The Insurance Letter

P&C Insurance News | Official X account for The Insurance Letter, sharing insights on the P&C insurance industry.

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[Justin Ryan ᯅ @justinryanio]

This is one of the coolest Apple Vision Pro experiences yet.

Retrocade lets you place a lifelike arcade cabinet in your space or step into a virtual arcade and play classic games.

It’s a blast. Check it out when it launches on Feb 5.

[The Insurance Letter @InsuranceLetter]

🚨 Farmers Insurance recently announced agent commission changes that go live in 2025.

Zurich is expected to announce even more changes today.

[The Insurance Letter @InsuranceLetter]

Farmers Insurance plans to reduce agent commission rates for home and auto policy renewals by 1.5 percentage points starting in 2025, aiming to drive new business.

Auto renewal commissions will drop to 5%, homeowners to 6%, and umbrella policies to 3%.

Source: P&C Specialist

[The Insurance Letter @InsuranceLetter]

Insurify analyzed its database of 97 million auto insurance quotes and found auto insurance surged 15% nationally in the first half of 2024.

Insurify projects auto insurance will rise a total of 22% to $2,469 nationally by the end of 2024.

[The Insurance Letter @InsuranceLetter]

Farmers Insurance implemented the largest rate increases among personal lines carriers in the first half of 2024.

Their combined ratio has improved from 111.6% to 95.2% YOY, per P&C Specialist.

[The Insurance Letter @InsuranceLetter]

Homeowners insurance premiums show stark county-by-county differences due to disaster risk and reinsurance pricing, a new report from the National Bureau of Economic Research reveals.

[The Insurance Letter @InsuranceLetter]

A recent NerdWallet survey reveals that 21% of auto insurance customers admit to lying on their applications, primarily to secure lower premiums.

This behavior is more prevalent among younger consumers, with 42% of 18-27 year-olds admitting to dishonesty.

[The Insurance Letter @InsuranceLetter]

Link to the report by Insurify. Solid information.

👉 https://t.co/aGx9HR9ppb

[The Insurance Letter @InsuranceLetter]

📈 Auto insurance costs across the industry are on the rise!

In the first half of 2023, rates soared by 17%, according to a report by Insurify, and there's more to come!

They also predict an additional 4% increase by year-end.

Currently, the national average car insurance policy stands at $1,668, but Insurify forecasts it'll climb to $1,742 by the end of 2023.

Blame it on inflation, pricier auto parts, natural disasters, and big losses.

Source: Insurify via Business Insider. Link below. 👇

#InsuranceTrends #CarInsuranceStats

[The Insurance Letter @InsuranceLetter]

🌪️ Progressive's Financial Tempest: Hurricane Ian's $1.1 Billion Impact on Reserves

In 2023, Progressive faces a staggering $1.1 billion reserve increase, with a substantial 40% linked to Florida claims post-Hurricane Ian.

In contrast, State Farm released $2.75 billion in reserves, Geico's parent Berkshire Hathaway dropped $2.15 billion, Liberty Mutual reduced its reserves by over $610 million, and Auto-Owners saw a $250 million fall in reserves.

Source: S&P Global Market Intelligence

#InsuranceInsights #Progressive

[The Insurance Letter @InsuranceLetter]

P&C Carrier CEOs Ranked by LinkedIn Followers (September 2023):

1. Warren Buffett (Berkshire Hathaway) - 69,544 followers
2. Daniel Schreiber (Lemonade, Co-CEO) - 28,025 followers
3. Peter Zaffino (AIG) - 23,385 followers
4. Kirt Walker (Nationwide) - 17,004 followers
5. Shia Wininger (Lemonade, Co-CEO) - 15,635 followers
6. Wayne Peacock (USAA) - 15,387 followers
7. Tim Sweeney (Liberty Mutual) - 11,233 followers
8. Alex Timm (Root Insurance) - 7,802 followers
9. Richard McCathron (Hippo Insurance) - 7,735 followers
10. Tricia Griffith (Progressive Insurance) - 6,632 followers
11. Tim NeCastro (Erie Insurance) - 4,979 followers
12. Tom Troy (CSAA, Outgoing CEO) - 3,984 followers
13. Bill Westrate (American Family Insurance) - 3,386 followers
14. Joseph Richardson, Jr. (AAA Auto Club Group) - 2,895 followers
15. Christopher Swift (The Hartford) - 2,147 followers
16. Raul Vargas (Farmers Insurance) - 2,042 followers
17. Joseph Lacher (Kemper) - 1,686 followers
18. Tom Wilson (Allstate) - 545 followers
19. Alan Schnitzer (Travelers Insurance) - 329 followers
20. Michael Tipsord (State Farm) - NA
21. Evan Greenberg (Chubb) - NA
22. Todd Combs (Geico) - NA
23. John Boyle (Automobile Club of Southern California) - NA
24. Jamie Whisnant (Auto-Owners) - NA
25. John Roche (The Hanover) - NA

Source: P&C Specialist

[The Insurance Letter @InsuranceLetter]

🚨Nationwide Drops 10,525 Home Policies in North Carolina

Nationwide is not renewing over 10,500 homeowners' policies in North Carolina, with 1,000 of them in the coastal Outer Banks area.

This move is part of a strategy to reduce exposure to hurricane and wind risks.

