Work Comp Underwriting Profit Might Not Repeat, The ‘Hidden’ Value of Actuaries, Higher Cat Losses Drive Disappointing Q1 P&C Results, Florida Agents Attracting Millennials to Insurance Careers, Keeping Human Touch as AI Takes Hold, InsurTech Boom Reshaping Market, Low Interest Rates Drag Down Income in P/C, & More
Carrier Management: ‘Significant’ Workers Comp Underwriting Profit Might Not Repeat: Fitch
The U.S. workers compensation insurance market achieved a “significant” underwriting profit in 2015, but trends call into question whether such a result can be repeated, Fitch Ratings concluded in a new report.
For 2015, the workers compensation combined ratio came in at 95.4. That is a remarkable improvement compared to 2011 through 2014, when the sector’s combined ratio was 117.3, 110.3, 103.1 and 102.4, respectively, according to SNL Financial data cited in the Fitch report.
“Calendar-year 2015 represents the culmination of a complete turnaround for the workers compensation line,” the Fitch report stated, crediting the good results to factors “including strong premium revenue growth from better pricing and economic factors, favorable loss cost trends, and favorable loss reserve experience tied to more conservative reserving practices.” Read the full article now…
PropertyCasualty360: The ‘Hidden’ Value of Actuaries in Effective Risk Management
As companies seek to drive profitable growth, both short term and long term, increasing the demands on the actuarial department, actuaries must re-evaluate the current actuarial operating model relating to people, process, data and technology to address current needs and be prepared for future needs of the business.
This is the first part of three written by EY that explores the elements of a successful actuarial transformation.
The business and competitive environment for insurers is challenging. For companies to succeed now and in the future — to find profitable growth while managing risk and capital — they need integrated, high-performing actuarial functions. Insurers continue to face challenges and should be prepared for the changing face of insurance, new products and exposures, increased data and big data, technology advances, ongoing regulatory change, scrutiny around documentation and controls and greater competition. Read the full article now…
PropertyCasualty360: Higher Catastrophe Losses Drive Disappointing Q1 U.S. P&C Results
The U.S. property and casualty industry’s 2016 first-quarter net income fell 24%, to $13.7 billion, as underwriting results — as well as net investment income and realized gains — deteriorated compared to the first quarter of 2015, according to insurance industry rating agency A.M. Best’s latest “Special Report.”
Despite the negative results, the industry maintained a combined ratio under 100 in the quarter, and the observed deterioration may be more a result of weather events in the quarter than a sign of where the industry is heading going forward.
It is worth noting that underwriting results fell because of the highest level of first-quarter catastrophe losses since 2011. “Among key events driving losses in the quarter were a series of severe storms that impacted nearly all sections of the country in March, a significant winter storm in mid-February that was followed later in the month by systems that brought both winter and spring storm conditions across the central and eastern sections of the country, and flooding and severe weather in California in January,” says A.M. Best. Read the full article now…
Insurance Journal: Florida Agents Putting New Law to Work to Attract Millennials to Insurance Careers
Florida insurance agents are trying to bolster the industry’s track record in attracting college graduates by employing a new state law that aligns college courses with the state’s licensing requirements.
The insurance workforce development law, passed in 2015, gives the insurance industry an opportunity to catch up with what other industries have been doing for years in training of new employees, according to Jeff Grady, CEO of the Florida Association of Insurance Agents (FAIA). The association helped design the law and is now working on an education campaign to take advantage of the opportunity and draw attention to insurance and risk management careers.
“We are trying to help our industry with a really huge and universally-acknowledged problem of workforce shortage,” says Grady. Read the full article now…
PropertyCasualty360: Keeping the Human Touch as AI Takes Hold in Insurance
In this age of increasing regulation, automation and profit pressures, insurance carriers can’t lose sight of what makes the industry tick: helping people.
It sounds trite, but when you ask agents what they like best about their job, it’s working with customers to solve their problems. Agents don’t want to be collection agents, sales people or IT administrators. They want to be educators, guides and advocates for their customers.
But the push for speed, convenience and cost savings promised by automated technologies, artificial intelligence and robo-advisors threaten the concept of agent as friend and advisor.
The question is, should we care? Do people even want a human touch in insurance? And, can carriers afford to continue to invest in human interaction when advanced technology and automation is becoming so accessible? Read the full article now…
Insurance Thought Leadership: InsurTech Boom Is Reshaping Market
Investment in insurance technology, InsurTech, is climbing fast. It’s going to have a big impact on insurance providers around the world. What is your strategy to stay abreast of the new opportunities and threats posed by InsurTech?
Global investment in financial technology, FinTech, continues to soar, and insurance is emerging as its next big target market.
Investors around the world poured $22.3 billion into FinTech deals last year – a 75% leap from 2014. InsurTech attracted around $2.6 billion of this outlay. This is still a small slice of total FinTech spending, but it’s a big step up from the previous year’s $800 million. And spending on InsurTech looks set to surge. Read the full article now…
Insurance Business America: Low Interest Rates Drag Down Income in Property/Casualty Industry
Persistent low interest rates are dampening income growth in the property/casualty industry, the latest report from the National Council on Compensation Insurance (NCCI) suggests.
NCCI said that the Federal Open Market Committee has left rates stagnant at 0.25% to 0.50% even after four meetings this year, since December 2015. Prior to last year, the rate has remained unchanged since 2008 at 0% to .25%.
Treasury notes are expected to fare better. Quoting investment ratings firm Moody’s, NCCI said yields from 10-year treasury notes are seen to climb to 3.6% in 2017. Read the full article now…
PropertyCasualty360: 4 Keys to Thriving in an Uncertain Future
If the insurance industry exists to manage future uncertainty, why are today’s dominant carriers sweating their own uncertain future?
One big reason is the pace of change that is centered on two major trends:
1. New technology is opening the door to new players and new models, forcing established companies to rethink their offerings.
2. Digitally empowered and connected consumers demand personalized experiences, which impacts how they buy insurance products and interact with carriers.
Will these trends end the era of the traditional insurance carrier? It isn’t likely, but existing players must evolve or they will lose significant market share. So let’s take a look at a few of the strategies available for organizations that are ready to take action: Read the full article now…
Insurance Business America: Survey Reveals Employees Do Not Feel Safe in their Workplace
Recently released survey results from the National Safety Council (NSC) showed that 33% of the 2,000 respondents across the US believe that their employers prioritise productivity over safety.
NSC data further revealed that the percentage was higher among workers in high risk industries. An estimated 60% in the construction industry and 52% in the agriculture, forestry, fishing and hunting sector perceived safety to take a back seat to accomplishing work goals. The said industries registered first and second when it comes to the number of occupational deaths each year.
Further findings stated that 62% of construction workers believe management does the bare minimum to promote safety at work. In addition, 61% of those surveyed in the agriculture, forestry, fishing, and hunting sector noted resistance to safe work measures among employees. Read the full article now…