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Insurance Professionals Provide Insights on State of the Industry, Employment Trends and Technology

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Insurance Professionals Provide Insights on State of the Industry, Employment Trends and Technology

Vertafore, the leader in modern insurance technology, today released its annual insurance workforce survey report, titled “The Insurance Agency Workforce: Evolving into the next normal.”

Based on responses from more than 1,300 insurance professionals, the report includes insights on how independent agencies and MGAs responded to the Great Resignation, what attracts individuals to the insurance industry, factors that can keep employees in seat and how workers feel their agency is responding to technology modernization.

Findings from Vertafore’s fifth annual report include:

  • One in five insurance professionals reported changing companies in 2021, and financial considerations such as salary and bonuses were key drivers.
  • In the face of staffing challenges, nearly 80% of agency owners and principals reported making changes to retain their employees, including increasing compensation, offering flexible schedules and adding remote work options.
  • As in previous years, most respondents (78%) would recommend a career in insurance. However, that number dipped by 7% compared to 2020.
  • Women made up more than 60% of all respondents but comprised less than 30% of those who identified as an owner or principal.
  • While three-quarters of survey-takers felt InsurTech has had a positive impact on their agency in the past two years, more than half also said their agency could do a better job staying up-to-date with tech advances.
  • Insurance professionals want more time in their day to work with clients and identified automation and client digital engagement tools as the two most significant modernization trends for agency growth.

Survey responses show that the insurance industry is populated with people who are committed to their clients and community. While insurance was not immune to the Great Resignation, many agencies have been proactive about making changes to keep their talent. And insurance professionals are optimistic about technology advancements, but also feel their agencies have room to improve.

Download the 2022 report, “The Insurance Agency Workforce: Evolving into the next normal,” to see all findings.

Learn more about Vertafore at vertafore.com.

NAIC Membership Adopts Framework To Address Long-Term Care Insurance Rate Approvals

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NAIC Membership Adopts Framework To Address Long-Term Care Insurance Rate Approvals

On April 8, during the Spring National Meeting in Kansas City, Missouri, the National Association of Insurance Commissioners’ members accepted the Long-Term Care Insurance (LTCI) Multistate Actuarial (MSA) Review Framework. The MSA Framework provides for a more consistent state-based approach when evaluating LTCI rate increase requests by insurers. Key objectives of the Framework are to educate and advise states on the appropriateness of actuarially based rates for policyholders’ benefits, narrowing rate review practices and reducing inequities among policyholders.

The MSA Framework describes the operational and actuarial details of how an MSA team will conduct a rate filing review and capture its analysis and recommendations in a written rate advisory report. The voluntary MSA review process laid out in the Framework facilitates greater coordination and information sharing, leverages collective LTCI actuarial expertise, and aims to improve the timeliness of rate decisions.

“The Long-Term Care Insurance Task Force has diligently led on its key goal of developing an MSA process to support, assist, and aid insurance departments in this challenging market. It is critical that consumers have long-term care policies that are offered from solvent carriers. I want to especially commend Virginia Commissioner Scott White and Colorado Commissioner Michael Conway for their leadership and thank the many other state insurance regulators that contributed to the MSA Framework,” said NAIC President and Director of the Idaho Department of Insurance Dean L. Cameron.

“The MSA Framework is a monumental step forward for the NAIC, and I anticipate continued improvements in the states’ capabilities and timeliness of rate increase considerations. While much work remains to be done, I am optimistic our state-based solution will further help states balance consumer protections and insurer solvency,” said Virginia Insurance Commissioner Scott White, chair of the Long-Term Care Insurance (EX) Task Force.

The Long-Term Care Insurance (EX) Task Force commenced its work in May 2019. An Ad Hoc Drafting Group, consisting of representatives from Colorado, Connecticut, Minnesota, Nebraska, Texas, Virginia, and Washington, commenced its drafting work in May 2020.

