Latest Studies

Helping Consumers Understand the Value of Cyber Insurance
Insurance Information Institute and J.D. Power;
October 01, 2018

More than four out of five American consumers who own connected devices either lack insurance to protect them from cyberthreats or do not know if they are covered, according to the Insurance Information Institute and J.D. Power 2018 Consumer Cyber Insurance and Security Spotlight Survey ℠. The survey further shows that as more people choose to expose their personal information on digital platforms, insurance professionals can play a prominent role in educating consumers about cyberrisk by dispelling misperceptions about the cost of protection by demonstrating the relatively inexpensive and valuable coverage that is available to them. Full report

Small business, big risk: Lack of cyber insurance is a serious threat
Insurance Information Institute and J.D. Power;
October 18, 2018

Cyber incidents hit one of every 10 U.S. small businesses last year, yet only 31 percent of them have cyber insurance, according to the Insurance Information Institute (I.I.I.) and J.D. Power 2018 Commercial Cyber Insurance and Security Spotlight Survey ℠. Ten percent of the small businesses surveyed had one or more cyber incidents in 2017, resulting in a typical loss of $188,400, an increase of $73,000 from the year before. The survey examines business perceptions and reactions of cyberrisk; data breaches and how insurance helps; the current state of cyber insurance among commercial insureds; the potential for growth in the cyber insurance market; and current insurance offerings for cyber coverage. Full report

Insurtech entering its second wave. Investment focus shifting from new startups to more established innovators
Deloitte Center for Financial Services;
October 10, 2018

Deloitte’s analysis of insurtech financing deals over the past 18 months found that the insurance industry has started channeling investments into proven entities rather than spreading their money across many new insurtechs that are just getting off the ground. In the first half of 2018 Insurtech startup activity came to a virtual standstill with only four launches. The downward trend began in 2017 with the launch of only 88 insurtechs, which is half the number recorded in both 2015 and 2016. This is in line with the trend identified by Deloitte’s broader investment report in 2017. Full report

2018 U.S. auto claims satisfaction study
J.D. Power;
October 25, 2018

Automobile insurers are achieving high levels of customer satisfaction when handling claims, according to J.D. Power’s annual claims satisfaction survey. Improvements were found across the board and the gap between the highest- and lowest-ranking insurers shrank to just 70 points, the smallest that gap since the study’s inception. The study notes that insurers are struggling to transition claimants to digital claims reporting solutions and fully integrate the process into their overall digital efforts. The use of mobile apps in the estimation process, which allows claimants to submit photos or videos of their damaged vehicle directly to their insurer, is growing in popularity, with 42 percent of claimants using the technology. When insurers use those photos or videos, overall satisfaction surges to 871. When they do not use the photos or videos and still need to send an adjuster, overall satisfaction falls 29 points to 842. Currently, insurers rely on claimant-submitted photos and videos 53 percent of the time they are submitted. News Release

Measuring Automated Vehicle Safety
Laura Fraade-Blanar et al.
Rand Corporation;
October 11, 2018

This study from Rand Corp. presents a framework for independent tests to assess the safety of autonomous vehicles and the approaches that could be used to introduce such tests. One key aspect of such tests would be trying to define and measure what the authors call “roadmanship,” a riff on good citizenship and driving behavior by robotic cars. The study was funded by Uber Technologies Inc.’s autonomous vehicle division. Full report

Olympic caliber cybersecurity
Cynthia Dion-Schwarz et al.
Rand Corporation;
January 01, 2018

The Olympic Games are an attractive target for cyberattackers and as dependence on technology increases with each successive Olympic Games so does the shift toward a cyberthreat environment. This report from Rand analyses the risk to the Tokyo 2020 Games and offers a series of policy options to guide planners and other stakeholders in addressing them. There have been no successful large-scale, high-impact attacks on prior Olympic Games and experiences from these and other international events offer potential lessons for Tokyo 2020 planners. A key characteristic of past Olympic cybersecurity planning efforts has been coordination and collaboration among a range of stakeholders, including the private sector. The six types of threat actors with the potential to pose a risk to the Tokyo 2020 Games were identified as: cybercriminals, insider threats, foreign intelligence services, hacktivists, cyberterrorists, and ticket scalpers. Motivations vary, but profit, ideology, and revenge capture the motivations for most attacks. Foreign intelligence services and other state-sponsored assailants rank at the top in terms of sophistication and level of risk to the games. Full Report

87 percent of firms see untrained staff as greatest cyberrisk
Willis Towers Watson News Release;
October 16, 2018

Most executives (87 percent) see untrained staff as the greatest cyberrisk to their business, according to a new survey. The fact that staff training is one of the categories to have made the least progress when measured against the National Institute of Standards and Technology (NIST) cybersecurity framework exacerbates this problem. The survey found that a company’s threat perception varied based on the firm’s cybersecurity maturity. For example, cybersecurity leaders tend to focus more on “Hacktivists” and malicious insider threats. Cybersecurity beginners spend more time worrying about external threats such as partners, vendors, and suppliers. When it comes to cyber resilience, or post-cyber incident processes, cybersecurity leaders invest more in cyber resilience versus their beginner counterparts. The survey was conducted by the Cybersecurity Imperative, a program produced by independent researcher, ESI ThoughtLab, Willis Towers Watson and other organizations specialized in cybersecurity and risk management. News Release.

