Latest Studies

When it comes to customer satisfaction in the commercial insurance marketplace there are widening satisfaction gaps among small businesses of different sizes. The study found that the gaps in overall satisfaction among micro- (fewer than five employees) or smaller-size (five to 10 employees) small businesses and larger-size (11 to 50) small businesses have never been wider, with significant year-over-year improvement in overall satisfaction among customers in the larger-size group and sharp declines among customers in both smaller-size groups. Greg Hoeg, vice president of U.S. insurance operations at J.D. Power said, “Our data show that the small commercial market is still ripe for competition. While looking at the small business market in aggregate shows relatively steady levels of customer satisfaction year over year, the serious gap between very small businesses and larger small businesses could present an opportunity for those carriers that get the small business formula just right.” The survey found that demand for self-service is growing and outpaces actual usage. Micro businesses have the greatest disparity between preference and usage; their preference for self-service is nearly twice the rate of their actual usage. Farmers Insurance Group ranks highest among small commercial insurers, Allstate Corp. ranks second and Chubb Ltd. and Erie Insurance Co. rank third, in a tie. The 2017 U.S. Small Commercial Insurance Study is based on 3,312 responses from insurance decisionmakers in businesses with 50 or fewer employees who purchase general liability and/or property insurance.  Press Release

This report details how state insurance departments manage available resources to regulate the insurance industry. The first volume, published in June, included data on staffing, budgeting and examination information. The second volume includes admitted premium by state, by line of business; excess and surplus lines premium; and relational statistics including budget as a percent of revenues, budget as a percentage of premiums and revenues as a percentage of premiums. The report provides ratios that demonstrate the relationships between the budget, revenue and premium data. Revenues collected from the insurance industry increased 3.27 percent since 2015 to $23.4 billion in 2016. Total taxes collected increased by 5.0 percent. The number of U.S. domestic insurers increased from 5,926 companies in 2015 to 5,977 companies in 2016. The total number of company examinations completed was 1,738. There were 235 liquidations in progress at year-end, as well as 38 rehabilitations in progress. Premiums increased by 4.0 percent to nearly $2.2 trillion since 2015. The five states with the most premiums written in all lines were, in order of premium volume, California, New York, Texas, Florida and Pennsylvania. These five states accounted for 40.6percent of all insurance premiums in the United States. Full report.

This report by Cornerstone Research and the Stanford Law School Securities Class Action Clearinghouse found that during the first six months of 2017, plaintiffs initiated 226 securities fraud class actions in federal court, more than in any equivalent period since enactment of the Private Securities Litigation Reform Act of 1995 (PSLRA). The 226 filings were 135 percent higher than the historical semi-annual average of 96 filings between 1997 and 2016. Both traditional and M&A-related filings were at record levels. Traditional filings increased from 95 in the second half of 2016 to 131 in the first half of 2017. At the same time, M&A-related filings rose from 57 to 95. Full Report

An analysis of federal statistics conducted by the Associated Press (AP) shows that older workers are dying on the job at a higher rate than younger workers, even as the overall rate of workplace fatalities declines. The trend is disturbing since it is being detected at a time when baby boomers are not following the tradition of retiring at age 65. The federal government estimates that older workers will represent 25 percent of the labor market by 2024. The AP analysis showed that the workplace fatality rate for all workers, including those 55 and older, declined 22 percent during the period of 2006 through 2015. However, the rate of fatal accidents involving older workers was 50 percent to 65 percent higher, varying from year to year. In 2015 the number of deaths among all workers declined to 4,836, compared with 5,480 in 2005, while workplace fatalities among older workers showed a small increase, from 1,562 to 1,681. The number of older workers increased by 37 percent during the same period, compared with a 6 percent increase in the total number of workers. The article summarizes the changes in the categorization of accidents by the Bureau of Labor Statistics Census for Fatal Occupational Injuries and reports on changes in fatal accident rates for older workers in various states. Full Article

