In this newly released State of Technology Survey report, carriers and MGAs express challenges to keep pace with technology and customer demands.

Insights include:

•    the greatest challenges facing insurers in the marketplace
•    critical strategies to meet customer demands
•    technical roadblocks to innovation
•    where insurers will prioritize technical investment
•    the types of tools most likely to be employed

For insurance professionals interested in the state of technology within the P/C insurance sector, this report offers insights into insurer priorities, challenges, and solution strategies for 2022-2023.
 

Sponsored by ITL Partner: OneShield

With cybersecurity insurance, as with cybersecurity, ignorance is not bliss. All parties in the contract, insurer and insured, need as much information as possible to make wise choices about coverage, pricing and payouts and to prevent unpleasant surprises. Unfortunately, they too often have more questions than answers.

Insurers frequently issue cybersecurity insurance policies based on estimates or even guesses rather than material data. They often lack the visibility or metrics that expose the policyholder’s vulnerabilities and risks or the controls the client is using to minimize the chances of a breach. 

As a result, these companies may charge the policyholder too much – or not enough, which could result in an increase later on. And without data and documentation showing evidence of properly applied and enforced cybersecurity controls and monitoring, the policyholder may find itself in a tight spot when filing a claim. 

If the policyholder can’t attest to the level of damage a breach has caused and measure its potential liability – whether personally identifying information was compromised, for instance – the policyholder may find itself waiting for the payout while the insurer investigates and determines what it is liable for. And then, depending on the results, the business may get less compensation than expected. 

The dispute that could result won’t be pleasant for anyone, and the claimant may suffer a premium increase that it can ill afford.

The insurance data deficit

None of these problems is necessary. Data is readily available regarding any organization’s cybersecurity posture and maturity, its areas of exposure and vulnerabilities, its cyber risks and the controls needed to mitigate them and more.

But companies may not know where to look for this information, and insurers often can’t advise them on how to find and use it. 

Having worked in the insurance industry and now in cyber threat intelligence, I’ve discovered four key actions that cyber insurance policyholders can take to correct this data deficit. In the process, companies can get the most value from their coverage for the least cost. Insurers could save resources, as well, as they issue policies with confidence in their customers’ ability to mitigate risks.

The cyber insurance dynamic duo: data and controls

Intelligent risk management, which is the essence of effective cybersecurity, involves two main components:

• Data that demonstrates an organization’s areas of digital exposure – where hackers might try to get in – as well as the odds that each of these vulnerabilities will be attacked and the consequences if a breach occurs
• Controls the entity puts in place to shore up its vulnerabilities, and evidence that it continually monitors and strengthens them as its threat surface changes.

By paying close attention to these two components, your organization can rest assured that it’s protected against cyber attacks and positioned to confidently transfer some of its cybersecurity risk to an insurer.

For the insurer’s part, it’s helpful to know that its policyholders know their risks and are reasonably secure and able to remain that way. Having this confidence can help insurers stabilize premium prices and better serve customers while protecting their own bottom lines. 

See also: Is Cyber Insurance on Brink of Collapse?

4 must-haves for a great cyber insurance outcome

To correct the cyber insurance data deficit, policyholders need diligence and documentation in these four areas:

1. Compliance with a cybersecurity framework. Organizations have a veritable alphabet soup from which to choose: CIS CSC, CBEST, FFIEC, ISO, etc. Which framework is best for you depends partly on the requirements of the industry you’re in. Many prefer the framework from NIST, the National Institute of Standards and Technology.

Often used for the protection of U.S. critical infrastructure, the NIST Cybersecurity Framework (NIST CSF) can be a helpful framework for any organization. Using the NIST CSF to measure security control compliance is voluntary, unless yours is a federal government agency or doing business with the federal government. On the other hand, not to be NIST-compliant could be risky business, indeed. 

NIST has already done the hardest part for you: provided a common set of rules and controls that can guide your enterprise to greater security. The NIST CSF is written in clear, concise language and is designed so that even those just beginning to use a framework to guide their cybersecurity program may find it helpful.

And because critical infrastructure is a national security concern, NIST compliance can assure policyholders and insurers that controls are in place to guard against the latest threats. What’s more, the insurer can more readily qualify the business for the proper level of insurance, saving time and, perhaps, money for both.

2. A thorough risk assessment. An increasing number of organizations have come to understand the risk-cybersecurity connection in recent years. Yet many fall short of conducting a full-scale cybersecurity risk assessment – one that weighs risks not only in their own organizations but up and down their supply chains.

With increasing threats and attacks directed at the digital domains of poorly protected and aging critical infrastructure, the U.S. federal government has seen the light regarding this need to supply proof of risk reduction. 

The White House’s February 2021 executive order makes a good start in encouraging better risk measures as it directs all public companies to assess their supply chain risks, including the digital supply chain. 

Software supply chain vulnerabilities have made headlines in recent years. In the so-called Solarwinds breach, cybercriminals planted malware in a security software update. The log4j vulnerability made its way into Apache’s software via library-sourced code. Both affected many thousands of businesses. 

From these incidents and others we’ve come to realize how paying close attention to third-party risks is critical to securing an organization’s systems, networks and data.

More recently, the White House in May 2021 issued an “Executive Order on Improving the Nation’s Cybersecurity” that requires providers of software to federal agencies to assess their supply chain vulnerabilities and risks.

These long-overdue mandates stand to affect not only federal contractors but all enterprises. And, although companies may cast a wary eye on the amount of work required, they will certainly benefit from having a more secure supply chain – and from having a better relationship with their cyber insurance company.

3. Quantification of cyber risks. “Risk” can be a nebulous term that means something different to each entity. Enterprise risk assessments tend to prioritize risks with the non-specific “high,” “medium” and “low,” referring to the likelihood of each risk’s culminating in an attack and the severity of the consequences should an attack occur.

But what are the specifics? Where, precisely, does the insured have a presence online – its “digital footprint”? 

How widespread are its vulnerabilities? Where are these weak spots located? How likely are attackers to find and exploit each of them? 

How resilient is the insured – how able to carry on business as usual – in the event of an attack? How much would an attack cost the enterprise? How would it pay these costs?

These questions might seem daunting because there are no easy answers. Yet insurers ponder them all the time for other forms of insurance. 

When writing an auto insurance policy, an agent will consider the make and model of the car, for instance: an expensive sports car is more susceptible to theft than an older utility vehicle and so might command a higher premium. If the owner lives or works in a big city, the likelihood of an accident goes up, and so might premiums. And so on.

