Property/Casualty Insurance Industry Suffered Largest-Ever Drop in Surplus in the First Quarter of 2020

September 07, 2020

(Jersey City, NJ, Economic & Insurance News by Insurance Market 360 – – Insurance providers face several challenges, including the largest-ever quarterly decline that came in the first quarter of 2020. The surplus for the private property/casualty insurance industry fell $75.9 billion with the stock market’s downturn, Verisk and the American Property Casualty Insurance Association , (APCIA) reported. Other challenges could arise from the impact of the COVID-19 pandemic.

As of March 31, the surplus declined to $771.9 billion, down from the record-high $847.8 billion in December 2019. The decline in valuations of insurers’ investments is said be to blame.

Net income after taxes in the first quarter was at $17.9 billion; the net underwriting gain in the same time was $6.3 billion, which was 19.9% higher than the previous year. Net written premiums increased 6.2% to $164.4 billion in the first quarter of 2020.

The disruptions caused by the COVID-19 pandemic go beyond investment losses in the first quarter, and based on available information and forecasts, Verisk and APCIA expect significant changes in insured exposures, number, and mix of claims. Verisk research estimates that personal auto insurers have offered more than $13 billion in policyholder rebates and credits. MarketStance, a Verisk solution, estimates that at least 1 million insured businesses in the United States will fail in 2020, and direct written premiums in commercial lines will decrease 2.8%.

“The historic drop in industry surplus in the first quarter was concerning for many insurers, as it began to show the impact of COVID-19 on their results,” said Neil Spector, president of ISO. “But the impact of COVID-19 on the industry is just beginning to unfold. Will personal auto insurers see the reduction in losses matching the policyholder rebates and credits offered this spring? To what extent will commercial lines premiums be affected by the challenges facing the economy? How will insurers adapt and continue to serve their customers efficiently in our new normal?”

Verisk recently created an online resource page at to help insurers learn about new regulations, read about critical insights, and discover new products being created to address the effects of COVID-19. It also recently launched a web page that provides strategies for personal lines insurers in the new normal:

View the full report from Verisk and APCIA here.

Source: Verisk Analytics.

Average premium renewal rates experience variable change across all major commercial lines month over month

September 06, 2020

(Tampa, FL, Economic & Insurance News by Insurance Market 360 – – The July results of the IVANS Index, which shows the insurance industry’s premium renewal rate index, show that all lines of business saw increases in average premium renewal rates, except for Workers’ Compensation, which declined.

July premium renewal rates for Commercial Auto, General Liability and Commercial Property,all had positive changes month-over-month. BOP, Umbrella and Workers’ Compensations experienced negative changes.

Highlights of premium renewal rate changes for July 2020 include:

  • Commercial Auto: 5.1%, up from 4.63% last month.
  • BOP: 4.38%, down from 4.64% at the end of June.
  • General Liability: 3.45%, up from 3.36% the month prior.
  • Commercial Property: 5.42%, up from 5.23% in June.
  • Umbrella: 3.23%, down from 3.56% the month prior.
  • Workers’ Compensation: -2.66%, down from -2.49% last month.

“Year over year, we continue to see the commercial lines premium renewal rates on the rise, with the exception of Workers’ Compensation,” said Brian Wood, vice president of Data Products Group, IVANS Insurance Services. “The data insights of the IVANS Index continues to demonstrate a hardening market and acts as further evidence of insurers taking rate to mitigate potential loss.”

Download the complete Q2 IVANS Index report here.

Source: IVANS.

Verisk Telematics Data Integrates with Honda Now, giving new opportunities for usage-based insurance innovation

September 03, 2020

(Jersey City, NJ, Economic & Insurance News by Insurance Market 360 – – On Aug. 6, Verisk announced that auto insurers can access information from owners of connected Honda and Acura vehicles to help Verisk in delivering their usage-based insurance (UBI) programs to a wider audience.

“Data from consenting Honda drivers will be available across Verisk’s portfolio of telematics products, expanding the reach of the Verisk Data Exchange and helping our insurer customers launch or scale-up their UBI programs,” said Karthik Balakrishnan, general manager of Verisk’s telematics business. “We are making more OEM data available to insurers, so they can reach more of the market and reward safe drivers.”

Car owners must consent, but insurers can access driving behavior data during the quoting process for Acura and Honda drivers with The Verisk Driving Score and Verisk Driving Data. Both allow insurers to use historical driving behaviors to apply UBI discounts immediately.

The Verisk Driving Score is filed and available for use in 43 states. Verisk Driving Data targets insurers with their own UBI scoring algorithms, and provides normalized, cross-OEM driving data that can be customized to meet the insurer’s specifications.