Moving forward, the LTCI Multistate Rate Review Subgroup, chaired by Colorado Insurance Commissioner Michael Conway, will focus on implementing the Framework, which is expected to be fully operational by September 2022. The Subgroup will continue efforts to improve the functionality of the MSA review process through feedback from state insurance departments and insurers in 2022 and beyond.

New Self-Paced Courses Intro To Commercial/Personal Lines, Flood, Ethics, Workers Compensation

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New Self-Paced Courses Intro To Commercial/Personal Lines, Flood, Ethics, Workers Compensation

The National Alliance for Insurance Education & Research has launched five self-paced insurance license renewal and introductory classes on the topics of Ethics, NFIP Flood Exposures, Workers Compensation, and Personal Lines and Commercial lines. Each self-paced course provides learners with a highly engaging and seamless online experience.

The newly developed Self-Paced Online Courses provide participants ultimate flexibility, efficiency, and a low-pressure way to build knowledge and meet license renewal requirements at their own pace. Self-paced courses are completed within a 60-day window during which learners can save their progress, review understanding of the curriculum, and access an information kiosk and learning resources prior to taking the exam.

Course Details

The Introduction to Personal Lines and Commercial Lines courses are fantastic learning resources for Agency Owners & Managers in the middle of hiring season or needing to expand their teams. The self-paced courses can increase new hire engagement, reduce E&O exposures, and can be used to onboard employees. Individuals who are new to their insurance careers can also benefit from these low-cost courses that help them understand insurance fundamentals, build trust with clients, and expand their product knowledge quickly.

Self-paced Flood, Ethics, and Workers Compensation courses provide up to four hours of State CE and satisfy insurance license renewal requirements. Completion of all self-administered quizzes and a proctored exam are required to earn credit.

Beth Benhart, Director of Instructional Design shared this about the new courses:

“Over the last two years, The National Alliance has undertaken an initiative to refresh our self-paced library! Along with a thorough curriculum review for each course, we have cleaned up the user experience for our on-demand offerings. Our new courses are easy to navigate and rich with high-resolution imagery, animations, and custom multimedia developed by our production team. We have also incorporated accessibility elements like closed captioning to meet the needs of all our participants.”

New Data Finds Phishing Attacks Could Impact 82% of the Largest Insurance Carriers

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New Data Finds Phishing Attacks Could Impact 82% of the Largest Insurance Carriers

Black Kite, a leader in third-party cyber risk intelligence, released A Fight for Coverage: Cyber Insurance Risk in 2022, a report that examines rising cyber risk concerns and ransomware susceptibility in the insurance sector. The most notable takeaway: nearly 20% of the top 99 insurance carriers have a high susceptibility to ransomware.

“The cyber insurance landscape has never been more volatile. Digital supply chains are quickly expanding – putting companies at greater risk for third-party data breaches and ransomware attacks,” said Bob Maley, CSO of Black Kite. “Protecting your business requires thoroughly assessing and continuously monitoring the cyber health of your digital network.”

Software supply chain attacks have increased sharply – up 300% in 2022 since 2021. Forrester predicts 60% of security incidents in 2022 will result from third-party incidents. In the insurance market, third-party vendors rarely meet the insurance requirements established by the companies that hire them.

Black Kite Research analyzed the top 99 insurance companies by net premiums written to better understand their cyber posture and the impact of increasing risk levels. Key findings include:

  • More than half of the largest insurance carriers are 3x more likely to experience a cyber breach than those with ‘A’ ratings.
  • 1 in 5 carriers are above the critical ransomware threshold of a 0.6 rating, indicating a high level of ransomware susceptibility.
  • 82% of insurance companies analyzed are susceptible to a phishing attack.
  • Software vendors are the most common source of supply chain attacks, accounting for 25% of all third-party incidents in 2021.

The largest ransom paid by an organization to date was by an insurance company in 2021, totaling just under $40 million. A ripple effect caused higher insurance premiums, reputational damage, and business interruptions. As a result, 100% of underwriters now rank ransomware and supply chain attacks among their top three threats.