Cyber risk quantification is still a nascent field and may seem intimidating. But a quality threat intelligence solution can help: It can not only uncover an enterprise’s vulnerabilities overall but also help entities prioritize which gaps to address. 

By alerting policyholders to any online chatter, threat intelligence can help them determine which business sectors are more at risk and which are less so (and where their organization stands) and whether cybercriminals are targeting a particular business or software, including their own..

If your business is a retailer and the day after the U.S.’s Thanksgiving is approaching – Black Friday, the biggest shopping day of the year – you’ll want to double down on your monitoring of dark web forums and any chatter that may refer to your business. 

Any area of your business or its suppliers could be a target – point-of-sale systems, for instance. If your threat intelligence finds that 100 dark-web forums have posts about plans to target these systems, you’ll want to tighten your security to ensure attackers can’t use them to get into your business systems or steal data from your customers. 

And believe it or not, telling your cyber insurer about threats and showing how you’ve dealt with them can actually reassure them. They’re more likely to feel confident about covering your organization if they know you’re vigilant against potential attacks and can prove it.

4. A good and measurable security awareness policy. How effective is your security awareness program? 

Do you know whether employees, business partners, third-party suppliers and others who are a part of your organization fully understand the need for security, as well as what your security policies and guidelines are, and how to follow them?

Again, policy effectiveness can be tricky to measure – but the proof is in the pudding. Keeping track of cyber events and incidents and how they are handled can tell you how well you’re getting your messages through to your people – who are at once the front line and the greatest vulnerability to any company.

See also: An Often-Overlooked Business Interruption Risk

How to gather the information you need

For cyber insurers, there’s no such thing as too much information. 

Yet you can find yourselves hamstrung when trying to set fair policies and premiums, forced to make guesses that aren’t well-educated. 

Your best bet may be to include my four "must-haves" in policy requirements for cyber insurance applicants, or plan to do the due diligence yourself for each company you insure. As I’ve noted, this model already exists with other types of insurance. Home insurance policies and premiums depend on a number of quantifiable factors, including, perhaps, the age of the home, the materials of which it’s made and where it’s located. Auto insurance, as we’ve seen, can vary in price depending on the type of vehicle, where and how the driver will use it and the driver’s own driving history.

Threat intelligence (TI) is one very effective tool for gathering the data you need to make informed cyber insurance decisions. Today’s best TI software scans three areas of the internet:

• The public internet, to find where companies are vulnerable to attack
• The deep web, which comprises email accounts, private messaging and other non-public digital arenas
• The dark web, the shadowy underbelly of the internet where cybercriminals often discuss targets and tactics as well as sell illicit goods and hacking software.

Each of these areas adds a dimension to your threat picture, for a view that’s truly three-dimensional. This type of threat intelligence lets you see whether your business or that of your client is a cybercrime target. It can show where vulnerabilities and security gaps might be, as well as how much risk they carry, so your company or client can strengthen them. It can reveal which types of data your company or client lost in a breach for more accurate assessment of the damage and how to respond.

Having this 3-D view helps companies fulfill each of the four must-haves in my list. 

• Auditors will be able to use the data to determine your compliance with security frameworks. 
• Risk staff can incorporate the data for more thorough and accurate risk assessments of the enterprise and its supply chain. 
• The information can also help quantify the risks the policyholder faces for more accurate cyber coverage and premium prices. 
• And being able to see where attackers are trying to enter and how, and whether they’re successful, can provide insight into the effectiveness of your security awareness policies and program.

Giving diligence its due

Insurers doing due diligence on cybersecurity policy applicants and holders need to make intelligence gathering a priority. The same is true for enterprises.

In the end, the results should be a more cyber-secure world and a stronger cyber-insurance industry. Getting there will take not only a lot of work but also mindset shifts on everyone’s part. The results will be worth it, however: bolstered confidence throughout the industry. Isn’t that the best insurance of all?

The commercial underwriting game has changed. Data analytics, artificial intelligence and machine learning provide access to more information from a variety of sources, including social media and publicly available databases. But while many technology solutions have been quick to provide answers to underwriters, they’ve been less focused on offering information about how and what data is used to provide conclusions. “The answers are in the algorithm” has been a common explanation about the ways the information is applied, sourced and weighted to answer insurance questions. 

But what happens when you open that black box and combine analytics with underwriter expertise to evaluate the computer’s conclusions and where the information comes from? The answer: You get more accurate, efficient underwriting, better customer service and more business. 

What does transparency look like?

Transparency doesn’t mean sharing the secret sauce or giving everyone access to intellectual property. It does mean pulling back the curtain so those using the solution can easily see where the information is coming from and make decisions with that information in mind. 

Imagine this scenario. A restaurant is looking for insurance. In the application, the restaurant said it does not do deliveries. To speed up the process, the underwriter working on the file uses an AI-enabled solution to comb the internet for information and automatically pull in answers for the underwriting questions. The solution says the restaurant does, in fact, do deliveries. Because the underwriter is strapped for time, they aren’t able to do the manual work to figure out why there is a discrepancy. The underwriter accepts what the solution provided and denies the coverage because that carrier does not insure delivery restaurants. This leads to a long back and forth with the agent and customer to figure out why the coverage was denied, as the customer is adamant that it does not deliver. Not only would the carrier lose a potential client, but it also diminishes the carrier’s relationship with the agent. 

Now consider the same scenario. The only difference is that the underwriter is using a technology solution that’s transparent. The agent can see that there is a discrepancy between what the agent submitted and how the solution answered the question. The underwriter can go directly to the sources where the delivery information was pulled to see that delivery is via a third party, such as Uber Eats. Because the restaurant doesn’t do deliveries itself, its insurance category doesn’t change, and the carrier can write the risk. The underwriter is able to approve the policy without time-consuming work and a long delay between the agent and the customer. 

See also: Eliminating AI Bias in Insurance

Machines don’t replace humans

The value of human expertise is fundamental to the success of the sector. So why are some solutions bypassing professionals’ insurance acumen? Commercial insurance is complicated. There is no one-size-fits-all approach as businesses each have their own particular sets of risks. While AI and data analytics platforms drive underwriter efficiency, it is equally important to provide all of the information they need to easily identify and resolve unique circumstances and make sure customers get the right coverage. 

Advocating for transparency in analytics

Carriers should advocate for transparency. It can save their underwriters significant time and help fuel  business. Here are three reasons why data transparency is critical to insurance buying: 

It builds customer trust. “That is what our underwriting program determined,” is not going to suffice if a customer is wondering why they were denied coverage or their premium ended up being significantly higher than what was quoted. Customers understand businesses use algorithms to speed processes, but they also know the algorithms can be inaccurate. Being able to tell customers exactly where the information comes from and how it is used can help underwriters give clients clear answers to their questions. 