Commercial lines insurtech: A pathway to digital
Peter Braad Olesen et al.
McKinsey and Company;
October 01, 2018

Commercial insurance executives are advised to see insurtechs as a catalyst for digitization rather than as a disruptive threat. Although commercial insurance executives are aware of the benefits of digital, the industry has been slow to make use of the technology because underwriting and claims processes are complicated and need human interaction and judgment. Some transactions low in volume require careful attention, so the transition from legacy IT systems is complex and demands large resources. While insurtechs have gained market share at certain points in the value chain in personal lines, these startups lack the scale and expertise necessary to be successful in commercial lines. However, as the movement toward digital gains momentum, executives should identify insurtechs that can be of strategic value and arrange for collaborations that yield new, tech-enabled approaches and expedite the digitization of their operations. Full report

CompScope™ Medical Benchmarks, 19th Edition
Sharon Beltman et al.
Workers Compensation Research Institute;
October 15, 2018

Medical costs per claim and the components in 18 state workers’ compensation systems are analyzed in depth in a new series of studies, released by the Workers Compensation Research Institute (WCRI). The studies are intended to help policymakers and others benchmark state system performance as well as provide a baseline for identifying important trends, and tracking changes over time in response to workers’ compensation reforms. The reports examine how medical payments and care have changed from 2011 to 2016. Claims with experience through 2017 for injuries up to and including 2016 were analyzed. The 18 states in the study are Arkansas, California, Florida, Georgia, Illinois, Indiana, Iowa, Louisiana, Massachusetts, Michigan, Minnesota, New Jersey, North Carolina, Pennsylvania, Tennessee, Texas, Virginia, and Wisconsin. There are individual reports for every state except Arkansas and Iowa. To download copies of the studies, visit WCRI.

The Journey of African-American Insurance Professionals: Past and Present
September 01, 2018

African-Americans are woefully underrepresented in leadership roles in the insurance industry, and this study, commissioned by Marsh, examines the challenges to career growth. African-American survey participants identified both overt and subtle racial bias in hiring, promotions and new assignments. A majority (70 percent) of respondents said they either strongly or somewhat agreed that the obstacles for African Americans were greater than for other minority groups. The primary barriers to entry into the insurance industry for African Americans were cited as lack of exposure to the industry and lack of networks. While race is an important factor in pursuing or being recruited to the insurance industry, more important is the absence of information about career opportunities through formal or informal networks, college career placement offices, or the accessibility of African American insurance professionals. Survey participants were overwhelmingly positive in their view of the insurance industry as a career choice, however, with 94 percent saying that they would encourage other African Americans to pursue an insurance industry career. Full report

2018 side business survey
The Hartford;
September 25, 2018

A survey from The Hartford found that 25 percent of Americans (about 57 million people) own a side business. Most side business owners have full-time jobs and the primary reason for starting their business was financially motivated (61 percent) as opposed those who are pursuing a passion (9 percent). Only 12 percent of those surveyed have purchased insurance for their side business and most don’t think they need it. The top three reasons cited for why they do not purchase insurance include: do not need business insurance (44 percent); business is too small to warrant buying insurance (18 percent); and protected by current home or auto insurance (11 percent). Full report

Costs and Compensation of the U.S. Tort System
U.S. Chamber Institute for Legal Reform;
October 24, 2018

This study looks at the total cost of torts paid in the United States tort system in 2016, using data on liability insurance premiums and estimates of the liability exposure of businesses and individuals that are uninsured or self-insured. It found that in 2016, the total costs and compensation in the system amounted to $429 billion. That figure was equivalent to 2.3 percent of U.S. gross domestic product, or $3,329 dollars per household. Only 57 percent of the money spent in the tort system goes to plaintiff compensation, before contingency fees are subtracted. Tort costs vary widely from state to state, ranging from just over $2,000 per household in the least expensive states like Maine and South Dakota, to more than $6,000 in New York. Full report

Insurance agency M&A activity continues at ‘impressive’ level: OPTIS
Insurance Journal;
October 12, 2018

According to OPTIS Partners’ M&A database, there were 463 announced insurance agency mergers and acquisitions during the first three quarters of the year, the second-highest nine-month total. Only 2017 totals were higher, with 466 transactions reported. The OPTIS Partners report of U.S. and Canada deals breaks down buyers into four groups: private equity-backed/hybrid brokers; privately held brokers; publicly held brokers; and all others. Private equity/hybrid buyers continue to lead all buyer groups with more than 65 percent of the total transactions for the quarter. Sales of property/casualty (P/C) agencies continue to dominate the seller category, with 250 announced transactions, followed by employee benefits agencies (114 sales), P/C/benefits brokers (56 deals), and all others (43 transactions). Full text