“Eighty-five percent of underwriters believe companies should focus on strengthening their cyber security,” said Jeffrey Wheatman, former Gartner analyst and Black Kite’s new Senior Vice President and Cyber Risk Evangelist (SVP CRE). “Insurers are consistently blindsided with risk events that form deep in their digital supply chains. Black Kite’s latest research is a proof point that action needs to be taken to assess third-party risk and plan accordingly.”

Black Kite provides third-party risk intelligence from a technical, financial, and compliance perspective to eliminate false positives and ensure a holistic approach to vendor risk management. In addition to A Fight for Coverage: Cyber Insurance Risk in 2022, Black Kite issues an annual Third-Party Breach Report as well as risk assessment reports on the automotive manufacturing, energy, and federal sectors.

To learn more about Black Kite, visit https://blackkite.com/

A Tale of Two Pandemics: Younger Americans Feeling Financially at Risk While Retirees Emerge Resilient

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A Tale of Two Pandemics: Younger Americans Feeling Financially at Risk While Retirees Emerge Resilient

Key findings:

  • 63% of non-retirees fear running out of money more than death, versus 46% of retired respondents
  • 68% of pre-retirees feel confident about being able to financially support their future goals, down from 75% in 2021
  • 42% of retirees said they retired earlier than expected, down from 68% in 2021; fewer did so due to healthcare issues (26% down from 33% in 2021) or unexpected job loss (15% down from 22% in 2021)
  • 54% of non-retirees admitted to spending too much money on non-necessities during the pandemic

As the United States passes the two-year mark of the COVID-19 pandemic, it’s becoming increasingly clear that there is a significant gap in the financial experience of younger Americans and their retired counterparts. Nearly two-thirds (63%) of non-retirees said they fear running out of money more than death, versus less than half (46%) of retired respondents, according to the new 2022 Retirement Risk Readiness Study* from Allianz Life Insurance Company of North America (Allianz Life).

Americans who have yet to retire and are still balancing careers, family and saving are feeling more worried about their financial future than they did at this point last year, and are significantly less confident than current retirees. This is particularly true for people who are 10 or more years from retirement – pre-retirees.

Fewer than seven in 10 (68%) pre-retirees said they feel confident in being able to financially support their future goals in the latest survey. This is down from 2021, when 75% of pre-retirees said they had confidence in financially supporting those goals. Meanwhile, 89% of retired respondents said they feel confident about funding their future financial goals.

Retired Americans are less worried than pre-retirees about a number of retirement concerns, including:

  • Having enough money to do all the things they want in retirement (28% versus 64% of pre-retirees)
  • The cost of living increasing and limiting their ability to afford necessities (33% versus 69% of pre-retirees)
  • Running out of money before they die (31% versus 65% of pre-retirees)
  • At the same time, retirees are more relaxed than they were last year about various retirement risks, including:
  • Market downturns (47%, down from 65% in 2021)
  • Healthcare costs (43%, down from 73% in 2021)
  • The rising cost of living preventing them from enjoying retirement (41%, down from 59% in 2021).

While an ongoing Great Resignation makes the headlines, only 42% of retirees in the survey said they retired earlier than expected, down significantly from the 68% last year. Notably, fewer said they retired early due to unexpected issues and a higher percentage were able to retire on their own terms:

  • Healthcare issues (26%, down from 33% in 2021)
  • Unexpected job loss (15%, down from 22% in 2021)
  • Feeling financially ready (18%, up from 9% in 2021)
  • Wanting to have fun while they still can (12%, up from 7% in 2021)

“While it’s encouraging that many retired Americans were able to weather the financial storm caused by the pandemic, it’s equally concerning that so many pre-retirees did not escape unscathed,” said Kelly LaVigne, vice president of Consumer Insights, Allianz Life. “The reality is, financial aftershocks from the pandemic are still ongoing, so both groups need to make sure they are taking the necessary steps to mitigate risks to their retirement security.”