The human-computer combination enables faster interactions. Carriers get the best of both worlds: computer speed coupled with underwriter expertise. Underwriters can make decisions faster. If there is a discrepancy, they can easily resolve it by checking the sources for themselves, eliminating the need for manual search. Finally, underwriters have confidence that the information they are using is accurate. In a non-transparent platform, if an underwriter determines the solution answered a question incorrectly, it could lead them to wonder what else the solution might have gotten wrong. 

It keeps you ahead of the data compliance curve: Consider California’s Consumer Privacy Act or Connecticut’s Personal Data Privacy and Online Monitoring. More and more states are enacting data privacy legislation, while the federal government is also working on passing legislation on its own. Data privacy issues and unintended bias in data analysis are growing concerns in the sector. Are solutions using personal information about a company’s leaders or employees that could infringe on their privacy rights? Are algorithms delivering different results for different demographics of people? Carriers that can show exactly what information was used to underwrite a business can easily appease any regulatory concerns. If there is an issue raised about the fairness of price, for example, the carrier can easily pinpoint the text used to determine the premium and show a regulator that there was no bias or overreaching into employee personal information. 

Data analytics and AI are increasingly becoming table stakes in insurance underwriting. Now the conversation needs to move to transparency. Easily accessing the data sources that solutions use to determine their answers puts the final decision-making into the hands of insurance professionals – where it belongs. Combining technology efficiently with human expertise enables a more efficient and accurate underwriting process to better serve customers and ultimately grow business. 

For wineries, getting ready for winter takes far more than buying a few snow shovels and loading up on rock salt.

Wineries are among the most complex businesses imaginable. They’re one part farm, one part manufacturer, one part entertainment complex and one part hospitality provider/retailer. That means they face multiple risks year-round, and those risk exposures compound each winter.

While agents and brokers should talk with their winery clients about proper winterization every year, the conversation heading into the winter of 2022-23 takes on added importance. Supply chain shortages, inflationary pressures and fluctuating business results mean some winery owners are looking to cut costs wherever possible. 

Skimping on winterizing is a terrible idea. The few dollars winery owners will save by not properly winterizing often pales in comparison to the huge losses they could face if they experience major property damage or slip-and-fall claims due to improper winterization.

Let’s review the top six risks wineries face each winter.

1. Winemaking equipment

Wineries in milder climates often store harvesting equipment such as destemmers, presses and bottling lines outside. Come wintertime, it’s not enough just to leave this equipment outside. Instead, wineries should make sure their machinery is carefully wrapped or stored under a tarp to avoid damage from debris and safely stored out of the way of foot traffic.

Also, wineries that use outdoor glycol chillers must winterize them properly. Glycol lowers the freezing point of water. The colder it gets outside, the more glycol you should add to your chiller to protect your system. You can use this chart to educate winery owners on the proper glycol/water mix based on the expected winter temperatures in their region.

2. Roofs and rooftop HVAC units

Proper winterizing means scheduling and completing proper annual maintenance on shingles and flat roofs to ensure they’re ready to withstand a potential winter pounding. It’s equally important to get any above-ground HVAC units inspected so you can detect problems before they’re covered in snow. As a best practice, recommend that winery owners establish maintenance agreements with third-party roofing and HVAC contractors.

See also: 4 Technology Trends for 2022-2023

3. Solar panels

For wineries that have rooftop solar panels, pre-winter inspections can happen simultaneously with roof shingle and HVAC maintenance checks. However, if a winery has a ground-mounted solar panel grid, it’s important to get it expected and make sure it hasn’t suffered any wind damage in the prior 12 months. This is especially true for wineries on the Pacific Coast, where wintertime comes right after the peak of wildfire season (September to November).

4. Outdoor spaces

This wintertime risk falls into two specific categories. First, wineries must be concerned about temporary outdoor entertainment spaces. Each year, insurers see costly claims related to the collapse of pop-up and seasonal tents. Many of these structures carry a high price tag ($25,000 to $30,000). Some include intricate lighting or misting systems. To protect their investment, wineries should take down these temporary structures well before the first frost.

Wineries also must winterize their permanent outdoor spaces, including seating areas, walkways and parking lots. In these areas, winery owners should pay particular attention to outdoor lighting. Just one burnt-out lightbulb on a sidewalk that leads to a taproom can create a costly trip-and-fall accident.

5. Water damage

Water damage can bring multiple wintertime risks for wineries, too. One of the best ways to mitigate this risk is to clean out your gutters annually. This is especially true in areas of the East Coast where leaves from deciduous trees collect in gutters every autumn. If they’re not cleaned out, it raises the risk for ice dams, which can bring your gutters crashing down and cause major property damage.

Another related problem occurs in cold regions when moisture builds up on the sidewalk at the entrance to a taproom. This happens as patrons wipe the snow and ice off their boots prior to stepping inside. The water they shake off can freeze and refreeze to the cement or asphalt, elevating the risk for slips, trips and falls. A good risk management tip: Ask your winery clients to place a mat or rug at their taproom entrance.

6. Snow removal liability

Wineries located in areas prone to snowstorms should have documented snow- and ice-clearing practices on file. If your winery client hires a third-party contractor for ice and snow removal, recommend that the contractor sign a risk-transfer agreement that will indemnify the winery owner should one of the contractor’s employees inadvertently strike a vehicle, person or structure on the winery property. For an additional safeguard, winery owners should ask to be added as an additional insured on their contractor’s policy.

The location of the wineries you represent will play a role in which winterization steps they should take. Craft your risk management strategies to meet the specific winter weather patterns your clients face and encourage winery owners to make them an annual part of their maintenance routine.

On Oct. 22, 2012, a tropical wave off the Caribbean coast of Nicaragua strengthened into a depression. Two days later, it had intensified to a Category 1 hurricane and made landfall in Kingston, Jamaica, before moving on to strike Cuba as a Category 3, with wind speeds of 105mph. The tempest then blew through the Bahamas and weakened a little before regrouping to take its infamous "left turn" and slamming into New Jersey on Oct. 29. 

On its deadly path, it left 70% of Jamaican residents without power, caused catastrophic rain and mudslides in Haiti, inundated the streets of the Dominican Republic capital Santo Domingo and damaged the historic city of Santiago in Cuba. Most of the Eastern Seaboard of the U.S. was affected, with a storm surge in New York City that flooded the subway system and parts of Manhattan, Brooklyn and Staten Island. The New York Stock Exchange closed for two days during prolonged power outages that lasted for weeks in some areas of the region, and the eerily dark skyline of Manhattan became an enduring image of the catastrophe.

