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Cyber Risk, Insurance Industry

Cyber insurance market continues rapid growth as risk management strategies improve

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As the number of cyber security breaches soars, direct written premiums (DPW) for cyber insurance worldwide could rise to $23 billion by 2025, with U.S. businesses paying about 56 percent of the total, according to Triple-I’s latest Issues Brief.

Cyber Insurance: State of the Risk, published last week, says the most recent data shows standalone policies have emerged as the preference for larger insureds, accounting for more than 70 percent of DPW – an increase of 61.5 percent from the prior year. These growth trends may signify that businesses recognize the growing threat of cyber risk requires mitigation beyond the typical coverage limitations of packaged options. Loss ratios also improved over 2021 rates, with declines of 23 percentage points, to 43 percent, on standalone policies and 18 percentage points, to 48 percent, on packaged policies. These improvements are evidence of improved cost-containment strategies. 

A two-edged sword

The brief outlines how technology can foster opportunities for cyber attackers and deliver ways for cybersecurity managers to predict, prevent, and manage threats. Increased use of cloud storage, remote working, and the “bring your own device” IT approach has amplified points of organizational vulnerability. And, as more companies and their employees are increasingly leveraging AI to boost operational efficiency, cyber attackers have created large language models (LLMs) to mimic the functionalities of ChatGPT and Google’s Bard to aid in phishing and malware attacks. 

Even the smallest businesses face threats that can incapacitate an organization. However, organizations can manage breaches more efficiently using AI for faster breach detection and implementing requirements for two-factor authentication, VPN use on external Wi-Fi networks, and data-wiping processes for lost or stolen devices.

Cyber insurance has become an integral part of robust prediction and prevention.

The bulk of cyber insurance claims by volume and frequency stem from ransomware and extortion-based attacks, according to an October 2023 report from Allianz. The report also says the annual proportion of cases in which data is stolen has consistently risen from “40 percent of cases in 2019 to around 77 percent of cases in 2022, with 2023 on course to surpass last year’s total.”  

The Allianz report highlights the growing need for businesses to improve prediction and prevention strategies, internally and with external partners and supply chain relationships. It makes practical sense that indemnification for cyber risk has become a common requirement for vendors doing business with frequently targeted sectors.  

The Triple-I brief states that as insurers refine policy terms to make the scope of coverage more understandable, business risk managers are better able to comprehend how cyber insurance can mitigate their risks. In turn, insurers may have been able to gain improvements in cost containment and rate stability. 

Triple-I supports increased awareness of the threat landscape

Cyber insurance can play a pivotal role in liability management. Sean Kevelighan, Triple-I’s CEO, participated on a panel during the Small Business Cyber Summit, a series hosted by the U.S. Small Business Administration (SBA). Discussions offered insights and tips for cybersecurity risk managers and other experts. Kevelighan explained how cyber insurance can allow “businesses to more strategically allocate their resources” in the battle against cyber threats.

Kevelighan participated in another fall 2023 cyber risk panel hosted by The Institutes Griffith Foundation in collaboration with Indiana University. The presentation, Cyber Risk: Exploring the Threat Landscape and the Role of Risk Management, focused on risks to national infrastructure and companies. Accordingly, panelists discussed how regulators and businesses have responded to the inevitable threat of cyberattacks. Speakers shared expertise in three core areas:

  • the Cyber Threat Landscape
  • ransomware and insurer solvency; and
  • eminent challenges for cyber risk insurance.
Insurance Industry, Legal Environment

Who’s Financing Legal System Abuse? Louisianans Need to Know

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Legal system abuse in Louisiana costs every one of its citizens more than $1,100 annually, according to the American Tort Reform Association (ATRA). The state’s litigation environment was also cited by the Insurance Research Council (IRC) when reporting how Louisiana is the least affordable U.S. state for both auto and homeowners insurance. And then there’s shadowed Third-Party Litigation Financing (TPLF) continuing to sneak its way into this costly conundrum, with virtually no one understanding who’s behind it and what ulterior motives they may have.