Pandemic frustrations causing financial fatigue

The 2022 Retirement Risk Readiness Study surveyed three categories of Americans to get different perspectives on retirement: pre-retirees (those 10 years or more from retirement); near-retirees (those within 10 years of retirement); and those who are already retired. In addition to highlighting the disparity in retirement confidence among Americans, the 2022 study identified how the pandemic has caused financial fatigue, potentially putting non-retirees’ financial future at risk.

During the pandemic, more than one-third (34%) of non-retired respondents said they took money out of investment accounts (401K, IRA) in favor of cash, and 39% said they reduced the amount of money they were putting into retirement accounts. More than half (54%) said they were spending too much money on non-necessities during the pandemic, with the majority saying they regret the decision.

Despite these actions, non-retired respondents do have a desire to improve their financial decision-making, particularly those who are further from retirement. Nearly half of pre-retirees (48%) said they would like to make a formal financial plan with a financial professional. The same amount said they are interested in purchasing a financial product that provides a guaranteed source of retirement income.

Great Resignation still in motion

Many Americans are considering a job change in the near future, which could have a severe impact on their retirement security.

More than one-quarter of pre-retirees said they are likely to take a new job this year, either with a new company (31%) or going into business for themselves (26%). Surprisingly, an even higher percentage of near-retirees are planning an employment change in 2022 (33% with a new company and 32% switching to self-employment).

As expected, these potential job changes come with a significant amount of worry related to both short-and long-term financial planning. Nearly six in 10 non-retired respondents said they are worried about how a change in employment will affect a number of spending/saving topics, including: paying for necessities like housing and food (57%); cutting back on non-essentials like entertainment (57%); reducing the amount they can save for retirement (60%); and completely stopping savings for retirement (56%).

“With the pandemic driving many Americans to consider a disruption to their current employment status, it’s important to remember how that can also have a significant effect on retirement planning far into the future,” said LaVigne. “During these periods of uncertainty, it can be beneficial to work with a financial professional so you can make sure all of the bases are covered before making any drastic changes.”

Inflation concerns persist

One concern that continues to plague both retired and non-retired Americans is how rising costs will affect their finances. Nearly eight in 10 (78%) expect inflation to get worse over the next 12 months. About six in 10 people (59%) who are still in the workforce said their income is not keeping up with the rising cost of living, and 40% of retirees said their retirement income is not keeping pace.

Non-retirees are particularly concerned about inflation affecting their ability to pay for necessities (57%), save as much for retirement as they should (66%), and make the retirement lifestyle they envisioned unobtainable (61%).

Although only about half (52%) of retirees said they have a plan to address the rising cost of living in retirement, non-retired Americans are feeling the most pain. In order to address these challenges, non-retirees noted they have done or expect to do the following:

  • Find a job that pays more – 53%
  • Reduce spending on necessities – 52%
  • Dip into savings to make ends meet – 49%
  • Stop or reduce education savings (among those with children) – 52%
  • Stop or reduce retirement savings – 45%

“Regardless of whether they are retired or still in the workforce, all Americans are challenged by inflation right now and need to develop strategies that ensure their income keeps up with rising costs,” added LaVigne. “While changes to spending habits can help in the short term, it’s important that people take measured steps, such as adding a source of guaranteed income that can help to protect their finances without sacrificing retirement security.”

 

*Allianz Life conducted an online survey, the 2022 Retirement Risk Readiness Study, in February 2022 with a nationally representative sample of 1,000 individuals age 25+ in the contiguous U.S. with an annual household income of $50k+ (single) / $75k+ (married/partnered) OR investable assets of $150k.

InsuranceNewsNet Launches New Network

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InsuranceNewsNet Launches New Network

In these times when expertise is elusive, InsuranceNewsNet, a pioneer in insurance news and marketing, is refining its two decades of innovation into a new platform of services designed to convert deep institutional knowledge into client success – the Insurance & Financial Media Network (IFMN).