The North Carolina insurance department cites a "hurricane hazard assessment tool" for non-renewals and refers 4,744 policies to the Beach Plan, the insurer of last resort.

Nationwide aims to refine underwriting guidelines and minimize weather-related risks.

This represents about 4.4% of Nationwide's North Carolina homeowner policies, impacting long-term policyholders.

Source: P&C Specialist #NationwideInsurance #Homeowners #HurricaneRisk

[The Insurance Letter @InsuranceLetter]

Multiple things they could do, IMO

Reevaluate Pricing: Carefully assess premium rates to match risk and market conditions. Striking a balance between price increases and competitiveness will be challenging as some companies may be underpricing insurance for EVs.

Advanced Data Utilization: better leverage onboard vehicle data for more accurate underwriting. FSD could have a huge impact here if it goes according to plan.

Cost-Efficient Repairs: seek partnerships for cost-effective EV repairs and maintenance. EV repairs are still too high.

Diversify Offerings: expand insurance products to a broader customer base. Large losses hit small books differently.

Strategic Alliances: form partnerships with established insurers for risk-sharing and market access.

[The Insurance Letter @InsuranceLetter]

Tesla's Insurance Woes: A Staggering 408% Loss

In a daring move, #Tesla entered the insurance market, but the results are shocking: a colossal 408% loss ratio in Q1, far above the industry average of 66%.

Despite their treasure trove of vehicle data, they're struggling.

Electric vehicle damage poses challenges due to higher repair costs, with the average repair cost being 26.6% higher.

Tesla's insurance has a 17% adoption rate in 16 states, generating $300 million in premiums.

Notably, #insurance partners State Auto Financial, part of Liberty Mutual, and Red County Mutual underwrite Tesla's risks.

Don't count Elon out, but Tesla Insurance is currently navigating a winding path toward profitability.

Source: Bloomberg Financial

[The Insurance Letter @InsuranceLetter]

🚨BREAKING: Louisiana's Insurance Costs Surge! 🚨

🏠 Louisiana now ranks 3rd highest in homeowners #insurance, averaging $5,353 annually – three times the national average!

🚗 Car insurance rates follow suit, labeled the least affordable in the nation by Insurance Research Council.

Residents are leaving #Louisiana in pursuit of affordability.

Climate-driven events maintain relentless pressure on insurance rates.

Source: Business Insider 📰

[The Insurance Letter @InsuranceLetter]

🚨 State Farm's A++ Rating Outlook Turns Negative 🚨

AM Best has shifted the outlook for State Farm Mutual and affiliates to negative.

Why? Recent underwriting struggles in auto insurance, regulatory constraints, and ongoing catastrophe-related losses.

Important to note: AM Best believes in State Farm's rebound, despite 2022 and early 2023 losses.

Source: AM Best

#InsuranceInsights #insuranceagents

[The Insurance Letter @InsuranceLetter]

🚨 BREAKING: Allstate’s August Catastrophe Losses Soar to $551 Million!

Half of the devastation linked to the #Maui Wildfire in Hawaii, where #Allstate holds 8% of the homeowners market.

Source: S&P Global

[The Insurance Letter @InsuranceLetter]

🧐Behind the Numbers: U.S. Property/Casualty Insurance's H1 2023 Analysis:

🔻Net underwriting loss for H1 2023: $24.5B, $2B lower than 2022.

🚨Catastrophe losses contributed 9.6 points to a combined ratio of 104.5.

🏠Personal lines, especially homeowners, drove the underwriting decline.

🔺Rising loss costs, high catastrophe activity, and auto trends are challenges.

↗️Despite challenges, industry surplus increased by 6.7% to $1.05 trillion.

💸Overall premiums for industry grew 9.7% in first half of '23.

👁️Keep a close watch on personal lines, especially home insurance. 🏡

Source: Insurance Journal

[The Insurance Letter @InsuranceLetter]

🚨BREAKING: Farmers Insurance is facing a tough situation.

Over the past year, their financial strength, called the policyholder surplus, has been steadily decreasing.

Their surplus dropped 9% in Q4 '22, 11% in Q1 '23, and a whopping 14% in Q2 '23!

Their mid-year policyholder surplus was $5.4 billion, the lowest among all insurers in the personal lines Top 10.

Farmers is going through a significant restructuring that includes laying off employees and reducing agent compensation.

Other carriers that saw their policyholder surplus decrease each quarter over the last 12 months were The Hanover, Travelers, & Nationwide.

Source: P&C Specialist

[The Insurance Letter @InsuranceLetter]

State Farm, Progressive, USAA, and American Family Lead Top 10 Insurers in Q2 YOY Premium Gains, Liberty Mutual Loses Premium, per S&P Capital IQ

State Farm: 23.7%
Progressive: 22.8%
USAA: 21.2%
American Family: 19.2%
Travelers: 12.1%
Allstate: 10.6%
Farmers: 4.3%
Geico: 0.5%
Nationwide: 0.3%
-------------
Liberty Mutual: -5.9%

State Farm, Progressive, USAA, and American Family Insurance led the top 10 personal auto insurers in year-over-year premium gains in the second quarter of 2023.

Liberty Mutual was the only top 10 insurer to report a decrease in premiums, with a 5.9% decline. Liberty Mutual attributed the decrease to its focus on profitability and its reduction of its State Auto businesses.