Louisiana’s state lawmakers passed a measure (Senate Bill 196) last year aimed at reducing legal system abuse and litigation costs, but the measure was vetoed by former Governor John Bel Edwards.  The Litigation Financing Disclosure and Security Protection Act would have required plaintiffs to disclose whether their legal fees were being financed by a third-party with no obvious stake in the civil court case’s outcome, other than financial gain, or even worse foreign manipulation of America’s legal system.

Third-party litigation financing (TPLF), a multi-billion-dollar asset class which provides the financial resources for plaintiffs to file lawsuits, is growing exponentially because the U.S. legal system has increasingly become a place to secure huge paydays. Much like other shadowed banking tactics, financiers prefer to stay anonymous to avert regulatory scrutiny. However, beyond the financial gains, evidence is pointing toward foreign, even tax-free sovereign investments footing the bills.

Louisiana’s own U.S. House Speaker Mike Johnson (R-LA) is keenly aware of the potentially problematic foreign investment issues of TPLF, introducing federal legislation weeks before his recent election and being handed the leadership gavel. If passed into law, The Protecting Our Courts from Foreign Manipulation Act would stop foreign entities and governments from financing litigation in U.S. courts and shine a light on a shadowy part of this nation’s legal system. Similar legislation was introduced in the U.S. Senate and co-authored by another Louisianan, Senator John Kennedy (R-LA).

Much as Louisiana’s federal elected officials are working to address issues involving legal system abuse, such as TPLF, the State of Louisiana will benefit more directly by focusing on what’s happening in its own back yard. There is a simple formula to what combining increased climate risk with legal system abuse does – it creates a crisis in terms of affordability and availability of insurance.

The price of insurance is the effect of increased risk, not the cause. Louisiana’s high legal costs are driving up prices on virtually all goods and services for its citizens. Taking important steps toward litigation (and litigation financing) reform should be a top consideration in 2024.

A condensed version of this op-ed was published as a letter to the editor by Triple-I CEO Sean Kevelighan in February 2024 in The Baton Rouge Advocate and the New Orleans Times-Picayune.

Insurance Industry

Insurers Donated
Over $1 Billion in 2022
for Good Works

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KiDS NEED MoRE, a nonprofit dedicated to children and families coping with life-threatening illnesses and traumatic interruptions of normal childhood, is just one of the worthy organizations IICF supports.

By Loretta Worters, Vice President – Media Relations, Triple-I

The insurance industry contributed more than $1 billion to charitable endeavors in 2022, according to an independent review by the Insurance Industry Charitable Foundation (IICF).

Alongside the industry’s charitable giving, the IICF Philanthropic Giving Index revealed other community contributions in 2022, demonstrating the industry’s dedication to giving and volunteerism:

  • 137,300 nonprofit partners and causes received support
  • 7.5 million volunteer hours were served
  • 94,000 insurance professionals volunteered

These numbers were announced on November 15, National Philanthropy Day, which is celebrated by fundraising professionals, government leaders, foundations, businesses, individual donors and others who wish to honor all the contributions philanthropy has made. 

“Philanthropy Day provides an opportunity to reflect on the meaning of giving and all that the insurance industry has accomplished,” said IICF Vice President and Chief Program Officer Elizabeth (Betsy) Myatt. With research support from Triple-I, IICF reviewed data from 120 companies, representative of all sectors of the insurance industry, for this snapshot of industrywide charitable giving and supporting data.

“These collective philanthropic findings provide the industry with a remarkable numeral representation of the generous charitable giving and support by our many insurance businesses,” said Myatt, who is also the Executive Director of the Northeast Division of IICF.