IFMN combines InsuranceNewsNet, AdvisorNews, First Class Data and Ignite Marketing under one umbrella to provide deeper market insight and seamless service to align with the company’s vision. The new organization features a fresh look with vibrant colors and logos and enhanced platforms that deliver services quickly and effectively.

The core components of IFMN have been tested by recessions, down markets and tumult since 1999, when InsuranceNewsNet entered a crowded insurance and financial information world with a clear advantage – the true perspective of readers and clients. Feldman is a third-generation insurance marketer who has always kept the ultimate reader and client in mind.

Over the coming year, the company will roll out an updated visual identity and new website experiences on its core platforms. What can readers and clients expect?

Ignite Marketing: Marketing that sparks excitement for brands and products, from a team that knows how to define clients’ audience and craft the right message to reach them. Ignite is the marketing team to call in when it’s time to get serious about elevating the game.

First Class Data: Inside intelligence for the edge that sellers need in this ultracompetitive environment. FCD consolidates the latest available data on an intuitive platform to access the right audience for products and services. No more “spraying and praying.”

InsuranceNewsNet: It all started with INN, the news that delivers what agents, advisors and brokers want, and that won’t change. After decades of winning awards, INN will continue to break news and then break down what it means to real people.

AdvisorNews: As the insurance and financial worlds merge, AdvisorNews is there to report on the latest trends in this rapidly changing space.

“We love times of significant change because of the opportunities they create,” Feldman said. “This reorganization allows us to help our partners prosper in this new world.”

To explore Insurance & Financial Media Network’s new identity, visit insurancefinancialmedia.com.

Founded in 1999, Insurance & Financial Media Network (IFMN) is dedicated to informing and educating financial professionals while helping to grow the industry through the most relevant news, trends, how-to’s, and insights available. From award-winning editorial and design to results-oriented marketing and strategy, everything we do is focused on helping agents and advisors run their practice and increase their bottom line. IFMN is headquartered in Camp Hill, PA and supported by its virtual workforce across the country.

Principal® Survey Reveals Retirement Confidence Gap Across Generations

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Principal® Survey Reveals Retirement Confidence Gap Across Generations

American workers of all generations put comfortable retirement among their top life goals, yet a large percentage are uncertain about how to plan for it, when to retire, and how they will pay for it, according to the latest Retirement Security Survey released today by retirement and investment leader Principal Financial Group®.

In a national survey of those with workplace retirement plans held by Principal®, 71% listed “living comfortably in retirement” as a top life goal along with good health and financial wellness. Unfortunately, less than half (49%) have confidence that their savings will be enough, and a further 55% don’t feel secure in their retirement planning.

“Time and again, Americans overwhelmingly say they want a comfortable retirement, and shifts in the past few years about how we work and think about work has not changed that,” said Sri Reddy, senior vice president, Retirement & Income Solutions at Principal. “But our research shows there is a lot of work to be done to help people feel more secure and confident in their planning. It’s our job to demonstrate how the right tools, resources, and education can help people remain calm through bouts of market volatility while still preparing for the future.”

Principal® Survey Reveals Retirement Confidence Gap Across Generations

The latest research gathers insights from workers, retirees, and plan sponsors about their experiences and views related to retirement planning and financial well-being. The findings reveal a wide, but not insurmountable gap between retirement saving goals and confidence levels in reaching the best outcomes. Key findings include:

Knowledge and retirement plan capabilities are key to boosting confidence. Fifty percent of workers of all generations are either unsure how much they should be saving for retirement, or know they are saving less than they should be to reach their goals. Workers see the top criteria for reaching retirement goals as: employer match-contributions (62%), a balanced investment portfolio (52%), and financial advice and guidance (51%).

