Latest Studies

Triple-I financial analysis of P/C insurer performance in 2019
Dr. Steven Weisbart
Triple-I special report;
May 07, 2020

This report by Triple-I's chief economist is based on ISO/Verisk's property/casualty (P/C) insurer financial data for 2019. The year was characterized by relatively low catastrophe losses, which cannot be counted on to recur on a regular basis. Net income after taxes for the year was $61.4 billion, and the combined ratio for 2019 was 98.9, slightly better than the 99.2 in 2018. Industry surplus attained its highest-ever level--$847.8 billion. This was driven largely by unrealized capital gains from a soaring stock market in the second, third, and fourth quarters of the year and declining interest rates. Direct Premium Written (DPW) grew by 5.6 percent in 2018 and by 5.2 percent in 2019. This means that DPW grew at roughly the same rate as the U.S. economy in 2018 (5.4 percent in current dollars) and at a faster rate than the economy in 2019, which grew by 4.1 percent. However, premium comparisons of net premium written (NPW) and net premium earned (NPE) growth in 2019 vs. 2018 are distorted by changes in reinsurance practices in early 2018 that are attributable to the major tax legislation adopted in December 2017. The effect of these changes was to raise calculated NPW and NPE growth rates for 2018 and, by comparing to an inflated base year, lessen the growth rates for 2019. To overcome this, ISO calculated the average annual growth rates for 2017 to 2019. Full report


Severe convective storms. Evolving risks call for innovation to reduce costs, drive resilience
Jeff Dunsavage
Insurance Information Institute (Triple-I) white paper;
May 07, 2020

Severe convective storms, which include thunderstorms, tornadoes and hail, are among the most common and damaging natural catastrophes in the United States. These storms were the costliest peril for insurers in 2019. The start of this year's convective storm season coincided with the shutdown of much of the U.S. economy due to the coronavirus pandemic, potentially complicating disaster response and claims handling as the season-already shaping up to be the deadliest in eight years-continues. Population growth and economic development have also contributed to increased losses, with research suggesting that the geography, frequency and intensity of these storms also may be changing. This paper examines these trends and how insurers, risk managers, individuals and businesses are responding to mitigate the risks and improve community resilience. Full report


Inflation and the P/C insurance industry
Dr. Steven Weisbart
Triple-I special report;
May 26, 2020

Measuring and forecasting inflation is important in setting premiums and anticipating claims. Historically, recessions tend to drive prices down, but that's not necessarily true for insurance. This presentation by Triple-I Chief Economist Dr. Steven Weisbart looks at insurance prices and the forces that affect them. Full presentation


NCCI issues State of the Line report at AIS virtual event
Cristine Pike
National Council on Compensation Insurance (NCCI);
May 12, 2020

On May 12 NCCI reported its financial results during its annual State of the Line report at its first virtual Annual Issues Symposium (AIS). For Calendar-Year 2019 the combined ratio for workers compensation insurance was 85 percent for private carriers--the sixth consecutive year that the line of business posted an underwriting gain. During the presentation, NCCI Chief Actuary Donna Glenn said the workers compensation industry had another good year in 2019, pointing out that declining claim frequency for the year, a strong industry reserve position and favorable metrics in the residual market characterized the health of the workers compensation line of business. She and NCCI President and CEO Bill Donnell pointed out that the workers compensation system is facing significant uncertainty because of the COIVID-19 pandemic and resulting economic fallout but expressed confidence that the system will respond effectively. Full text


Trade war and pandemic to accelerate global supply chain restructuring
Clarence Wong
Swiss Re Institute;
May 05, 2020

This report concludes that the coronavirus pandemic will accelerate changes to the global supply chain already in motion due to the US-China trade war, and subsequently spur new insurance opportunities. Eighty-two percent of respondents to a recent survey of 600 multinational companies across Asia and 93 percent of Chinese companies said they are changing their supply chains because of the trade war. The COVID-19 crisis will accelerate these changes and gives rise to new concerns such as supply chain disruptions. Relocations and building of parallel supply chains will entail construction of new business facilities in different locations. Coupled with increasing awareness of the risk of supply chain disruption, this will generate new demand across credit, surety, engineering, property and especially for business interruption insurance (BI) insurance. The report estimates a 5 to 10 percent increase in demand for property and engineering insurance in new host markets in emerging Asia. Demand for BI coverage could rise 10 to 20 percent over the medium-term. Full report


COVID-19 Risks Outlook: A Preliminary Mapping and its Implications
World Economic Forum;
May 19, 2020

The world's top risk experts expect that a prolonged global recession is likely due to the coronavirus pandemic, according to this report. The fundamental unpreparedness of nations for pandemics is clear and shortcomings are also obvious in economic safety nets and international cooperation, with 500 million people at risk of becoming impoverished. The report is organized around discussions of four primary areas of concern: economic shifts and emerging risks from structural change; sustainability setbacks; societal anxieties; and technology dependence. The report also reveals the results of a survey of nearly 350 senior risk professionals. Two-thirds of the respondents identified prolonged global recession as their leading concern, with other top concerns including: bankruptcies; industry consolidation; inability to recover post-pandemic; and a disruption of supply chains. The report was compiled by the World Economic Forum's Global Risks Advisory Board in cooperation with Marsh & McLennan Companies, Inc. and Zurich Insurance Group. Full report


Storms surging: Building resilience in extreme weather
Allianz;
May 01, 2020

Noting that the intensity, frequency, and duration of North Atlantic hurricanes and the frequency of Category 4 and 5 hurricanes have all increased since the early 1980s the report states that hurricane-associated flooding and rainfall rates are projected to rise in 2020. Multiple storm and flood damage mitigation techniques are discussed, including seawalls, sand scaffolding and artificial trees. The use of drones and satellite imagery to develop a new flood risk survey based on topographic data from drones used to model flood and drainage behavior on construction sites is also mentioned. Full report


Wildfire risk insight: Analysis of property exposure and wildfire damage 2019
Verisk;
May 27, 2020

Wildfire risks have increased worldwide and the assessment of wildfire risk for property insurance is complex and depends on many fields of expertise, such as large-scale data and analytics and scientific measurements of wildland fuels. The report provides a statistical snapshot of the risk report for California from Fireline, which uses advanced remote sensing and digital mapping technology to assess fuel, slope and road access and determine wildfire hazard scores. The impact of 2019 wildfires is summarized, and the article concludes by listing four questions insurers should consider in order to accurately underwrite properties for wildfire risks. Full report


Verizon Business 2020 Data Breach Investigations Report
Gabriel Bassett et al.

May 18, 2020

According to the report, money has become the top focus for cyberbreaches, surpassing spying. The annual study of cybercrimes, which utilized data from more than 32,000 incidents and nearly 4,000 confirmed break-ins in 81 countries, found that approximately 86 percent of breaches were financially motivated. Additionally, breaches on web and cloud applications rose to 43 percent, double the previous year. Credential theft, phishing and compromising business emails caused 67 percent of the cyberattacks. Full report