Whats Key To A Strong Innovation Strategy In Insurance
  • July 8, 2021
  • jacquiepirnie
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ileads insurance market minute

Welcome to iLeads Insurance Market Minute, where we bring you the latest, most relevant news regarding the insurance market. Last week you were reading Is the Future of Working in Insurance About to Change? This week we’re bringing you:

 

Broker M&As hit record levels in first half*

There were 339 mergers and acquisitions among insurance agents and brokers in the first half of 2021, a 17.7% rise over the same period last year and the highest first-half total on record, according to a report by Optis Partners LLC.

Grand Rapids-based Acrisure LLC was the biggest acquirer with 31 first-half transactions, which was about 20% below its five-year average for the period, followed by PCF Insurance Services in Woodland Hills, California, with 22; AssuredPartners Inc. in Lake Mary, Florida, with 21; Columbus, Ohio-based BroadStreet Partners Inc. with 19; and Hub International Ltd. with 17, Optis said.

The Chicago-based investment banking and consulting firm tracks M&A activity among U.S. and Canadian agents and brokers selling property/casualty insurance, employee benefits coverage or both.

Private equity-backed buyers and buyers with significant outside financial support continued to dominate the brokerage M&A sector accounting for 66% of all first-half deals, slightly below the 2020 first half, followed by 24% by privately held brokers, up from 17% last year, and only 5% by publicly held brokers, which from 10% in the first half of 2020, the report said.

Find out more in-depth here.

 

7 Major Cyber Insurers Form Company to Coordinate Cyber Analysis, Risk Mitigation*

With cyber attacks and insurance claims on the rise, leading cyber insurers AIG, AXIS, Beazley, Chubb, The Hartford, Liberty Mutual Insurance and Travelers have formed a company to pool their data and expertise and take collective efforts to enhance cyber risk mitigation efforts across the insurance industry.

The new entity, called CyberAcuView, will compile and analyze cyber-related data to enhance value and service to policyholders and help insurers sustain a competitive market for cyber insurance.

CyberAcuView’s activities will be conducted under strict antitrust review and guidance, according to the announcement.

Mark Camillo, most recently head of Cyber, EMEA at AIG, has been appointed CEO.

CyberAcuView is 100%-owned by the founding seven member carriers, six of which are among the top 10 insurers in the market based on 2020 direct written premium, according to AM Best. (Liberty Mutual ranks 14th.) The new company will invite other direct writers of cyber insurance to be associate members, according to its website.

The founding members of CyberAcuView said they will address cyber risk mitigation by:

  • providing industry best-practices to improve resilience to cyber risk;
  • proactively engaging with regulators, law enforcement and other security agencies to counter cybercrime and the rapid rise of ransomware;
  • developing systemic risk solutions and advancing cyber policy language to improve market efficiencies; and
  • analyzing cyber trends to provide enhanced visibility on cyberattacks and the causes of loss so that insurers can identify critical controls and educate policyholders on loss prevention strategies.

Find out more in-depth here.

 

What’s key to a strong innovation strategy in insurance?*

Innovation can be a scary term. It can be an exciting term. It’s something that almost all insurance organizations are thinking about … but what does it actually mean?

“I think many folks would agree it’s about taking the way we do business and finding ways to do it 10x more efficiently, or with 10x more volume. But it really comes down to the question of: ‘Why?’” said John-Isaac ‘JC’ Clark, CEO of Arturo, an artificial intelligence (AI) and deep-learning property analytics start-up, stemming from American Family Insurance. “Some of the big questions from an innovation perspective are: ‘What is it you are looking to achieve? Why are you innovating? What’s the key thing you’re trying to accomplish?”

When creating Arturo, American Family had one fundamental goal – to reduce loss ratios by cutting unnecessary costs in insurance processes. The firm quickly realized it needed better data in order to achieve that goal, and so the question became: ‘How would it get better data?’

“A lot of times, property data […] is collected and captured in methods that haven’t changed in decades – MLS data, tax data, physical property inspection data collected by humans – and so American Family posed the question of: ‘How could you change that and make it A) markedly cheaper, B) markedly faster, and then C) markedly more frequent?’ That’s a really interesting question to ask yourself as an insurer,” Clark commented. “The fundamental things that we need for residential P&C insurance – we want them faster, better, cheaper – and if we get all those things, we should have returns in ROI and value in our business.

“In an innovation process, [we have to] ask ourselves: ‘Are we willing to find the things that will help us get these ROIs?’ And once we prove them, [we must] do the reciprocal thing and turn off or stop doing the things we were doing before.”

One thing that time and time again has proven to help companies in all sectors (not just insurance) achieve their innovation goals is partnership. This is something that Matteo Carbone, founder & director of IoT Insurance Observatory raised during the ‘Strategy Driven by Innovation & Collaboration’ panel at Reuters’ Future of Insurance event.

Find out more in-depth here.

 

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