Lack of confidence may be due to the changing nature of retirement. Historically, retirement timing in America was primarily driven by the age a person could collect Social Security and pension or defined benefit plan payments. Today, workers cite “when I’ve saved enough” or “when I cannot do the work any longer” as determining factors for retirement. Meanwhile, only 47% of workers are confident they have the knowledge to make good decisions with their retirement account ahead of a job change or retirement. That confidence level has dropped from 59% in Q1 2021.

Having a steady paycheck in retirement beyond Social Security is an elusive goal. The majority of workers lack confidence that Social Security will be available to them, with 64% citing it’s viability for them as a concern, including a whopping 73% of Gen Z workers. That said, only 30% created their retirement savings goal based on an estimated “income floor” in retirement (or what they need to cover monthly essential expenses), and 73% admit they lack knowledge of how to create income from savings.

“In a world where fewer Americans have pensions, securing a source of steady income beyond Social Security is not only smart, but can provide confidence for people to spend the money they’ve worked so hard to save without fear of running out,” Reddy said. “Identifying an ‘income floor’ in retirement is a great way for people to kickstart this process.”

On the plus side, the Principal survey of plan sponsors shows employer awareness of the need for stronger retirement plans and benefits. Findings include:

Employers, many in search of talent, are poised to bolster retirement planning and benefits. Just 39% of plan sponsors feel their employees are doing a good job preparing for retirement and a mere 15% feel their employees will have enough money saved. That said, they know offering a retirement plan is important for maintaining their workforce, with about half citing retention and attraction as a top reason to offer a plan, and 61% feeling it’s important for employees to participate.

Employers know there’s opportunity to do more. Over two-thirds (68%) of plan sponsors feel responsible for making a retirement plan available to employees. But 32% say they don’t do enough to encourage employees to increase their deferral savings percentage, and 33% feel they don’t do enough to encourage employees to start planning for income in retirement—two key areas for improvement.

To learn more about how workers, retirees, and plan sponsors are navigating retirement security today, visit Principal at this link.

Triple-I: U.S. Auto Insurers Seeing More Accidents, Higher Costs

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Triple-I: U.S. Auto Insurers Seeing More Accidents, Higher Costs

Personal auto insurance premiums have returned to pre-pandemic levels and existing trends are putting upward pressure on rates, according to the Insurance Information Institute (Triple-I).

“Auto insurers are seeing the frequency and severity of automobile accidents rise quickly as drivers return to the nation’s roadways,” said Sean Kevelighan, CEO, Triple-I.  “After these accidents occur, the claim payouts are higher due in part to the higher price of auto replacement parts.” The parts cost inflation has been exacerbated by pandemic-related supply chain and labor disruptions, according to a just-released Triple-I Issues Brief on personal auto insurance rates.

“Having examined recent auto insurance industry trends, Triple-I found auto premiums have not kept pace with inflation—especially when it comes to auto replacement part costs,” Kevelighan said.

For example, the combined ratio, the percentage of each premium dollar an insurer spends on claims and expenses, rose to nearly 100 percent in the personal auto insurance market nationwide in 2021.  In other words, U.S. auto insurers spent about a $1 on claims and expenses last year for every $1 these same insurers collected in premiums.

At the beginning of the COVID-19 pandemic in the spring of 2020, U.S. auto insurers soon thereafter cumulatively returned about $14 billon to policyholders in the form of cash refunds and account credits in anticipation of fewer accidents due to reduced driving. That was the case briefly, but the frequency and severity of auto accidents quickly grew, even with fewer cars on the road.

Auto accident fatalities increased as well, after a four-decade downward trend. In 2020, 38,824 deaths occurred on U.S. roads, the most since 2007, according to the National Highway Traffic Safety Administration (NHTSA). NHTSA noted in 45 percent of fatal crashes, the driver was engaged in at least one of the following risk behaviors: speeding, alcohol impairment, or not wearing a seat belt.

