Personal auto
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Concern about vague cat modeling language was a theme at a Tuesday workshop.
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Commercial lines will remain bifurcated, with strong growth in property and weak growth in liability.
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Downward trends of DCC ratios are beginning to reverse, which could cause issues for long-tailed lines.
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Light cat losses, reserve development, and pricing trends are key topics in Q1.
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Workers’ comp releases continue to mask deteriorating reserves in 2023.
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This compared to a 20.6% YoY increase for February and January.
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He will manage the region’s sales and service teams.
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The company has retained Tony Ursano’s IAP for the raise.
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Mutuals struggle to react and adapt to a worsening loss environment.
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The downgrade reflects the company’s balance sheet strength, which AM Best assessed as weak.
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Headwinds weigh on carrier results, but premiums and surplus remain mostly stable.
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The homeowners' CoR fell over 32 points sequentially to 75.8%.
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It follows Las Vegas intermediary Insurvia, which launched an auction last year.
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Premium inflation holds, as loss-cost inflation trends continue to moderate.
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A January freeze saw temps drop to close to -50°F.
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The CPI all items index was at 3.2%, from 3.1% in January.
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Commercial lines difficulties continue to weigh down industry results.
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Sizeable investment returns masked 10-year high underwriting losses.
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Personal lines rate filings are rising, even as some inflation drivers slow.
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Root’s improved results make it an attractive acquisition, not a comeback story.
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Personal auto rates increased 19% during the year.
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The InsurTech’s shares gained over 50% in value on Thursday.
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The company posted favorable development in the last quarter of 2023.
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CSAA writes over 70% of its business in the Golden State.
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Auto-related CPI values continue to drop, while premium inflation hits new highs
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The CPI all-items index moderated to 3.1%, vs a 3.4% YoY rise for December.
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The changes will be up for discussion at a March 26 public hearing.
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The Manheim Used Vehicle Value Index dropped 9.2% year-on-year, to 204.0.
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A Branch spokesperson cited persistent inflation as a “significant challenge for home and auto insurance companies” and the reason for the staff reductions.
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December’s increase was an acceleration from 19.2% in November and October, with the CPI all-items index up 3.4% vs a 3.1% YoY rise for November.
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“The spring bounce was much more pronounced than expected in 2023, and prices slid just as rapidly after that bounce, finishing more calmly in December as expected,” said Cox Automotive’s Jeremy Robb.
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Cooling CPI metrics and improving loss ratios indicate a positive shift for the personal auto industry, but results are not yet back to where they need to be.
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It is understood that the cuts are based on a review of five-year loss ratios, and that agents above 70% will be impacted.
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Medical care prices – an indicator of medical inflation, a key input to long-tail loss costs – were up 0.2% YoY, after an 0.8% drop for October and a 1.4% drop for September.
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The ratings agency also downgraded carrier’s Long-Term Issuer Credit Ratings (Long-Term ICR).
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Personal auto carriers risk falling behind in the battle between loss costs and approved rate declines, while homeowners carriers’ double-digit filings might not be enough to keep up.
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While November’s decline was only slightly less than October’s, the move lower was on Manheim's radar, given the typical seasonal downward trend that paused in August and September.
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Reciprocals have been cropping up more recently, with a shift toward cat-exposed lines, giving investors a quick way to tap into the hard market with an expectation of a rich multiple at exit.
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The ratings agency cites ongoing deterioration in results for personal auto and homeowners’ lines, along with rising loss costs, driven by inflationary pressures.
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The Insurance Insider US Research team walks buyers through valuation considerations for InsurTech MGAs, as capital constraints point to further consolidation.
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Slowing loss cost trends may signal relief ahead, but only if carriers remain vigilant on rate action until we are past the peak.
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Inside P&C’s morning summary of the key stories to get you up to speed fast.
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This month marks a reversal in the pace of inflation for the segment, after auto insurance prices moderated to 18.9% in September from 19.1% in August.
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Kemper’s current results and historical trends suggest continued difficulty and remains a TBD story.
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Three states — California, New Jersey, New York — were responsible for adding five points to YTD combined ratio for 2023.
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The company also plans to ramp up its media spend in 2024 after having significantly slashed advertising budgets earlier this year.
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Inside P&C’s morning summary of the key stories to get you up to speed fast.
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Loss costs trends continue to increase in both physical damage and bodily injury coverages for nearly all of Progressive’s commercial auto products, CEO Tricia Griffith wrote in a quarterly update.
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The cuts amount to roughly 2% of the insurer’s US workforce.
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Ahead of third quarter earnings, many personal lines insurers are pulling several levers to right-size their operations, including conducting layoffs and reducing exposure.
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The company expects a net loss of between $140mn-$150mn for the quarter and a net operating loss in the range of $25mn-$35mn.
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Data shows Texas developments parallel some of the trends in other troubled states, but it is heading in from a stronger position.