With a monumental diameter of around 900 miles, or 1,450km, at its greatest extent, Superstorm Sandy was the deadliest windstorm to occur in the north-eastern U.S. for 40 years and is the third-costliest hurricane in U.S. history (after Katrina in 2005 and Ida in 2021). It incurred around $30 billion of insured losses and over $60 billion in economic damages. But the human cost was even more devastating – more than 280 people died, including at least 54 direct deaths in Haiti and over 70 in the U.S. Many thousands were left without shelter.

What made Superstorm Sandy so extraordinary?

A number of factors converged to make Hurricane Sandy a "superstorm" – a term used for particularly intense storms that defy conventional classification – with some commentators going so far as to label it a "Franken-storm."

Superstorm Sandy had been widely expected by weather modelers to travel north-east out into the Atlantic, which is generally typical of hurricanes in the region, rather than hitting the U.S. Instead, an unusual weather pattern forced it to pivot left toward the coast, which maximized the winds and storm surge directed at the shores of Long Island, Connecticut and New Jersey.

Superstorm Sandy then hit the New York Metro area during high tide, which dramatically increased the height of the storm surge. On top of that, it was a full moon, which raises high tides along the Eastern Seaboard by about 20%. Finally, the storm was massive in geographical area, as well as slow-moving, meaning it could deliver more sustained damage over a large area.

Claims support and challenges

In the aftermath of the storm, Allianz handled around 900 customer claims, ranging from damaged cargo to flooded premises, and estimated the total impact at the time to be $590 million (€455 million). Economic losses in the city of New York alone were estimated to be $19 billion (€14 billion).

“Gaining access to loss sites to evaluate damages was a major challenge,” remembers Thomas Tesoriero, executive general adjuster at AGCS. “Traffic was limited by local authority restrictions along the coast, subway lines weren’t running because a lot of underground lines were damaged, and many buses had been flooded where they were stored during the storm. Power outages meant gas stations had problems pumping gas, which led to long lines and delayed truck deliveries, and with so many offices closed, communication with our customers and colleagues was difficult. Many companies suffered infrastructure and technology damage. Some found their backup sites were too close to the damage location.”

How things have changed. Today, drones could provide aerial shots of property damage from a safe distance, news media and ‘citizen journalists’ could quickly upload video footage from phones or security devices, and video conferencing or social media could gather key personnel in a group call or chat.

See also: How to Prepare for Catastrophe Claims

Hurricanes and climate change – what we know now

Analysis of more than 530,000 corporate insurance industry claims valued at €88.7 billion over the past five years by AGCS shows that natural catastrophes are the second top cause of losses globally for businesses overall, according to value of claims (15%), ranking behind only fire and explosion (21%). (Download the AGCS Global Claims Review.)

A deeper look at the major causes of natural catastrophe losses, based on analysis of more than 20,000 such claims around the world with an approximate value of €13.7 billion, shows that hurricanes/tornados rank at the top, accounting for 29% of the value of all claims. A major driver is the fact that two Atlantic hurricane seasons out of the previous five (2017 and 2021) are now among the top three most active and costliest seasons on record. Windstorm ranks second (19%), meaning storm activity accounts for close to 50% of the value of nat cat claims globally over the past five years. Flooding ranks third (14%).

Losses continue to rise with climate change, higher property and asset values, more complex supply chains and changes to exposures (such as increasing economic activity in natural catastrophe zones). Soaring inflation will only challenge claims costs further. Property and construction insurance claims, in particular, are exposed to higher inflation, as rebuilds and repairs are linked to the cost of materials and labor, while shortages and longer delivery times inflate business interruption values.

Hurricanes and climate change – what we know now

The meteorological conditions that boosted the power of Superstorm Sandy turbocharged the debate about climate change back in 2012. While it is still hard to prove the effect of climate change on the frequency of hurricanes, there is now broader consensus that global warming is increasing their intensity and therefore the damage they can cause. A modeling study from 2021 attributed some of the economic damages wrought by Superstorm Sandy to rising sea levels caused by human-induced climate change and even put a figure on it – $8.1 billion.

Karen Clark & Co. (KCC) has also linked climate change to increasing insurance damages from hurricanes. The risk modeler says its analysis shows losses are 11% higher today than they would have been if global temperatures had not increased. It notes that a 1°C increase in temperature likely results in a 2.5% increase in hurricane wind speeds, so the 1.1°C increase in global temperature since 1900 might have caused a 2.8% increase in wind speeds, leading to exponentially higher losses. Karen Clark wrote recently that “climate change and increasing property values in coastal areas will continue to accelerate the annual increases in hurricane risk and insured loss potential. Social inflation is also putting upward pressure on hurricane losses. The percentage of litigated claims is rising with each storm, and the cost of a litigated claim is multiples of a non-litigated claim.”

Thomas Varney, regional manager for Allianz Risk Consulting, North America, at AGCS, adds: “We are all vulnerable to climate-related risks, and climate change is starting to play a critical role in terms of risk management. The latest Allianz Risk Barometer survey shows how the lines are blurring between natural catastrophe, which was ranked third overall in the list of corporate risks, and climate change, which rose to its highest-ever position at sixth. The extreme impact of nat-cat events and their occurrence in locations or at times of year previously deemed safe is creating challenges for businesses and insurance carriers.

“As a result of climate change," Varney says, "we are seeing increases in three main areas – physical loss impact, supply chain impact and operational impact. These can play out as increased property damages from extreme weather events, business interruption caused by delays in supply chains or higher costs for heating, cooling or possibly relocating operations.

“Something is changing across the globe in terms of the types and severity of losses we are seeing. Until Hurricanes Fiona and Ian in September, the 2022 hurricane season had got off to a very quiet start, but we still expect to see another above-average season, with forecasters predicting up to 10 hurricanes in the Atlantic. Businesses have a responsibility to their customers, shareholders and stakeholders to mitigate this risk.”

Are businesses adequately prepared?

The north-east portion of the U.S. is susceptible to tropical storms and hurricanes, even if they occur infrequently. We know that sea level rise is increasing the severity of storm surge along the Atlantic and Gulf coasts of the U.S. With hurricanes, the primary sources of damage are from high winds and wind-driven water – storm surge – and between those two, it’s storm surge that generally causes more damage.

Enhancements can be made to buildings to withstand high winds relatively easily, but improvements made to increase a building’s resilience to storm surge can be more costly, time-consuming and complicated to implement. Looking ahead is key.