Individual auto insurance premium rates are calculated based on a range of factors, such as the vehicle’s make and model, the policyholder’s driving record, and the vehicle’s location, among others.  Yet an auto insurer’s claims payout experience in each state also is considered when regulators assess an insurer’s rate filing.

PIA and The PIA Partnership Unveil Winning@Cybersecurity Defense

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PIA and The PIA Partnership Unveil Winning@Cybersecurity Defense

The National Association of Professional Insurance Agents (PIA) and its carrier council The PIA Partnership have created Winning@Cybersecurity Defense to help agents understand cyber risks and act on them.

There is a heightened and growing concern about the full range of cyber risks, which have been increasing exponentially. Cyber perils outrank COVID-19 as the top global business risk in 2022 according to the Allianz Risk Barometer annual survey of CEOs, risk managers, brokers and insurance experts. Respondents to the 2022 NU/PIA Independent Agent Survey, when asked to rate their concerns about serving clients online, cited data security/privacy compliance as their top concern (64%).

“In many respects, cyberattacks are the pandemic of technology,” said PIA Chief Executive Officer (CEO) Mike Becker. “A cyberattack is lethal, destructive and can infect systems that are not protected. They can have devastating long-term effects, especially for small businesses. Ransomware, phishing, and data breaches can cost insurance agencies hundreds of thousands of dollars.

“It is critical that all business owners realize the magnitude of the threat and take action. That’s why PIA and The PIA Partnership created Winning@Cybersecurity Defense, a comprehensive program to help independent insurance agents protect themselves and fight back,” Becker said.

What is Winning@Cybersecurity Defense?

Winning@Cybersecurity Defense is a four-step comprehensive resource created to educate agents and their clients about the most common cyber dangers faced by small and mid-sized businesses as well as the business practices and insurance coverages that can reduce these risks. It also includes materials agents can share with their clients to help them understand their cyber exposure and the benefits of purchasing a cyber policy for their businesses.

Divided into four parts, agents can take a customized approach and tackle the sections in any order.

Cyber Risk A to Z introduces agents to the most common threats: fraudulent funds transfer, ransomware, social engineering, cyber business interruption, data breach and privacy, network security and website media liability. It includes examples and quizzes to test understanding.

Cyber Risk Insurance Protection provides information about what insurance covers, how to sell it, what questions to ask customers, and programs to consider.

Cyber Risk Assessment

One of the key steps for an agency is doing a detailed assessment of its own cyber risks. In partnership with long-time PIA advocate, Thomas H. Wetzel, agencies can obtain a low-cost cyber risk assessment designed specifically for them.

Cyber Resources for Your Agency

This section provides a variety of tools and vendors to help agents protect their agencies and customers. Featured are: custom assessments, security tips, employee training, password management, antivirus protection, business recovery plans, vendor management, having a security mindset and much more.

Comments From Agents

The development process for Winning@Cybersecurity Defense included three focus groups to discuss agent issues and concerns, as well as a series of beta tests. Feedback from agents guided program development. Comments from agents included:

“I’m scared to death of getting hacked. It could wipe out the business.”

“The risk is huge if it happens to you. We’ve had clients that have been breached, the costs have been astronomical. It’s important for people to really understand what can happen.”

“[Customers] hear stories about cyber breaches and social engineering, but it hasn’t happened to them. The industry needs to do a better job of highlighting the cyber claims.”

“I’ve seen a huge uptick in phishing. I mean they’re really good. They are really, really good. I mean, they design emails that look like they’re coming from my hometown. My staff is getting hit with these as well.”

Cyber risk is not a new topic for the PIA, which has been focused on cyber issues for a long time through its Cyber 101 program, originally launched in 2017. The new Winning@Cybersecurity Defense will replace the Cyber 101 program.

Learn More

To learn more about Winning@Cybersecurity Defense visit: www.pianational.org/cybersecurity.