IICF is a nonprofit that unites the shared strengths of the insurance industry to help communities and enrich lives through grants, volunteer service, and leadership. Established in 1994, it has served as the philanthropic voice and foundation of the industry for close to 30 years, contributing $47 million in community grants along with over 337,000 volunteer hours by more than 115,000 industry professionals. IICF reinvests locally where funds are raised, serving hundreds of charities and nonprofit organizations for maximum community impact. 

Among the many charities IICF awards grants to are:

  •  KiDS NEED MoRE, a 501(c)(3) nonprofit charitable organization dedicated to enhancing the lives of children and  families coping with life-threatening illnesses and traumatic interruptions of the normal childhood experience;
  • 180 Turn Lives Around, which provides programs and services for victims of domestic and sexual violence;
  • Boston Scores, helping to break barriers to advance racial and gender equality;
  • National Alliance on Mental Illness, whose mission is to help families and individuals affected by mental illness build better lives through education, support and advocacy.

Insurance Industry

Educate to Empower: Financial Literacy Key
to Helping Abuse Victims

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By Loretta Worters, Vice President – Media Relations, Triple-I

Financial abuse occurs in 98 percent of abusive relationships and is the number one reason victims stay in or return to abusive relationships, according to the Center for Financial Security at the University of Wisconsin – Madison. Financial security and access to resources can make all the difference to domestic violence victims when deciding to leave an abusive relationship — yet 78 percent of Americans don’t recognize financial abuse as domestic violence.

Insurance is an important part of financial planning that can help survivors move forward.

The forms of financial abuse may be subtle or explicit. They include concealing information, limiting the victim’s access to assets, or reducing accessibility to family finances. Financial abuse – along with emotional, physical, and sexual abuse – includes behaviors to intentionally manipulate, intimidate, and threaten the victim and entrap them in the relationship. In some cases, financial abuse is present throughout the relationship and in others it becomes present when the survivor is trying to leave or has left the relationship.

In support of Domestic Violence Awareness Month, Triple-I offers financial strategies to protect victims before and after leaving an abusive relationship. They include securing financial records, knowing where the victim stands financially, building a financial safety net, making necessary changes to their insurance policies, and maintaining good credit. 

The National Coalition Against Domestic Violence (NCADV) reports that 10 million people are physically abused by an intimate partner each year, and 20,000 calls are placed to domestic violence hotlines each day. In addition, 85 percent of women who leave an abusive relationship return because of their economic dependence on their abusers. Furthermore, the degree of women’s economic dependence on an abuser is associated with the severity of the abuse they suffer.

Ruth Glenn, who currently serves as president of Public Affairs for NCADV and has advocated —professionally and personally — for many policies, including reauthorizing the Violence Against Women Act and legislation involving the intersection of firearms and domestic violence. She noted that “the NCADV’s partnership with the insurance industry, and Triple-I in particular, is critical to developing tools and resources for victims and survivors of domestic violence.” 

One example of insurers that are developing such tools is The Allstate Foundation, which has been committed to ending domestic violence since 2005 through financial empowerment by helping to provide survivors with the education and resources needed to achieve their potential and equip young people with the information and confidence they need to help prevent unhealthy relationships before they start.  The foundation offers a Moving Ahead Curriculum, a five-module program that helps prepare survivors as they move from short-term safety to long-term security. Modules of the curriculum include:

  • Understanding financial abuse;
  • Learning financial fundamentals;
  • Mastering credit basics;
  • Building financial foundations; and
  • Long-term planning.

“One of the most powerful methods of keeping a survivor trapped in an abusive relationship is not being able to support themselves financially,” said Glenn, who is author of the memoir, Everything I Never Dreamed, which chronicles her own domestic violence experiences.

“That’s why insurance and financial education are so important,” she said.  “Education can save a life.”

Insurance Industry

Surge in U.S. auto insurer claim payouts due to economic and social inflation

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The latest Insurance Information Institute (Triple-I) research indicates that between 2013 and 2022, economic and social inflation fueled a $96 to $105 billion increase in combined claim payouts for U.S. personal and commercial auto insurer liability.  