“Some of our clients have made changes that enable them to react quickly if their region is hit by a hurricane and flooding,” Varney says. “For example, one customer provides temporary on-site housing for essential staff members whose homes might be affected by flooding. Another large client has placed trailer-mounted generators in various locations which can be dispatched to provide power backup in the case of an electricity outage. We also have a client that entrenches training by having its 200 employees back their vehicles into parking spaces daily so that if evacuation is needed, it can be done in an orderly fashion and without delays.

“One of our manufacturing clients is using storm tracking capability to prepare for the aftermath of a hurricane. It overlays the storm path as it relates to their internal critical facilities and key suppliers. These approaches have minimized or eliminated impacts to production after the storm.”

Despite such measures being taken by some companies, most are still not fully prepared for the effects of these storms. If businesses have never been affected by one of these infrequent events, it can be easy for them to lose focus on maintaining a quality emergency preparedness plan. The question is not whether an extreme weather event will affect a business but when.

See also: 2022 Hurricane Season Update

Five steps to boost storm resilience

Give your business the best chance of withstanding and recovering from an extreme weather event by putting the following procedures in place:

1) Update and test your emergency preparedness plans: Preparation before the storm minimizes property damage and reduces business interruption. Ensure your business has a comprehensive written emergency response plan for extreme weather events, including high winds and flood. A good plan has the support of senior management, site-specific recommendations and clear delineation of responsibilities.

2) Test and update business continuity plans annually: The crucial role of business contingency plans has become more apparent as a result of recent natural catastrophes. Superstorm Sandy hit the Northeast on a Monday, which made it difficult for employees to develop and implement business contingency plans while preparing their homes and families for the storm. A well-developed contingency plan provides businesses with the tools to get back up and running as quickly as possible.

3) Understand your insurance policy: Business owners should take the time to read their current policy and discuss with their brokers what is covered and where there may be gaps. Determine if the limits of liability are in line with the current dollar value of the cost to repair or replace the damage. Consider adding an extended period of indemnity clause to the business interruption coverage to support the business until it returns to its pre-loss financial condition.

4) Know what to prepare for: Planning for a wind event involves different preparation than planning for flooding. In the case of Superstorm Sandy, the majority of preparation was based on a high-wind event, leaving many businesses unprepared for the flooding caused by the storm surge. As more sophisticated tracking models are introduced, more accurate information will be available.

5) Consider making improvements to the building and site: The following enhancements could help your business withstand the high winds and flooding that can accompany a windstorm.

a. Emergency generators for loss of power

b. Floodgates and flood doors

c. Raising critical equipment above highest anticipated flood levels

d. Protecting the building envelope from high winds (this refers to the physical boundaries between the interior and exterior of a building, such as the roof, windows and doors). This could include measures such as using impact-resistant doors and glass or better securing the roof covering system to the roof deck.

I'll be quick today, as I'm just back from a long weekend of catching up with my large family (eight of us siblings and my 92-year-old mother, plus spouses and kids and now even a few grandkids) at a niece's wedding three time zones away. But I did want to steer your attention to a McKinsey article that's worth some study on how leaders can steer their organizations through today's craziness (high inflation, war in Ukraine, political uncertainty and on and on) while preparing for what may well be a global recession in the next year. Although I often find leadership articles too airy-fairy, I think the article's suggestions are spot-on for organizations ranging from a small agency up to a massive corporation.

The short version is:

--Don't follow the old rules (such as setting up a crisis task force, which takes too long).

--Prepare for the recession but at the same time prepare to exit it.

--Use scenarios rather than forecasting (which is too broad-brush to identify big problems and opportunities).

--Address burning short-term issues such as financial flows, as well as the longer-term issues.

--Play offense, as well as defense, by looking for growth opportunities as all your competitors struggle, too.

The (slightly) longer version follows.

The McKinsey article goes into more detail on the five suggestions:

--"Don’t follow the old rules. Setting up a crisis task force, for example, the go-to move in past years, is a waste of time; it will be outmoded before it is up and running. Leaders need to find a more flexible and consequently durable stance, engaging the whole organization by embedding a crisis-resistant DNA over time.

--:Prepare for the recession, but at the same time, prepare to exit it. Recessions may be shallow and brief; companies can accelerate through the downturn. This is essential: resilient organizations open an early lead, however small, in comparison with peers. This lead can be significantly widened during the following recovery and growth period. The early advantage can help companies succeed in the long run.

--"Use scenarios rather than forecasting. Forecasting has failed to adequately capture many key events of recent decades, including slowing globalization, the COVID-19 pandemic, the supply chain disruption, and the return of inflation. Learn to plan with scenarios and triggers, regularly revisiting and adjusting them.

--"Develop a resilience agenda that addresses burning short-term issues (for example, financial flows, supply chain disruptions) as well as longer-term challenges (for example, geopolitical shifts or the speed of organizational adaptations). Ensure that resilience is measured, so progress can be tracked and return on resilience investments can be maximized.

--"Focus on resilient growth by reviewing your competitive position and finding strategic opportunities in the current environment (such as acquisitions or new business-building ideas)."

While I'll count on you to read the article if you're interested in learning more about what McKinsey experience and research have gleaned from prior times of chaos, I'll point out a few more things. 

The article talks about how companies can benefit from restructuring their balance sheets heading into a recession, and that strikes me as something that could help insurance companies position themselves both for a recession and for the opportunities that would emerge as the world then rebounds from it. 

Many other examples related to manufacturing companies and issues such as their supply chains, which are not only threatened by a possible recession but by the war in Ukraine and by the political emphasis in a growing number of nations to reduce reliance on foreign suppliers. While those considerations don't directly affect an industry like insurance, which moves bits around, not physical products, insurers still must be prepared for all the upheaval that manufacturers and other clients will go through in our fraught environment. 

Finally, McKinsey offers summary observations about what separates winners from losers in troubled times, including that winners:

--"make faster and harder moves in productivity, preserving growth capacity...

--"act swiftly on divestments in the downturn phase of disruption and on acquisitions at the inflection point of recovery."

I hope those observations help. 

More next week, when my life will be back to normal....

Cheers,

Paul

 

 

 

The 2022 Global Insurance Forum brought together more than 40 insurance executives from around the world to address the industry's role in rethinking old ways of doing business and plan a better path forward.

Join Paul Carroll, editor-in-chief of Insurance Thought Leadership, as he sits down with speakers from the event to take a closer look at critical topics. Over this six-part series, hear from industry leaders about how the insurance industry can leverage technology, mitigate risks, safeguard resources, and help lead the Great Reset of the global agenda.