About The PIA Partnership

The PIA Partnership is a joint effort of leading insurance carriers and PIA to develop hands-on tools for PIA members and agents appointed by Partnership carriers. To learn more about the PIA Partnership visit: www.thepiapartnership.com.

PIA would like to thank the PIA Partnership companies that helped to develop Winning@Cybersecurity Defense: Encompass Insurance, Erie Insurance, Liberty Mutual, Foremost, National General Insurance, Progressive Insurance, Selective Insurance Group, State Auto Insurance Companies, The Hanover Insurance Group, Travelers, and West Bend Mutual Insurance Company. Learn more about The PIA Partnership at www.ThePIAPartnership.com.

Property and Casualty Insurers See $5.6B Net Underwriting Loss in First Nine Months of 2021

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Property and Casualty Insurers See $5.6B Net Underwriting Loss in First Nine Months of 2021

Private U.S. property/casualty insurers saw a $5.6 billion net underwriting loss in the first nine months of 2021, as non-catastrophe losses returned to pre-pandemic levels, according to a report by Verisk (Nasdaq:VRSK), a leading global data analytics provider, and the American Property Casualty Insurance Association (APCIA).

Direct losses for personal auto liability increased 14.1% in nine months 2021 and the industry’s combined ratio—a critical measure of insurer profitability—worsened to 99.5%, from 98.8% a year earlier. While non-catastrophic losses were on the rise, insured catastrophe-related losses remained high. Both in 2020 and 2021, estimated nine-months net loss and loss adjustment expenses from catastrophes exceeded $48 billion.

Despite the underwriting loss, the industry saw an increase in net income after taxes to $42.1 billion in nine months 2021, from $35.2 billion a year earlier. This increase was fueled in part by premium growth and investment gains. Insurers’ overall profitability—as measured by their annualized rate of return on average policyholders’ surplus—rose to 6.0% in nine months 2021 from 5.5% a year earlier.

Overall net written premium growth accelerated to 9.4% in nine months 2021, from 2.9% the year prior, as the economy was on the path for recovery from the massive disruptions caused by COVID-19 in 2020.

“While catastrophes, including hurricane Ida in September 2021, brought major insured losses, it was an increase in non-catastrophic losses, especially in personal auto, that contributed the most to the worsening of underwriting results in 2021,” said Neil Spector, president of underwriting solutions at Verisk. “As the economy continued to recover, insurers saw incurred losses return to more typical levels, additionally pushed up by inflation and supply chain issues. Going into 2022, the insurance industry continues to face a wide range of challenges, from climate change to evolving cyber threats. Those insurers with access to robust data from across the industry will be the best equipped for the constantly changing risk landscape.”

“Insurers are facing an extreme escalation in inflationary pressures that increasingly strained rate adequacy last year,” said Robert Gordon, senior vice president policy, research, and international, for the American Property Casualty Insurance Association (APCIA). “While both net written and net earned premiums increased during the third quarter, incurred losses and loss adjustment expenses increased even more (by 17.8%). Net underwriting losses worsened in the third quarter, driving insurers’ combined ratio to 104.5 and contributing to a 57% plunge in net income after taxes. Hurricane Ida contributed to continuing severe levels of catastrophe losses while increased auto accident frequency and severity spiked auto loss ratios.”

2021’s Third Quarter Sees Elevated Loss Levels

In third quarter 2021, insurers saw their net income after taxes decline to $4.7 billion from $10.9 billion the year prior. The industry’s operating income was $2.5 billion, down from $7.7 billion in third quarter 2020.

Loss and loss adjustment expenses increased in third quarter 2021 to $143.1 billion from $121.4 billion a year earlier. These helped drive the loss ratio for the quarter to 79.3%, the highest quarterly loss ratio since third-quarter 2017, when Hurricanes Harvey, Irma and Maria caused extensive losses.

The combined ratio deteriorated to 104.5% in third quarter 2021 from 101.3% in third quarter 2020.

Read the full report from Verisk and APCIA.

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