The report “Impact of Increasing Inflation on Personal and Commercial Auto Liability Insurance” outlines Triple-I’s continued exploration of the impact of social inflation on insurer costs and claim payouts. The study proposes that increasing inflation drove loss and DCC (defense containment costs) higher in both insurance lines– by 6.5 percent ($61 billion) of total loss and DCC for personal auto and by 19 to 24 percent ($35 to $44 billion) for commercial auto. 

Key Takeaways 

  • Estimates place the average annual impact of increasing inflation at 0.6 percent for personal auto and 2.7 percent for commercial auto. 
  • The accident rate (claim frequency) declined, and claim severity (size of losses) increased dramatically for personal and commercial lines. 
  • Increasing inflation was mainly driven by social inflation factors before 2021, and since that year, it has continued as a product of economic and social inflation. 

Researchers Jim Lynch, FCAS, MAAA, Triple-I’s former chief actuary, Dave Moore, FCAS, MAAA, president, Moore Actuarial Consulting, LLC, and Dale Porfilio, FCAS, MAAA, Triple-I’s chief insurance officer, approached the topic in a manner similar to their prior collaborations (in 2022 and early 2023). They used loss development patterns to identify inflation for selected property/casualty lines in excess of inflation in the overall economy. However, they extended their methodology in this project to use annual statement data through year-end 2022. Also, in this report, the authors use the term “inflation” for the first time to convey the operative mix of social and economic inflation on insurers’ costs. 

Commercial Auto Liability 

Data indicates that commercial auto liability faces its share of challenges, too, as losses have outpaced the growth rate of the overall economy. Claim severity (size of losses) has risen 72 percent overall since 2013, with the median annual increase at 6.3 percent. The report compares this change to the annual median increase of 2.1 percent in the Consumer Price Index, an observation offered as evidence that before 2020, social inflation may have been a primary factor in loss trends.  

Researchers estimate that from 2013 to 2022, increasing inflation drove losses up by between $35 billion and $44 billion, or between 19 percent and 24 percent. The pandemic brought significant change to commercial auto liability, decreasing claim frequency while increasing claim severity more dramatically. Researchers contend the loss development factors for this line of business signal an ongoing problem of inflationary factors. 

Personal Auto Liability 

This line took in four times the net earned premiums in 2022 as commercial auto liability. However, multimillion-dollar personal auto settlements are rare; consequently, the cases have less impact on insured losses or development patterns. Premiums and insurer losses in this line fluctuated over the prior two decades but continue to increase, albeit more slowly than the overall economy. In recent years, however, losses have been growing faster than premiums. Since 2020, premiums fell 13 percent, while losses rose 15 percent. And, after 2019, severity increased dramatically, with the compound annual increase holding 3.0 percent from 2013 to 2019, then tripling to 9.2 percent compounded annually. 

 
The double whammy of economic inflation and social inflation 

The report describes the nuanced findings of personal and commercial auto liability –understandably different as these markets differ in many aspects, including size and risk factors. The analysis reveals some trends in common, however. Findings in commercial and personal auto liability indicate that the overall accident rate (claim frequency) declined during the early pandemic years, yet the severity (size of losses) increased more dramatically.  

The earliest study in this series looked at insurance trends through the end of 2019, focusing on loss development factors (LDFs). Since economic inflation was stable, but LDFs were increasing steadily during that time, the researchers concluded that economic inflation was likely not the cause of rising costs. Then, beginning in 2021, a sizable uptick in the CPI-All Urban signaled a rise in overall economic inflation.  

The resulting implications for underlying insurer costs can be observed in factors that impact claim payouts, such as replacement costs. The report states that since 2008, replacement costs for commercial and personal auto insurance have outpaced overall prices in the economy by 40 percent. Since 2019, these costs have risen almost three times faster than prices overall. Thus, for the years prior, researchers continue to attribute the bulk of losses for both lines primarily to social inflation but propose that social inflation and increasing overall economic inflation share the credit beginning in 2020. 