“When you combine Honda’s expansive presence in the auto market with the breadth and depth of our telematics solutions, we believe this will unlock tremendous opportunities for all of our telematics’ stakeholders. Automakers, insurers, and consumers will all win,” said Balakrishnan.

Verisk is also powering a new Driver Feedback tool for drivers of eligible models that utilize the HondaLink or AcuraLink mobile apps. Owners who opt in get an individualized Driving Score as well recommendations meant to promote positive behavior change. Vehicle owners may also receive offers for driving behavior-based auto insurance discounts from participating insurers through Verisk’s Discount Alert. Insurers can notify participating drivers about potential discount offers, using the Verisk Driving Score or the insurer’s own proprietary score to identify preferred risk segments.

Source: Verisk Analytics.

IVANS Index for 2020 Second Quarter shows increasing premium renewal rates year over year

September 02, 2020

(Tampa, FL, Economic & Insurance News by Insurance Market 360 – – On July 9, IVANS (a division of Applied Systems) announced that in the second quarter of the year, the IVANS index showed an increase in the average premium renewal rate change for nearly all major commercial lines of business, compared to 2019, except for workers’ compensation. The Workers’ Compensation average premium renewal rate change was negative.

Of note, Business Owners Policy, General Liability, Property, and Umbrella experienced higher average premium renewal rate change than the first quarter of the year. Commercial Property continues to hit record premium renewal rate highs, with a jump of 5.51% in April.

Premium renewal rate change by line of business for Q2 2020 highlights include:

  • Commercial Auto: Premium renewal rate change averaged 4.72% for the quarter, with a quarter high in April at 4.80%.  The quarter low for premium renewal rate change was in June at an average of 4.63%.
  • BOP: Quarter premium renewal rate change averaged 4.97%, representing an increase over last quarter’s average of 4.65%. BOP premium renewal rate change finished the quarter at 4.64% in June.
  • General Liability: Q2 premium renewal rate change increased from Q1 2020, averaging 3.29% relative to 3.08%. The quarter premium renewal rate change reached its low of 3.23% in May, which is still higher relative to all average premium renewal rate change for General Liability experienced in Q1 2020.
  • Commercial Property: Q2 premium renewal rate change increased to 5.29%, reaching a quarter – and year to date – high in April at 5.51%.
  • Umbrella: Quarter premium renewal rate change averaged 3.25% versus 3.06% in Q1 2020. Umbrella premium renewal rate change for the quarter reached its high in June at 3.56%.
  • Workers’ Compensation: Average premium renewal rate change for the quarter reached -2.41%, down from Q1 2020 average of -1.81%.

“The Q2 IVANS Index results show a continued hardening in the market as premium renewal rates for nearly all major commercial lines of business increase year over year, with the exception of Workers’ Compensation,” said Brian Wood, vice president of Data Products Group. “As the pandemic begins to impact the industry, we will continue to monitor premium renewal rate changes via the IVANS Index, delivering guidance for brokers as they advise customers and for insurers to evaluate which lines of business to invest in.”

Download the complete Q2 IVANS Index report here.

Source: IVANS.

Progressive offers pet insurance

September 1, 2020

(MAYFIELD VILLAGE, Ohio, and Boise, Idaho, Economic & Insurance News by Insurance Market 360 – – Individuals bond with their pets, and it’s become increasingly obvious just how important that bond is. More and more, people are looking for insurance that can help them to pay when their cherished pet suffers a medical emergency or needs an expensive treatment.  Progressive recognizes that need and has developed a relationship with Pets Best, a part of CareCredit and Synchrony, which allows them to offer Progressive Pet Insurance by Pets Best

Progressive Pet Insurance by Pets Best is available to all U.S. companies looking to add pet insurance as a voluntary employee benefit. It will be written and serviced by Pets Best.

This voluntary benefit offering is just the latest in Progressive’s collaborations with Pets Best pet health insurance since 2009.

The American Pet Product Association (APPA) reports that approximately 85 million households in the U.S. spent a combined $29.3 billion on veterinary care.

“Pet ownership in this country is at an all-time high, and costs for veterinary care continue to rise as we see more sophisticated medical technologies and improved treatment options.   To help address this challenge, many pet owners are turning to pet insurance for protection,” said Chris Middleton, Senior Vice President and General Manager of Pets Best. “This expanded product offering with Progressive allows us to reach even more business owners, HR managers, brokers and decision makers who turn to Progressive for their commercial insurance needs.”