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From 2020 to 2023, P&C replacement costs increased by 45% on average, whereas inflation for the overall US economy increased 15% within that same period, though the forecast expects that to change.
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Inside P&C’s morning summary of the key stories to get you up to speed fast.
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Pricing, reserves and uneven catastrophe losses will be the theme this quarter.
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On a year-on-year basis, the all-items index for September increased 3.7% before seasonal adjustment.
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This is the second downgrade faced by State Farm and its subsidiaries from AM Best in the last month.
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US commercial and personal auto insurer claim payouts combined were up between $96bn and $105bn for the period from 2013 to 2022.
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Rating agency cites elevated underwriting results from convective storms, cat events in core states of operation.
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This is the second month motor vehicle insurance prices have risen, following a 17.8% hike in July and a 16.9% increase in June.
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Inside P&C’s news team runs you through the key highlights of the week.
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The overall CPI rise in July was up by 0.2 points month-on-month from June, marking a reversal of the downward trend that started in June 2022.
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All policies will be non-renewed or canceled in accordance with state regulations, according to an announcement released ahead of the company’s Q2 earnings call on Monday.
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Inside P&C’s news team runs you through the key highlights of the week.
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Inside P&C’s morning summary of the key stories to get you up to speed fast.
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The carrier is set to achieve 20% rate increases in auto this year, with the same rate increase likely to be needed in 2024 to achieve its 2025 targets.
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Progressive has now reported three consecutive months of adverse development. The Inside P&C Research team takes a closer look.
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Inside P&C’s morning summary of the key stories to get you up to speed fast.
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Pricing, catastrophes and rising costs are headwinds for this quarter’s insurer results, but brokers should be buoyed by continued inflation.
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Following media reports last week that AAA had plans to pull out of the Florida insurance market entirely, the home and auto carrier "set the record straight” on Monday.
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It was the largest daily drop Progressive stock has experienced since August 2008.
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Sources said the Japanese insurer will pull back from the California personal auto market in June 2025 as it is set to exit the state’s admitted personal lines market on June 1, 2026.
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Motor vehicle insurance price increases moderated to 16.9% from 17.1% in May, while the all-items CPI slowed to 3.0% from 4.0%.
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Inside P&C’s morning summary of the key stories to get you up to speed fast.
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The decision applies only to policies issued through the company’s exclusive agency distribution channel.
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The capital injection comes over a year after Sigo Seguros raised $5.4mn in its seed funding round, co-led by Listen Ventures and Chingona Ventures.
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Inside P&C’s morning summary of the key stories to get you up to speed fast.
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The drop was among the largest declines in the index’s history and the largest since the onset of the pandemic in April 2020.
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Personal lines underperform predictions, while brokers and InsurTechs are a positive surprise (for now).
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Inside P&C’s morning summary of the key stories to get you up to speed fast.
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The fundraising includes $80mn of convertible preferred equity, which closed on June 23rd, as well as $25mn of long-term debt financing for Hagerty Re.
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Used car and truck prices declined 4.2% year on year in May, while new vehicle prices rose 4.7% in the period.
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This marked the third month-on-month drop in 2023.
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Recently released statutory data shows the US P&C industry loss ratio touching the 65% mark, the highest level in two decades.
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The loss for the month was 60% comprising losses from two wind and hail events.
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Inside P&C’s news team runs you through the key highlights of the week.
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April auto insurance premium data showed the second highest YoY change in more than 20 years.
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InsurTech carriers pivot to profitability vs growth.
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All eight major market segments had seasonally adjusted prices that were lower year over year in April.
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Inside P&C’s news team runs you through the key highlights of the week.
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Industry reserve releases mask adverse development trends, particularly in personal lines.
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Inside P&C’s morning summary of the key stories to get you up to speed fast.
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Although year-over-year headline CPI has decreased a bit, CPI levels pertaining to insurance are on the rise.
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This comes as the all-items consumer price index showed only a 5% gain.
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The private broker said replacement cost values in the homeowners' sector will also go up this year to offset increased construction costs and inflation.
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Root’s challenges generate lessons for other InsurTechs, as its stock value crash leads to a management exodus, and the banking collapse dries up funding needed to balance cash burn.
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The new 2022 stat data shows personal lines premium has grown year-over-year, but the loss ratios have been hit hard by catastrophes and loss cost inflation.
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Inside P&C’s morning summary of the key stories to get you up to speed fast.
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2022 statutory data is now available, and results show winners and losers
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Sentiment scores across US P&C segments dropped sequentially in Q4, though InsurTechs bucked the trend.
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Rate action for personal auto insurers has been increasing in 2023 to balance rising loss cost trends
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Inside P&C’s morning summary of the key stories to get you up to speed fast.