Triple-I plans to continue to foster a research-based conversation around social inflation. For an overview of the topic and other helpful resources about its potential impact on insurers, policyholders, and the economy, check out our knowledge hub, Social inflation: hard to measure, important to understand.  

Insurance Industry

IRC: Consumers Deem
Most Rating Factors Fair

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By Max Dorfman, Research Writer, Triple-I

Most consumers believe the majority of personal insurance rating factors that insurers use to underwrite and price homeowners and auto coverage are fair, according to a new survey by the Insurance Research Council (IRC) – like Triple-I, an affiliate of The Institutes.

But there was some variation regarding which variables they consider fair.

Overall, consumers were more favorable toward factors they perceived to be directly related to the risk of the insured property (condition of the home, cost of rebuilding, miles driven, vehicle information, etc.). They were less likely to rank fair on aspects connected to the insured’s personal profile.

The study, Public Perceptions Regarding the Fairness of Insurance Rating Factors, focused on homeowners and personal auto insurance. IRC found that all 19 homeowners insurance rating factors were assessed to be fair by most respondents, and the majority deemed 10 of the 14 personal auto factors.

Insurance companies use statistically predictive rating variables to assess risk and determine policy prices, helping to accurately align premiums with risk and offer coverage to higher-risk consumers. The variables consider several socioeconomic factors to determine these coverage costs, including gender, age, education, and credit-based insurance scores.

“Given how inflation and other factors have driven up the cost of auto and homeowners insurance in recent years, IRC was not surprised to learn that paying for these essential coverages has been a financial burden for a sizable number of Americans,” said IRC president and Triple-I chief insurance officer Dale Porfilio.  “Yet, at the same time, consumers expressed widespread support in our survey for the fairness of the rating factors used by insurance carriers to price their auto and homeowners policies.”

Among personal auto factors, those most likely to be deemed fair included:

  • Traffic conviction record;
  • Driver’s loss/claim history; and
  • Driving behavior data from telematics.

However, the personal auto factors that were least likely to be considered fair were:

  • Education level;
  • Marital status; and
  • Gender of the driver.

Concerning homeowners insurance, the most fair factors included:

  • The use of safety systems
  • Condition of home; and
  • The estimated cost of rebuilding.

Least agreeable factors for homeowners involved:

  • Credit history;
  • Condition of surrounding building; and
  • The data from a connected device.

Previous IRC research that focused on consumer attitudes about the use of credit history as an insurance rating factor found that skepticism about the link between credit and future insurance claims declines when the predictive power of credit-based insurance scores is explained to them.

Insurance Industry

National Black Business Month – Dale Sharpe Jenkins, M.S., CIC, AINS, Owner, The Jenkins Agency Incorporated, Celebrates 25 Years in Business

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By Kris Maccini, Head of Digital Distribution, Triple-I

Dale Sharpe Jenkins, M.S., CIC, AINS, principal/owner, The Jenkins Agency Incorporated, is quick to point out that she didn’t choose a career in insurance – insurance chose her. A first-generation college graduate, Jenkins sought a profession that would provide her and her family with opportunities. She began her career in life insurance at a small company in Columbus, Ohio before moving on to Progressive Insurance and opening its first claims office in Phoenix, Arizona. 

“Insurance plays an important role in our lives. The insurance industry has allowed me to make a great living and help people with their needs at the same time.” 

Eventually, Jenkins moved into a senior construction underwriter position at St. Paul Insurance Companies (now Travelers) and made the shift from claims to underwriting. While it was a rewarding position, Jenkins started a family and wanted more flexibility in her career. In 1998, she leveraged her experience in construction to build The Jenkins Agency Incorporated, an independent agency based in Arlington, Texas, specializing in commercial underwriting for construction, religious organizations, and other non-profits. 

