Insurance News Digest 3-27-2025

For the first time since 2020 the P&C insurance industry returns to profitability!

March 27, 2025

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We deliver the latest insights and developments shaping insurance, focused on insights and opportunities for those who serve the insurance industry. Stay informed on how emerging trends like current events, regulatory changes, AI, and innovative products can help you better serve your clients and partners and drive business growth.

Top 10 Articles Of The Week

The U.S. property and casualty insurance industry achieved a significant turnaround in 2024, recording a $24.8 billion underwriting gain—the first since 2020. This improvement is attributed to strong premium growth and enhanced loss control measures.

2. Active Atlantic Hurricane Season Predicted for 2025

AccuWeather forecasts an unusually active Atlantic hurricane season for 2025, with 13 to 18 named storms, including up to 10 hurricanes. Of these, three to five may escalate to major hurricanes, potentially impacting the U.S.

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Updated fire hazard maps in California have significantly expanded high-risk zones, now encompassing areas home to approximately 3.7 million residents. This increase may influence building codes, insurance requirements, and real estate disclosures across the state.

Home insurance startup Kin Insurance is diversifying into the auto insurance market, having filed new personal auto insurance programs in Florida and Texas. This move follows Kin's recent ventures into the mortgage sector and agency acquisitions.

After a period of decline, the insurtech industry shows signs of revitalization, driven largely by advancements in artificial intelligence. Emerging startups are introducing innovative solutions aimed at enhancing efficiency and transforming traditional insurance processes.

The insurance sector is navigating increased costs due to recent tariffs and trade disputes initiated by the White House, leading to a more expensive operating environment across industries. Insurers are incorporating geopolitical risk assessments and supply chain exposure metrics into their underwriting models to better manage these challenges.

Insurers are increasingly utilizing artificial intelligence to predict and mitigate soaring losses from climate-driven catastrophes, including wildfires, hurricanes, and floods. AI models analyze vast datasets to provide more accurate property-level risk assessments, aiding in premium setting and capital allocation.

Progressive subsidiaries have agreed to a $13.8 million settlement in a New York class action lawsuit alleging the undervaluation of total loss vehicle claims. The suit claimed that valuation adjustments allowed the insurer to reduce claim payouts unfairly.

Proposed tariffs on imports from Canada and Mexico are expected to raise auto insurance premiums due to higher costs for vehicle repairs and parts. Studies project a nationwide premium increase of 8% in 2025, with Texas drivers potentially paying nearly $3,000 for full coverage.

The U.S. Supreme Court will hear a case challenging the Affordable Care Act's requirement for insurers to cover certain preventive health services at no cost. The outcome could impact coverage for services like cancer screenings and HIV prevention medications.

Focus: Quarter in Review

The insurance industry's focus on pricing over service has led to a disconnect with consumers, resulting in misunderstandings about coverage and dissatisfaction. Enhancing transparency and prioritizing customer service are essential steps to rebuild trust and improve the industry's reputation.

A recent ValuePenguin poll indicates that claims handling issues accounted for 62.5% of all insurance complaints in 2024. Predominant concerns include delays (22.2%) and unsatisfactory settlements (12.2%). The data underscores the necessity for insurers to enhance their claims processes to boost customer satisfaction.

Liberty Mutual Insurance plans to discontinue the Safeco brand in 2026, consolidating all personal lines products under the Liberty Mutual name. This strategic move aims to streamline operations and enhance brand consistency across distribution channels.

Lemonade's Chief Claims Officer, Sean Burgess, shares insights into how the company has integrated AI into its claims processes since its founding in 2015. He discusses the benefits of AI in automating claims, enhancing customer experience, and the company's commitment to adopting emerging technologies.

A report by Lloyd's highlights that severe space weather events, such as solar storms, could potentially lead to global economic losses amounting to $24 trillion. The insurance industry is urged to consider these risks in their models to better prepare for such rare but impactful events.

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