Webinar 1: A Conversation with Mick Moloney

In this interview with Paul Carroll, editor-in-chief at Insurance Thought Leadership, Mick Moloney of Oliver Wyman explores: How, in these increasingly unpredictable times, insurers can focus on reducing risk while still managing for growth. How the industry is restructuring -- in particular, as brokers and many private-equity firms thrive while life insurers struggle -- and why many are looking at "asset-light" models like those popular in Silicon Valley.  How the nature of work is changing as employees return to offices -- sort of. Register Now

Mick Moloney,  Partner, Global Head of Insurance & Asset Management Oliver Wyman

 

Webinar 2: A Conversation with Olav Cuiper

In this interview with Paul Carroll, editor-in-chief at Insurance Thought Leadership, Olav Cuiper, Executive Vice President, Chief Client Officer at RGA, explains: How to embark on a digital customer journey -- and why that has to happen now. How the pandemic has opened the way to new forms of engagement with customers, based on advice and service that go well beyond traditional products.  Why wholesale banking can be a good model for engagement in the insurance industry.  Register Now

Olav Cuiper Executive Vice President, Chief Client Officer RGA

 

Webinar 3: A Conversation with Ken Mungan

In this interview, Ken Mungan, chairman of Milliman, lays out an innovative idea for how insurance companies and pension funds can deploy their trillions of dollars of capital to finance initiatives to mitigate climate change and the risks it creates. He also: explains the dimensions of the gap explores the role of platforms in innovating ways to tackle the protection gap. concludes with optimism about humanity's ability to innovate in the face of climate change the insurance industry's capacity to protect people from many of the related risks. Register Now

Ken Mungan, FSA, MAAA Chairman Milliman

 

Webinar 4: A Conversation with Thierry Léger

In this interview Thierry Léger, group chief underwriting officers at Swiss Re, explains: that effects from climate change now account for half of reinsurers' net cat losses that the data for half the exposures just isn't good enough at the moment. that demand is surging for cat coverage just as capacity is leaving the market, creating a "monumental" gap of perhaps $40 billion or $50 billion between the demand and the offer. Register Now

Thierry Léger Group Chief Underwriting Officer Swiss Re

 

Webinar 5: A Conversation with Joshua Landau

In this interview, Josh Landau, president of the International Insurance Society, hits the high points from the recent Global Insurance Forum. He lays out: how insurers are leaning in on climate change to increase coverage and mitigate its effects. how companies are using embedded insurance to extend their reach and simplify the purchasing process for customer. how insurers have a great story to tell about being there when they're needed -- as evidenced by the billions of dollars of claims they paid during the pandemic and following the spate of natural disasters.  Register Now

Joshua Landau President International Insurance Society

 

ITC was an action-packed week with over 8,000 attendees and participants across all aspects of the industry! The energy was amazing and contagious! Majesco once again was active and hosted a panel discussion with executives from MMG, Foresight and Combined, with over 250 attendees (standing room only) and lots of questions after the session for all of us. Why such interest? 

Because the industry is rapidly moving forward. Even with challenging macro-economic conditions, there was excitement about the future. What also became clear is companies not actively engaged in optimizing their current business and innovating for the future are at risk. Future industry leaders are doing both aggressively.  

Our panel discussion provided a view into what is reshaping the insurance marketplace and a new generation of leaders. We talked about five key trends that are foundational for insurance leaders.

Customers

Welcome to the customer of the future. New expectations. Different lifestyles and behaviors. Robust digital proficiency. New risk needs. Demand for great experiences at the core. An expectation of value.

Today’s customers are increasingly disillusioned with the traditional insurance approach, creating a loyalty fault line between customers’ expectations and insurers’ ability to deliver what they want and need. While risk and trust tend to be constants, customers increasingly have no guaranteed loyalty to old models, even for trusted brands.

Customers are seeking simple, holistic experiences across their lifecycle and demonstrated empathy. Customers are no longer simply looking for a claim payout. They are seeking help with life and whole-life management. They are expanding their view of financial wellness. Rather than looking at life, health, retirement, auto or property risk separately, customers are increasingly seeking companies that help them manage insurance needs more holistically and broadly through the products, customer experiences and services they provide. 

Digital transformation is required to create a business for a very different future — the one customers expect..

See also: What Future Will We Choose?

Delivering Value

Insurance can be difficult, complex and time-consuming, with products and services that don’t appear to deliver value. Today’s customers expect more. They want a risk product, valuable services and an experience that provides them what they need to manage their lives. This means that insurance products and services are shifting to prevention and mitigation of risk. And in the process, they are humanizing the entire customer lifecycle.

Part of the humanizing aspect is offering niche, personalized products, services and experiences that align to their specific risk need and use their personal data. From an increased interest in life, critical illness and disability insurance to telematics and cyber insurance and more, customers want insurance products that assess their personal risk, lifestyle and behaviors.    

Traditional product-oriented strategies, however, handicap insurers. Instead, insurers must consider a product to be inclusive of the risk product, valuable services and the customer experience to meet customer expectations of delivering value. Part of that value is providing risk-prevention and mitigation capabilities and services that help customers avoid or mitigate losses, dramatically redefining the customer experience.

Our panelists talked about the innovative approaches they are taking to deliver value by offering more than just the risk product, such as a new critical illness product that provides DNA testing to support personalized cancer treatments, a new dental product that includes a smart toothbrush to monitor brushing for improved health and a workers' comp product that supports safety and risk monitoring. 

The bottom line… The potential is limitless to deliver greater value to customers' we just need to think outside the box and keep the customer lifecycle and needs in focus.

Market Reach and Channels

Complexity and out-of-date insurance processes affect almost every line of products. Many insurer innovations are refocusing to a “buying” over “selling” approach, through a multi-channel strategy that meets customers where and when they want to buy. If distribution channels are easy to use, with products that are easy to understand, then insurance has an opportunity to grow through friction-free, multi-channel distribution.

While agents and brokers remain a dominant channel, new channels, such as marketplaces and embedded insurance, are gaining a lot of attention and traction. In fact, embedded insurance was the hottest topic of discussion at ITC and one we have done a lot of research on.

Insurers looking to compete will find it challenging to do it alone. Creating an ecosystem of connected channels, using a range of digital capabilities and connecting with customers when and how they want to, requires collaboration.

In today’s connected world, insurance must play across a wide distribution spectrum of channel options, expanding channels and partners to reach customers when, where and with whom they want to buy insurance. These options form a distribution ecosystem that expands reach but requires a partnership approach, particularly for embedded channels. Embedded insurance completely changes this paradigm. With it, insurance is no longer sold, because it is bought as a part of something else.