“We write property/casualty, life, health, and group benefits. Most of our customers are small Black-owned businesses, and we are minority certified. I’m proud of what our agency has been able to do for the Black business community. Their success is our success.” 

Diversity has been at the epicenter of Jenkins’ career. The Dallas Black Chamber has recognized the agency for its work in the Black community; the Dallas-Fort Worth (DFW) Airport named The Jenkins Agency Incorporated as its Diversity Champion of 2023 at the SOAR Awards this year; and Business Insurance Magazine has also acknowledged the agency for its diversity efforts.  

In 2008, Jenkins joined the National African American Insurance Association (NAAIA), where she was a member of the founding Board of Directors and served as president of the Dallas chapter for three years. Since 2011, the NAAIA DFW Scholarship Foundation has provided financial awards to high school and college students interested in careers in insurance, finance, and marketing. 

“I’m very focused on providing [insurance] industry awareness to young people starting out or trying to discover a career for themselves. I was on the receiving end early in my career, and it’s nice to give back now.” 

The Jenkins Agency Incorporated celebrates its 25th anniversary this year. Reflecting on the past two decades, Jenkins feels blessed to be in her current position. She founded her company on her own without a book of business and built it from the ground up, relying on referrals. Her husband, Jeff, joined the business in 2000. 

“In the early years, we were in survival mode. We realized if we could make it to five years, we could make it to 10. Hiring our first employees was a highlight, and most of them have been with us for over a decade.” 

Like every small business, The Jenkins Agency experienced challenges in its initial years. Jenkins remembers the difficult transition from working in a large company to running her own business and maintaining a work/life balance. 

“Whether working for yourself or others, flexibility is very important when you are working and raising a family. Having my own business granted me that flexibility. I was able to work around my daughters’ schedules and still manage responsibilities at the office. Having your own business doesn’t mean you work less; in my experience, you work more but with the advantage is being able to manage your day.” 

To this day, Jenkins cites her two daughters as inspiration, along with other up-and-coming professionals. Both of her daughters have successful careers–her youngest daughter as a risk manager for a municipality in Texas and her oldest daughter as a business owner in California and a college professor. Entrepreneurship runs in the family. Jenkins’ father was also a business owner.  

Jenkins, who teaches risk management at the University of Texas in Arlington, is also motivated by her students. “My inspiration comes from the younger generation and how they embrace diversity and balance work and home. I’m also impressed with their talent.” 

Regarding the ongoing efforts to push for diversity, equity, and inclusion in the industry, Jenkins is cheering on this generation and asks young Black professionals not to lose ground.  

“My generation had to maneuver in a different way. We tried to fit in in any way we could–from hair to speech. This generation has a voice, and they are not afraid to be heard. To them I say…Keep your skills sharp so there is no question whether you can do the job and be proud of who you are.” 

Looking to participate in discussions around addressing disparities and working towards a more inclusive and equitable insurance landscape? Sign up for Empowering the Community: The Importance of Insurance in the Black Community, hosted on September 12 by The Black Insurance Industry Collective (BIIC).

Dale Sharpe Jenkins, M.S., CIC, AINS is an academic member of the Insurance Information Institute through her affiliation with the University of Texas at Arlington. 

Insurance Industry

Group Captive Unites Risk Managementand Sustainability

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By Mary Sams, Senior Research Analyst, Triple-I

Impact Re Ltd. – a member-owned captive fronted by Zurich North America – brings together companies from a variety of industries that share an interest in both risk management and sustainable business practices.

The captive is a partnership between Zurich North America and Innovative Captive Strategies (ICS). In addition to being one of the largest providers of commercial insurance products and services in the United States and Canada, Zurich North America is part of global insurer Zurich Insurance — a company widely recognized for its commitment to sustainability. 