It has been nearly 20 years since Hurricane Andrew devastated South Florida. More than 25,000 homes were destroyed, and another 100,000 were damaged. At the time, Andrew was the costliest disaster in U.S. history, one that led to a major overhaul of building codes in Florida. Upon the anniversary of the storm, this Swiss Re report speculates what would happen if an Andrew-sized storm hit Florida Since 1992 Miami-Dade County has had a population growth of more than 35 percent and huge growth in property values and asset concentration. The same storm today could cause an estimated economic loss between $80 billion and $100 billion, of which only $50 billion to $60 billion would be covered by insurance, leaving a significant shortfall to be made up by taxpayers and governments. If a present-day Category 5 hurricane made landfall 20 miles north of Andrew’s historical landfall location, putting its eye directly over Miami, losses could be between $100 billion and $300 billion. Full Report

U.S. captive insurance companies rated by A.M. Best ended 2016 in strong form, with a 16 percent year-over-year increase on pretax operating income to $ 1.6 billion, which included more than $803 million in underwriting profit. The report notes that captive insurers and other alternative risk transfer mechanisms continue to play vital roles in the U.S. and global commercial markets. Although the sector's revenue accounts for less than 10 percent of the estimated global commercial market of $ 800 billion, captives have become an integral and well-established part of the overall market. Full Report (subscription required)

Of the many critical issues facing global property/casualty (P/C) insurance carriers today, fraud is one of the more challenging ones. Criminals constantly change their tactics, making fraudulent activity difficult to fight. This report explores the types of fraud P/C carriers typically encounter, and examines the technology that is available to them to combat it. The report analyzes various vendors and their capabilities and recommends supplementing carrier in-house special investigative units with a data-driven tactics, paired with insights and analysis from artificial intelligence. This combination will make it possible for carriers to thwart potential fraud schemes instead of having to defend against them during or after the claims process. I.I.I. CEO Sean Kevelighan cited the report in his testimony August 3, 2017, to a U.S. Senate subcommittee on insurance fraud. Full Report

This report from Fitch Ratings found that cyber insurance direct written premium volume for the property/casualty (P/C) industry grew by 35 percent in 2016 to $1.35 billion. For the second year in 2016, annual P/C insurer statutory financial statements include the Cybersecurity and Identity Theft Insurance Coverage Supplement, which provides insights on cyber underwriting activity and performance for insurers. Fitch notes that the $1.35 billion figure likely underestimates the industry's cyber premium exposure, as there are inherent challenges to breaking out cyber-related premium from other coverages in multi-line coverage products. The industry statutory direct loss ratio for standalone cyber insurance improved in 2016 to 45 percent from 50 percent a year earlier. However, the ultimate profitability of the P/C industry's cyber insurance efforts will take some time to assess as the market matures and future cyber-related loss events emerge. The largest cyber insurance writers are American International Group, Inc., XL Group Ltd, and Chubb Limited. The report is available at www.fitchratings.com.

This Governors Highway Safety Association (GSHA) report, created with a grant from State Farm Mutual Automobile Insurance Co., found that in 2015, cycling deaths rose 12.2 percent to 818, outpacing the rise in overall traffic fatalities. The average age of bicycle riders killed in collisions in 2015 was 45. Alcohol was a factor in 37 percent of fatal bike crashes, with bike riders doing the drinking in 22 percent of those cases. Distracted driving was blamed for 76 cyclist deaths in 2015. More than half of those killed were not wearing helmets. The report estimates that 45,000 cyclists were injured in collisions with vehicles in 2015, and suggests that a number of accidents may go unreported. The GSHA recommends more clearly defined bike lanes that separate cyclists from cars, and traffic signals with green lights specifically designated for cyclists. The report also urges states to include cycling safety programs in their highway safety plans. Full report.

This report contains the results of a Pew Research Center survey of people around the world that asks them to identify what they consider to be the top threats to national security. While the level and focus of concern varies by region and country, ISIS and climate change clearly emerge as the most frequently cited security risks in the 38 countries polled. Cyberattacks from other countries and the condition of the global economy tied for third place. Cyberattacks are the top concern in Japan and second-highest concern in places such as the U.S., Germany and the UK, where there have been several high-profile attacks of this type in recent months. Full report