The new and growing spectrum of channel options now available, especially the exciting opportunities for embedded insurance, will give innovative insurers and their partners tremendous opportunities for growth, with new markets, new offerings, satisfied and loyal customers…and growing books of business.

See also: Boldly Insure Where No One Has Gone

Technology

Technology provides a foundation to adapt, innovate and deliver at speed to execute on strategy and market shifts. The rising importance and adoption of platform technologies, APIs, microservices, digital capabilities, new/non-traditional data sources and advanced analytics capabilities are now crucial to industry leadership.

From the front office to the back office, SaaS platforms are reshaping the business focus from policy to customer, from process to experience, from static to dynamic pricing, from point-in-time underwriting to continuous underwriting, from historical view of data to predictive and prescriptive data, from traditional products to innovative products and so much more. Insurers’ ability to create and grow an ecosystem of partners to deliver increased value to the customer relationship will deepen and differentiate customer loyalty.

What distinguishes insurance leaders? In our discussion and in many of the sessions at ITC, it was evident that leaders see the market and technological trends as a many-fold opportunity for insurance. Leaders focus on initiatives instrumental to creating new business models, expanding distribution channels, entering new markets, adding services and developing new products by leveraging technology as a foundation and catalyst for innovation. Leaders establish a strong operational and technology foundation that brings together SaaS next-gen core insurance systems, digital experience platforms, partnerships, ecosystems and data and analytics. These are built on a modern architecture using integrated microservices or APIs running in the cloud with a focus on speed and scale.  

Leaders also use technology to fundamentally change the business operating model and to innovate – two key aspects tracked by AM Best in their innovation ratings, reflected in our Strategic Priorities research and AM Best assessments.

There is increasing evidence that those who focus on next-gen core, incorporate new sources of data and analytics, expand channels to reach new market segments and customers and offer innovative products and services are leaping forward from the competition in operational effectiveness and growth. Along the way, these insurers create a new, sustainable business model. They grow their expertise at providing compelling customer experiences to capture new business and foster a greater sense of partnership, trust and loyalty.  

It is clear, even with the macro-economic headwinds and other market challenges, every aspect of insurance is being redefined in the context of the future, and next-generation technology is foundational for that future.

Talent

Talent constraints are forcing companies to get creative. The Great Resignation, including increased early retirements is affecting the knowledge base. A move to virtual or hybrid work models is changing how companies transform themselves. The expanding gig economy and contract workers are giving us workplace in constant motion. Competition for talent and low unemployment rates have created their own source of inflation. These historic trends are fundamentally changing the essence of the workforce, affecting both the insurance culture and the balance sheet.

According to the U.S. Bureau of Labor Statistics, the insurance industry is about halfway through a massive 15-year shift, with 50% of the workforce retiring by 2028. For some insurers, it is even more dramatic, with some projecting 40% of their workforce will be eligible for retirement within the next three to five years. The loss of these employees will create a brain drain and loss of institutional and industry knowledge that insurers will be challenged to replace. Adding to this is the lack of interest in insurance … because it is not necessarily seen as cool or sexy when compared with other industries. 

To respond to the key trends shifting the insurance industry, retention and access to talent is crucial. The panel discussed a range of areas they are focused on, including: partnerships with local colleges to prepare and attract talent, retraining existing employees, embracing workforce flexibility with remote working, accelerating digital transformation operationally with next-gen core, data and analytics and digital. All of this will help insurers both capture the institutional and industry knowledge and decrease the dependence on those leaving, redefining jobs and roles that are more aligned to valued work and leveraging next-gen technology that will make roles broader and more effective. The result will be a reduction in siloed and transactional roles, and a greater degree of satisfaction and experience as employees engage with customers and channels. 

Leaders are finding ways to find and keep talent that is crucial and foundational to building and growing their new digital-first customer-focused businesses.

The Secret Sauce

What separates leaders from others?  What is the secret sauce that increases the chance for success? Fundamentally, what separates successful leaders from others is their focus on strategy – both operational and strategic. Leaders execute on their strategy. They embrace curiosity given the continued pace of change and the need to see the world from the customer’s viewpoint. Curiosity fosters innovation. It requires courage, because innovation is difficult and sometimes results in failure. Learning from failure, however, can create success.

Leaders keep the “pedal to the metal” by staying focused on priorities and initiatives that enable the strategy, including resources and funding. Even leaders might be tempted, in an uncertain economy, to overreact by cutting back budgets, reducing technology investments and pulling back on innovation. Recent history has proven that would be a big mistake. The dot-com crash in 200-2001 and the financial crisis of 2007-2008 proved this strategy to be short-sighted.

Those that continued forward and even increased investments in the face of those major market challenges leapfrogged the competition and were better prepared to respond to the emergence of insurtech competitors and the COVID pandemic that accelerated digital expectations! 

While we don’t know what major disruption is next, we do know that we must be prepared, and putting the pedal to the metal focused on operational and strategic transformation and innovation will make the difference!

Blockchain has been the hottest buzzword for the past few years. The hype is so intense that many private and institutional investors are pouring millions into this technology as the next big thing. But are blockchain virtues stronger than blockchain challenges?

It is an important question, especially for those considering investing in blockchain development. Believing that blockchain is the future, investors might place money into a blockchain product without a complete understanding of the potential benefits and limitations of this technology.

Likewise, a software company might push forward with a blockchain project even if the end product will add little value to an already competitive market. Becoming more knowledgeable about the technology, assessing the blockchain viability in advance and involving blockchain consultants is a sound way to avoid such failures.

In many cases, other technologies perform just as well or even better than blockchain. When developing a solution, it is important to ask whether blockchain offers a competitive advantage in the given situation.

Decentralization is not a must

Cryptocurrencies have their benefits. A cryptocurrency such as Bitcoin is inherently decentralized. When there is no central authority, such as a government, nobody can influence the network. Could Bitcoin be decentralized if it ran through central servers? There would be a risk that the parties controlling the servers would somehow manipulate the cryptocurrency and community.

Consider YouTube’s video streaming services. It might be possible to set up a blockchain to stream videos, but if we could turn to a central authority like Alphabet’s YouTube to administer the network, is a blockchain-driven solution needed?

See also: 4 Technology Trends for 2022-2023

Distributed processing may offer declining benefits

Is distributed processing important when computing power is cheap? In the past, setting up server farms and mainframes was cost-inhibitive, even for large organizations. Over time, however, the costs for high-end PCs, servers and mainframes have declined dramatically. These devices offer compelling and affordable blockchain alternatives.