Group captives enable companies with similar risk profiles to reduce their insurance costs by pooling risk and simplifying risk management. Typical structures include committees managing risk control, finance, and underwriting.  Impact Re adds a sustainability committee and will offer members greater control and management of auto, general liability, and workers compensation programs, as well as providing access to management services focused on sustainability from Zurich Resilience Solutions (ZRS).

ZRS will conduct a sustainability assessment of the member company’s carbon footprint and energy consumption. The assessment is not designed to exclude non-conforming companies from membership but to provide baseline data against which members can measure their progress toward their own sustainability goals. The objective is to quantify the business benefits of sustainability and communicate those benefits to stakeholders.

Impact Re is among the winners announced in the Business Insurance 2023 Innovation Awards.

Learn More:

Group Captives Offer Cost-Sensitive Companies Opportunities to Save in Face of Inflation

Pandemic Fuels Growth in Captive Insurance

Triple-I Paper Takes a Detailed Look at Member-Owned Group Captives

Insurance Industry

Embedded Insurance Has Been Slow to Bear Fruit for Most Lines of Business

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By Mary Sams, Senior Research Analyst, Triple-I

“Embedded insurance” – often described as “B2B2C insurance” – has long been touted as a path toward innovation and growth in the traditional insurance market. However, it has been slow to mature.

The term refers to the integration of insurance products and services into retail transactions. The objective is to offer insurance solutions at the point of sale or as part of a package of products or services. This requires that the products and processes be simplified so that the consumer can make an informed purchase. Complex commercial insurance products are not likely to succeed using the embedded insurance model.

Six years ago, according to a report published by global investment management firm Conning, embedded insurance was frequently cited as a use case for distributed ledger technology or blockchain. Blockchain is a complex, ledger-centric technology that has a multitude of benefits, such as enhanced data security, immutability, and optimized data sharing.

More often than not, these benefits are overshadowed by cryptocurrency’s somewhat lackluster reputation. This complexity – and the more recent travails of crypto — may have contributed to the slow adoption of this technology for embedded insurance.

 “We’re overwhelmed by the insurance industry’s curiosity in network-based technologies, such as blockchain,” says Brendan Picha, head of outreach for the RiskStream Collaborative. “We have several initiatives, some global in scope, that are reaching a welcomed point of maturity within the enterprise. This is happening at an interesting intersection with developments of other emerging technologies. The industry is now looking carefully at how these technologies could work together and RiskStream is well positioned to support and usher in this exploration.”

RiskStream – like Triple-I, an affiliate of The Institutes – is a member-led non-profit that aims to create an ecosystem using blockchain to streamline data flow and verification, reduce operating and vendor costs, drive efficiency, and enhance customer experience.

Many applications for embedded insurance have used open APIs and microprocesses to scale applications with retail partners. These technologies have helped support the growth of embedded insurance in travel insurance, personal auto, homeowners, and extended warranty products.

However, for most traditional insurance products, embedded insurance poses a challenge. These products are “sold, not bought,” and moving the purchase to a simplified platform and linking it to the retailer offers customers choices they may not be prone to make without a sales pitch.

Private equity investment companies have been attracted to companies seeking to expand into embedded insurance, attracting $3.5 billion since 2015, according to Conning. Gartner, a large research and consulting firm, has positioned embedded insurance at the heart of what it predicts will become the dominant insurance business model.

Growth in online sales since 2020 has increased the opportunities presented by embedded insurance as consumers have become more engaged in all types of online transactions. Financial services companies have grown and expanded tremendously during this time. Consumers have engaged in buying and selling automobiles online and have expanded the OEM relationship.

However, online sales of insurance have not seen similar growth. In 2017, Tesla launched a full-stack insurance business direct to consumers. While this technically is not embedded insurance, it illustrates the benefits of sharing telematics data from vehicles in underwriting the insurance program.

Expectations for embedded insurance are varied. Personal lines insurance with $400 billion in premium and small business with $100 billion in premium continue to be the greatest targets, according to Conning. Simplifying the insurance application, growing premium, lowering expense ratios, and narrowing protection gaps are all opportunities. The realization of these benefits and successes will depend on their being embraced by the carrier-retail partners.

