical need for Congress to act to avoid disruptions in the housing market.

Key Highlights:

• Wildfires in Texas: Texas’ top emergency manager has called for an independent firefighting aircraft division following a devastating wildfire season. Projections suggest wildfires could burn through up to 10 million acres annually by 2025, impacting insurance claims and risk management strategies.

 
• State Farm Lawsuit: A class action lawsuit against State Farm progresses with allegations of undervaluing totaled vehicles. This could set a precedent affecting vehicle valuation methods across the insurance industry.

 
• Rising Car Insurance Costs: Comprehensive car insurance policies have increased significantly, with full coverage averaging $2,329 annually. Inflation and rising vehicle repair costs are cited as primary factors.

 
• Reinsurance and Cat Bonds: AM Best reports a record issuance of catastrophe bonds. Parametric-triggered reinsurance solutions are becoming more prevalent, with examples like Hannover Re's parametric-triggered cyber catastrophe bond.

Stay tuned for more updates that shape the insurance industry.

Corporate News:

Cincinnati Financial Corporation announced a quarterly cash dividend, maintaining a remarkable streak of 64 consecutive years of annual increases. Stephen M. Spray, President and CEO, emphasized the company's strong capital position and commitment to shareholder value.

Advanced technologies are transforming the investment property insurance market. APE Analytics revealed that insurers using AI and machine learning have seen a 5% improvement in loss ratios and a 15% increase in premiums. Michelle Afflalo of Ives Insurance Services highlighted how drones and infrared technology are enhancing underwriting processes.

A significant legal b