One way to consider processing power expenses is to look at the cost to process gigaflops, or one billion floating-point operations per second. In other words, how much does it cost to process 1 billion operations? In 1984, it would have cost roughly $18.5 billion. As of 2022, it may cost a couple of cents. As processors become cheaper and more powerful, it is fair to wonder if distributed processing will add value to your particular project.

Companies that use massive amounts of computing power, like Amazon, set up large processing farms. Yet these organizations also have access to vast resources, and computing power is rarely a problem. Meanwhile, high-end PCs and more affordable server solutions are often enough to meet the needs of enterprises and those who would have needed to pay considerable amounts to access or set up powerful servers in the past.

Further, some companies design ways to store personal and corporate data on other parties’ hard drives.

Yet it is risky. What if the other party’s storage drives are damaged? What if the data-storing parties figure out a way to hack the encryption? Any party considering blockchain-based data storage will face a mistrust dilemma—can they fully trust the other party with their data?

Meanwhile, storage costs per gigabyte have plummeted. In 1990, a gigabyte of storage space cost $11,500. As of 2022, a gigabyte costs a mere 2 cents. Given the dramatic decline in storage costs, a blockchain-based cloud storage system may make little economic sense, even for parties who have to store massive amounts of data.

Blockchain is less useful when identities are known

One of the key advantages of blockchain is coordinating transactions between anonymous parties. For example, in a Bitcoin transaction, neither party knows the actual identity of the other party. If scammed, the wronged party would have little recourse because they would not know the scammer’s identity.

Blockchain reduces these risks by verifying the transaction on both ends. If someone wants to sell Bitcoin, the blockchain will first verify that the seller has the necessary funds and that they have not been traded. The seller will not confirm the transaction, by providing their 64-digit long private key, until they get the stipulated amount.

Thus, this system allows two mutually mistrusting parties to carry out a complex transaction without knowing their identities. 

In instances where both parties know each other’s identities, the benefits are less obvious. If a business sends payment to another business but does not get the products or services in return, the wronged party will have legal recourse.

Conclusion: blockchain does not fit every project

From nonprofits and governments to banking and healthcare organizations, blockchain technology expanded adoption to almost every industry sector. 

Though blockchain has vast technological potential due to security and trust, some of its benefits, such as decentralization or distributed processing, can turn into limitations.

Companies should ensure that blockchain’s specific applications align with its competitive advantages. Haphazardly applying blockchain to areas where it offers little-to-no benefit may result in wasted money, time and resources.

Last month, we had the ITC event in Vegas, and I feel obliged to dedicate this edition of the newsletter to my takeaways from this conference. It took a while to digest the two days of discussions: the first day, nine straight hours of meetings with two dinners after, eight hours of meetings the second day and another two dinners.

My summary, with some anecdotal evidence:

1. Some incumbents are getting more and more serious about innovation.
2. Innovators understand that agents and brokers are here to stay.
3. Shiny new things replaced the old ones.
4. Everyone is trying embedding insurance somewhere.

1. Some incumbents are getting more and more serious about innovation

A few months ago, in one of the previous editions of this newsletter, I stressed my belief in the importance of innovation. Well, some incumbents came to ITC well-prepared to meet tech providers, discover new things and exchange thoughts with their peers. This kind of incumbent had a large delegation, a shared agenda among their executives and spaces to efficiently have the meetings.

Other incumbents did not show up, or dramatically reduced the number of their people at the event. Since insurtech stocks got hit and issues such as inflation hit P&Ls, insurance incumbents that were not serious about innovation have happily and quickly canceled insurtech from their agenda.

Since the hype has vanished, we have seen those who were committed to a multiyear innovation journey and those who were only pretending to innovate. To quote Warren Buffett -- he tends to be right -- "when the tide goes out, you discover who’s been swimming naked."

 

2. Innovators understand that agents and brokers are here to stay

Many (really a ton) of the tech players in the expo area were providing tools to support agents and brokers, and to help carriers to work with agents and brokers better. It looks like the people who work in innovation (finally) get that agents and brokers are here to stay.

The past ITC editions were all about digital sales, DTC (direct-to-consumer) and disintermediation. I have always struggled to make people digest that insurtech was more than D2C (and more than startups). We had tons of articles and interviews for all the pandemic period talking about the "digital shift" in the insurance sector. Even when facts and figures about the premium split were available, people still pretended that the reality was different.

Last year, we had the famous trio (Lemonade, Hippo and Root) doing a U-turn from dissing agents to using them for selling more policies (or selling them with a lower acquisition cost). I commented that "it seems agents and brokers are not useful when you have to raise money from VCs, but they are extremely useful when you want to build an insurance portfolio!" Well, looking at the ITC floor, you can raise money even acknowledging that agents and brokers are here to stay nowadays.

Lemonade has just done another big U-turn. Many of you probably remember when they were screaming daily about how insurance incumbents were bad. Here is a snapshot of Lemonade's CEO blog post from six or seven years ago:

Last week, Lemonade announced proudly that they enter the U.K. market with a partnership with Aviva. Here are the words of Lemonade's CEO now: “Pairing Lemonade’s strengths with Aviva’s promises to deliver insurance that is digitally native, yet rooted in the birth of modern statistics in the 1700s. It’s the best of both worlds, giving people a refreshing experience backed by a company they’ve known and trusted for years”.

Yes, this is the same CEO (even if the stock lost about 86% of its value from the maximum in February 2021). A "disruptor" has moved:

• from believing that insurers were chronically affected by "distrust"
• to acknowledging the policyholders' trust in an incumbent insurance carrier.

3. Shiny new things replaced the old ones

Blockchain was missed at ITC 2022. Nobody mentioned it, even though in previous years just about any ew venture would claim to have some blockchain embedded in their approach.

One of the shiniest new toys seems to be the app marketplace. I heard about so many marketplaces in just two days in Vegas....

4. Everyone is trying to embed insurance somewhere

Everyone -- really, everyone! -- is trying to embed insurance somewhere. Most of the initiatives are still early enough to share only enthusiasm and big/vague expectations. Clearly, the embedded topic is cool among investors, and every funder is adding it to the pitch deck.

However -- to set expectations -- an embedded approach will not be enough to guarantee favorable evaluations. I described in detail Hippo's business model and results in a past edition of the Facts & Figures Newsletter, and even more about their success in distributing homeowner insurance through builders was shared on their investor day last September.

But, despite good performance on the currently hot topic, their stock doesn't show any sign of recovery. 

See also: Insurtech: Still No Sign of Disruption