Industry Awards & Events, Insurance Industry

2023 Global Inclusion in Insurance Event to Be Held in New York City

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By Loretta L. Worters, Vice President, Media Relations, Triple-I

The Insurance Industry Charitable Foundation (IICF) will host its Inclusion in Insurance Global Conference June 13-15 at the New York Hilton Midtown.

The first in-person international event in the conference series since the 2019 Women in Insurance Global Conference, it will bring together hundreds of insurance professionals, C-suite executives, and experts on leadership and diversity, equity, and inclusion (DEI), along with sustainability, wellness, and business leaders for sessions dedicated to advancing ideas into action and providing actionable take-aways and strategies.

What makes any conference strong is the quality of the content and its speakers. IICF’s planning committee, which changes from year to year, is made up of industry professionals who are closest to the issues of the day, representing all areas of the United States and the United Kingdom in the planning.  It’s an industry working together that makes this conference particularly powerful. 

This year’s conference will feature emerging topics in leadership, personal and professional growth, the business of insurance, and the future of work.

Leadership topics include:

  • Personal Finance, with Jean Chatzky — financial editor of the Today Show for 25 years and founder and CEO of HerMoney.com and the coaching programs FinanceFixx and InvestingFixx;   
  • Building the Public Voice of Women, with Emily Donahoe, founder/principal, WOMENSPEAK Training; and
  • Navigating Intergenerational Differences, with Chris Desantis, author, speaker and podcast host of Cubicle Confidential.

Industry topics include:

  • Attracting Customers to the Insurance Offer (in an Inclusive Way), with Claire Burns of The Hartford. 

Inclusion topics include:

  • Changing the Conversation about Bias, Discrimination, and Privilege Using Brain Science, with best-selling author and speaker Eric Bailey; and
  • Changing the Workplace for Good, with diversity speaker, author, and consultant Michelle Silverthorn. 

Other speakers include:

  • Carmen Duarte, vice president, Diversity, Inclusion & Social Impact, Intact Insurance Specialty Solutions; and

“IICF is thrilled to welcome such an accomplished field of speakers for the eleventh year of what was formerly known as the IICF Women in Insurance Conference Series,” said Elizabeth Myatt, vice president, chief program officer, and executive director of the IICF Northeast Division.  “This event serves as a powerful catalyst for our industry as we bring together insurance professionals of all ages and career stages to discuss, learn and propel critical strategies.”

Elizabeth Myatt, vice president, chief program officer, and executive director of IICF Northeast Division

Myatt, who has led the conference since its inception, noted that it’s her favorite part of the job.  “It has been wonderful to see the evolution of the conference series,” she said. “It is not just gender-focused — it is all kinds of diversity, leadership, and innovation and it’s the business of the industry itself, which has made it so valuable and meaningful to attendees.”

Myatt recognizes the importance of advancing DEI, which must be embedded in everything in the business, and everyone needs to see the shared value. She said a Congressional report this year spelled out some of the ways where the insurance industry has made an impact. 

“There has been progress in gender diversity and for African-Americans, though we have not made as much progress within the Hispanic community as we’d like,” she said. “Through our conferences and the IDEA Council’s development of the IICF Talent Hub – an online resource center for non-traditional job seekers to learn about insurance industry jobs and career opportunities – and the Mentoring Alliance, which will prepare, inspire, and empower diverse talent by pairing them with role models and allies from leading companies across the industry, we are starting to see results.”

The theme for the last four years of the global conference has been advancing ideas into action, Myatt said.  

“We want to provide tools, as well as new thinking.  We don’t want the ideas that are shared here to stay in the room,” she said. “We plan to arm our audience with ways to make change, whether it’s personal, professional, or cultural.”

To register, for the conference, go to: https://inclusion.iicf.org/.