Employers pay nothing extra if they opt to add Progressive Pet Insurance By Pets Best to their benefit offerings. Pet insurance is available to companies of all sizes and can be added anytime. It offers employers the option to pay for all of the pet insurance or just a portion, passing a portion to the employee. Or, companies can choose to have their employees pay the premiums directly. Payroll deduction is also available to companies with at least 250 employees.

“We understand that employers are looking for ways to create more comprehensive and competitive benefits packages,” said Drew Purcell, Business Development Leader at Progressive. “Employees are placing increased importance on work perks that complement their lifestyles and recognize what’s important to them. By offering pet insurance as a voluntary benefit, employers can tap into the strong bond that many people have with their pets.”

Progressive Pet Insurance by Pets Best provides employers and their employees flexibility. The pet health benefit is easy to implement and can integrate on any benefit enrollment platform. Enrollees can select the amount of coverage that best fits their needs and have access to a free 24/7 Pet Helpline to address any pet wellness questions or concerns.

Companies interested in offering pet health insurance as a voluntary benefit can learn more by visiting or by calling 1-833-449-7450.

Source: Progressive Casualty Insurance Company.

ISO Introduces Optional Endorsement for Damage to Underground Utility Lines

August 30, 2020

(Jersey City, N.J., Economic & Insurance News by Insurance Market 360 – – On July 16, ISO launched a homeowners insurance endorsement that covers damage to underground utility lines. That’s not always part of a standard homeowners’ insurance policy, and it’s also not always covered by the cities where the lines are installed, so if something happens, homeowners could be on the hook.

The new endorsement for the ISO Homeowners Program can provide coverage for damage to underground pipes, wires, and some buried equipment. The damage could be caused by a variety of happenings, like explosions, tree root growth, and wear and tear.

“Claims arising from buried utilities often come as a surprise because deterioration is hidden until a loss of service occurs,” said Doug Caccese, president of ISO Personal Lines. “Excavating the line, fixing or replacing it, and repairing related damage can cost thousands of dollars. Our new endorsement is the kind of value-added enhancement that many consumers are looking for in today’s competitive homeowners market and that our insurer customers can now offer.”

Policyholders could also obtain coverage for additional living expenses should their homes be uninhabitable. They may also obtain coverage to compensate for a loss of rental income.

But that’s not all. As a complement to the endorsement, ISO introduced associated rules and loss costs. The state-by-state filing process for the new endorsement started in June 2020.

To learn more about ISO’s new homeowners endorsement for underground utility lines, visit

Source: Verisk Analytics.

Second Quarter Nonfarm Business Sector Report, Preliminary

August 27, 2020

(Washington D.C., Economic & Insurance News by Insurance Market 360 – – United States Bureau of Labor Statistic released the second quarter non-farm business sector labor productivity preliminary report on August 14, 2020.

According to the report, labor productivity increased by 7.3 percent while output decreased by 38.9 percent.   The 7.3 percent rise was the largest rise since the second quarter of 2009.

Hours worked faced a decrease of 43.0 percent. Changes are seasonally adjusted annual rates.

Nonfarm business sector annual rate for unit labor cost increased 12.2 percent in the second quarter of 2020. A 5.7 percent increase in unit labor cost was realized over the last four quarters.

The report includes additional data, analysis, insight, and information. The announcement can be viewed on the Bureau of Labor Statistic’s website.

Source: United States Bureau of Labor Statistic.

Marsh reveals global commercial insurance pricing increase of 19% in 2020 Q2

August 26, 2020

(New York NY, Economic & Insurance News by Insurance Market 360 – – For the eleventh quarter in a row, the global commercial insurance pricing increased in the second quarter of this year, Marsh’s quarterly Global Insurance Market Index revealed. The Global Market Index measures the change of global commercial insurance premium pricing at renewal. It represents the world’s major insurance markets and comprising nearly 90% of Marsh’s premium.

The 19% increase is the largest since 2012, when the index launched. As with the first quarter, average price increases were driven by increases in property insurance rates and financial and professional lines. Highlights of the report reveal these things:

Global property insurance increased 19%. Global financial and professional lines increased 37%. Global casualty pricing increased 7% on average. Composite pricing in the second quarter increased for the seventh consecutive quarter.

Several regions had double-digit pricing increases. The U.S. saw an increase of 18%; the UK saw an increase of 31%; Continental Europe had a 15% increase. The Pacific region saw a 31% increase too. Pricing increases in these regions were largely driven by increases in property and directors and officers (D&O) coverages.

D&O prices for US public companies increased 59% on average. In the United Kingdom, D&O pricing increases were, on average, more than 100%.

Source: Marsh Inc.