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Latest insurance industry news, with commentary.
NEWS OF THE DAY January 3, 2014

QUOTE OF THE DAY:

"Life isn’t about finding yourself. Life is about creating yourself."
George Bernard Shaw

GOOD NEWS!

NINE-MONTH RESULTS SHOW INDUSTRY SET FOR BEST POST-CRISIS YEAR


by Arthur D, Postal

PropertyCasualty360.com

December 19, 2013

Driven by lower catastrophe losses and higher premiums, profitability in the private U.S. Property and Casualty insurers' market rose sharply in the third quarter.
The results led Robert Hartwig, president of the Insurance Information Institute, to say that they put the industry on a “firm trajectory” for what will “assuredly be its best year in the post-crisis era.”
According to data released by ISO and the Property Casualty Insurers Association of America (PCI), net income after taxes rose to $43 billion in nine-months 2013, from $27.8 billion in the same period of 2012.
ISO and PCI say P&C insurers’ overall profitability as measured by their annualized rate of return on average policyholders’ surplus increased to 9.5% from 6.5%
.
Hartwig adds that there now is “no question” that 2013 fourth-quarter performance for the Property and Casualty insurance industry “will be far superior” to 2012.
He explained that will happen because last year’s fourth quarter includes the impacts of Hurricane Sandy, which resulted in $18.8 billion in insured catastrophe losses. “No event in the fourth quarter of 2013 comes remotely close,” Hartwig says.
In addition, he says P&C insurers will benefit from a strong performance in financial markets during the final quarter of the year.
ISO and PCI say nine-month results for 2013 benefited from a $2.1 billion increase in net investment gains—the sum of net investment income and realized capital gains (or losses) on investments—to $40.4 billion compared to $38.3 billion in nine-months 2012.
Michael R. Murray, ISO Assistant Vice President for Financial Analysis, says his analysis indicates that a number of factors were involved in the improved results. Besides “relatively benign weather,” special developments that helped improve the results included developments in the mortgage and financial guaranty insurance segments.
Murray and Hartwig say improvements in these sectors added to increases in overall reserves in the industry. Hartwig says these sectors had been “hit hard during the financial crisis but have now largely recovered.”
The improvement in underwriting and investment results was partially offset by a drop in miscellaneous other income and higher taxes, Murray says.
Insurers’ pretax operating income—the sum of net gains or losses on underwriting, net investment income, and miscellaneous other income—grew to $45.7 billion in nine-months 2013 from $31.4 billion in nine-months 2012.
The increases in insurers’ pretax operating income, net income after taxes, and overall rate of return were driven by a $16.7 billion swing to $10.5 billion in net gains on underwriting in nine-months 2013 from $6.2 billion in net losses on underwriting in nine-months 2012.
The combined ratio improved to 95.8 for nine-months 2013 from 100.7 for nine-months 2012, Murray says. [EXCELLENT!]
Hartwig says persistently low interest rates “remain a challenge for the industry,” but he notes overall industry capacity rose to a record $624.4 billion as of September 30, 2013—up $45.1 billion, or 7.8%, from $579.3 billion as of year-end 2012.

SHOULD BE MODEL AND TARGET FOR OTHER AUTO INSURERS

GEICO WINS MOBILE AUTO INSURANCE HONOR

Live Insurance News

12/13/13

By Helen Cutner

An independent research firm has said that the insurer’s smartphone functionality tops the ranks.
According to Forrester Research, when it comes to mobile Auto insurance functionality, GEICO is leading the way in the industry and is providing the best overall customer experience.
Considering the importance of smartphones and cell phones in our lives, this is an important statement.
The November 2013 report has been released by Forrester to include their 2013 U.S. Mobile Insurance Functionality Rankings. They determined that when it came to the performance of mobile Auto insurance elements offered by some of the top insurers, GEICO stood out in a series of different smartphone and tablet friendly categories. In fact, in the area of quotes over small screens, as well as policy management and information, the insurer received perfect scores.
The insurer also received top scores for the mobile Auto insurance support for many device models.
The features offered to these device users were also a top scorer for GEICO. According to Senior Vice President, Greg Kalinsky, who is also the Chief Information Officer, “Our customers have high expectations and we believe this top honor reflects that GEICO is focused on providing the absolute best mobile experience for our policyholders.”
The report was Forrester Research’s measurement of the effectiveness of the offerings made by the leading U.S. private passenger Auto insurers for meeting the needs of their customers who use smartphones and tablets. The study took 26 criteria into account
Among all the companies in the report, GEICO was the only one to exceed the minimum mobiles. The fact that it achieved perfect scores in such important areas as policy information and policy management brought it to the point that Forrester referred to it as “the pocket Auto insurer.” The next few years should be defining in terms of the competition in this channel.

SMART MOVE!

ESURANCE TRACKS TEEN DRIVERS, SHUTS PHONES IN SAFETY PITCH

INN Breaking News

December 19, 2013

Esurance, the Auto insurer owned by Allstate Corp., is appealing to parents with technology that can disable their children’s mobile phones when they are behind the wheel and provide warnings when they drive too fast.

DriveSafe, available for free to Esurance policyholders who list teens on their plan, consists of a device installed in the car and a smartphone application, according to a statement from the company. Esurance, owned by Allstate Corp., focuses on sales through the Internet, rather than by agents.

Auto insurance companies have turned to technology to encourage safer driving and, in some cases, help set rates. Progressive Corp.’s Snapshot collects data used to give discounts to the safest customers. Esurance, which also offers a usage-based discount program, won’t use data collected by the teen-safety program to set rates, said Danny Miller, a spokesman for the company.
DriveSafe “can help stop teens from texting while driving and make parents and their teens aware of, and hopefully reduce, risky driving behavior,” Esurance Chief Executive Officer Gary Tolman said in the statement.
Phones would still be able to call 911 to report emergencies. Trip summaries are typically available to parents by computer within five minutes of the end of a trip, Miller said.

Privacy Concerns

Some drivers have shunned technology tracking behavior amid privacy concerns, Progressive CEO Glenn Renwick said in a conference. He said about 40% of prospective Snapshot customers said “no way in hell” would they agree to the device. The remaining 60% were divided among people immediately receptive to the technology and those who wanted to know more.
Allstate, the largest publicly traded U.S. Home and Auto insurer, had been losing customers for its namesake brand of Auto policies when CEO Thomas Wilson bought Esurance in 2011. Miller declined to comment on how many Esurance policies list teens or how much the company invested in the DriveSafe program.

New York Governor Andrew Cuomo announced the approval of the program by his state’s Department of Financial Services.
“A combination of inattention and inexperience has far too often produced tragic results for teenage drivers,” said  Cuomo.

 

Jack Nordhaus
Other articles by: Jack Nordhaus
Categories: General Information, Technology
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