Welcome to The Connected Podcast, where we delve into the latest news and events shaping the insurance ecosystem. Join us as we explore the intricacies and innovative changes impacting the industry today.
In this episode, we shine a spotlight on risk-based pricing in property and casualty insurance, a practice pivotal in maintaining financial stability for insurers and offering fair premiums to low-risk consumers. Sean Kevelighan, CEO of the Insurance Information Institute, warns against eliminating risk-based pricing, as it would force lower-risk consumers to subsidize higher-risk ones, potentially destabilizing insurers' financial outcomes.
The episode further delves into the contentious factors like credit scores and geographic location in pricing, with a detailed defense of their relevance through the lens of the latest report by the Triple-I. Additionally, we discuss the competitive dynamics in the insurance sector, noting that while large insurers dominate advertising, they often downsize during adverse market conditions, accounting for just 2.9% of property and casualty companies being classified as "Nationals" today.
Another focal point is the recent industry financial performance amidst catastrophic events such as the California wildfires. Here, the sector managed to secure an $11.6 billion underwriting profit in the first half of the year, reflecting its intricate balancing act in maintaining profitability despite significant reserve adjustments from historical writings, with notable contributions by companies like State Farm.
Recently, artificial intelligence has been a hot topic, with Senior Vice President Andrea Ward from CRC Insurance Services addressing the uncertainty AI brings to risk assessment and claims processing. Despite potential challenges, there's optimism about AI enhancing the industry in the long run. Moreover, advancements by Expert.ai with their updated EidenAI Suite reflect the intent to improve processing speeds, reduce risks, and enhance scalability.
The episode also examines driver safety insights provided by Progressive Insurance, with a survey on young drivers aged 18 to 25. The findings stress the importance of supervised practice in reducing crash rates among teens, aligning with National Teen Driver Safety Week's call for a 70-hour supervised driving standard.
From a financial perspective, Marsh McLennan reports an impressive 11% revenue increase to $6.4 billion for the third quarter of 2025. Yet, the evolving landscape of insurance shopping continues to be reshaped by strategic partnerships like that between Cambridge Mobile Telematics Inc. and TransUnion, which introduces portable consumer driving scores, spotlighting telematics-driven safer driving incentives.
Lastly, we highlight significant industry developments, including the partnership between One Inc and Copart, Inc. at ITC Vegas 2025 aimed at streamlining lienholder payments for total loss vehicle claims. Similarly, the expansion moves by Stand into the challenging Florida market showcase an innovative approach to insuring high-risk properties post a $35 million Series B funding round.
Wrapping up, we preview the upcoming IPO from Exzeo Group, seeking to achieve a $2 billion valuation—a testament to the resilience and growth potential within the insurance technology realm amid contemporary challenges. Dive in for a comprehensive look at these transformative shifts driving the insurance industry's future forward.
Triple-I defends risk-based pricing, warns against government intervention