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Tesla understands the data-driven nature of insurance and is looking to grow its auto insurance exposure, but the focus is on cars first
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Inside P&C’s morning summary of the key stories to get you up to speed fast.
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Lemonade and Root both reported strong Q4 results, but will need to execute plans to near-perfection to turn things around.
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Inside P&C’s morning summary of the key stories to get you up to speed fast.
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In tandem, the ratings agency affirmed its "A" issuer credit and financial strength ratings on Farmers and its core operating subsidiaries.
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Inside P&C’s news team runs you through the key highlights of the week.
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Inside P&C’s morning summary of the key stories to get you up to speed fast.
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This compares to a 14.2% annual increase in auto insurance prices in December, while the overall index slightly moderated to a 6.4% gain from 6.5% in December.
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If January’s trends are any indication, the next step for Florida’s plaintiff attorneys will be to redirect their efforts to another piece of the market.
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Inside P&C’s morning summary of the key stories to get you up to speed fast.
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The Manheim Vehicle Value Index increased 0.8% in December.
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Inside P&C’s morning summary of the key stories to get you up to speed fast.
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For the same period in 2021, the company reported a combined ratio of 98.9%.
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Poor macroeconomic conditions loom, but reinsurers, brokers and personal lines carriers are expected to share positive results.
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The uptick compared with decreases of 0.3% in November, 2.2% in October and 3% in September.
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InsurTechs use of “me-too” filings and competitor rates have us wondering, where is the innovation?
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Inside P&C’s morning summary of the key stories to get you up to speed fast.
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Inside P&C walks you through the highlights of 2022.
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Inside P&C’s morning summary of the key stories to get you up to speed fast.
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Inside P&C’s morning summary of the key stories to get you up to speed fast.
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The annual increase represents the smallest 12-month increase since the period ending December 2021.
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Though Carvana’s financial situation might cause InsurTechs to think twice about an embedded partnership, the auto dealer’s woes could lead to an easing of loss cost pressures for personal auto insurers.
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Inside P&C’s morning summary of the key stories to get you up to speed fast.
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The Manheim Vehicle Value Index declined 14.2% year-over-year to 199.4, dropping below 200 for the first time since August 2021.
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InsurTechs’ mounting losses and continuing cash burn combined with reinsurance market hardening could spell trouble for the sector.
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While Allstate may be beyond the worst of the reserve charges, execution of initiatives needs to go smoothly for it to get back on track.
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The company paid out $1.63bn for physical damage claims in the first nine months of the year, which exceeded earlier projections of $1.33bn.
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Inside P&C’s morning summary of the key stories to get you up to speed fast.
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Third-quarter statutory data reveals premium growth, worsening loss ratio because of increased loss cost trends and Hurricane Ian.
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Our Trump/Biden note from yesterday discussed the rotation from growth stocks to value stocks playing out over 2022. Unfortunately, insurance technology stocks have had it the worst, with Lemonade stock down 49%, but still doing relatively better than Root (down 86%) and Hippo (down 80%).
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Though still significantly elevated, the CPI appears to have peaked in the short term, which may give carriers a chance to catch up on rate.
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The company retained $10mn of $27mn in gross losses from Ian, which accounted for 3.4 points on the loss ratio.
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Medical inflation – a key input to long-tail loss costs – increased 5.4% year on year but declined 0.5% from September to October.
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Management said there are early signs that inflationary pressures – which have pushed severity in personal auto in recent months – are easing.
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The decline was smaller than previous months, with September clocking in at 3% and August's decline at 4%.
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Progressive’s superior digital distribution and widening auto margins put it far ahead of the competition.
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Inside P&C’s morning summary of the key stories to get you up to speed fast.
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The firm reported better than anticipated earnings factoring in Ian, but a slowing economy could cloud the outlook.
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A challenging legal atmosphere and drift in loss cost components add difficulty to the task of tallying ultimate losses.
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Inside P&C’s morning summary of the key stories to get you up to speed fast.
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In August, the CPI moderated to 8.3% compared with a record high of 9.1% in June.
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Hurricane Ian, interest rate impact and the cooling economy will be the main themes this earnings season.
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The Manheim Vehicle Value Index declined to 204.5, showing signs of returning to prices from a year ago, down 0.1%.
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Inside P&C’s morning summary of the key stories to get you up to speed fast.
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Auto insurers look set to generate a larger share of losses than with most US wind events.
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KCC has added a loading for litigation costs to the storm loss estimate for the first time.
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Hurricane Ian’s total effect is still unknown, but lessons from Hurricane Irma give insight into potential outcomes.
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Inside P&C’s news team runs you through the key highlights of the week.
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Inside P&C’s morning summary of the key stories to get you up to speed fast.
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Claims analysis shows slow reactions to negative trends can affect several quarters, but carriers who emerge strong will be able to pursue growth faster than the competitors who are always playing catchup on loss cost trends.
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