The Friday Five

August 10, 2018

Every week The Friday Five will bring you interesting news and information from around the insurance industry.

How Will GDPR Affect the Insurance Market?

GDPR (General Data Protection Regulation) took effect in Europe on May 25th, and is expected to create a ripple effect that impacts U.S.-based organizations, regardless of whether they have European operations. GDPR was enacted to further protect the rights of individuals in controlling how their personal data is shared. Many expect similar regulations to arrive in the U.S. soon along with stiffer financial penalties for organizations that fail to comply. In his Property Casualty 360 article, Jeff brown presents 5 Questions Answered About GDPR’s Impact on Insurance.

Commercial Insurance Prices Rising

Excerpted from Paolo Taruc’s Insurance Business America article, Commercial Insurance Prices Up for Third Straight Quarter: Average commercial insurance prices around the world rose during the second quarter this year amid an uptick in insurance pricing for property lines (which continued to be affected by 2017 catastrophe losses) and increases in financial and professional lines. The 2.3% average rise marks the third consecutive quarterly increase, according to the latest Global Insurance Market Index by major brokerage Marsh. Financial and professional line pricing continued to accelerate, increasing 3.3% on average, with much of the increase due to directors and officers (D&O) insurance pricing in multiple regions.

Drivers Still Not Quite On Board With Autonomous Vehicles…

The Insurance Institute for Highway Safety (IIHS ) has confirmed what many people already know: Current autonomous vehicle systems aren’t ample substitutes for human drivers. For a recent “Reality Check” study, the nonprofit tested five driver-assist systems from BMW, Mercedes-Benz, Tesla, and Volvo. The results were varied. According to the Virginia-based nonprofit, when test vehicles didn’t perform as expected, the outcomes ranged from “the irksome” (too-cautious braking) to “the dangerous” (veering toward the shoulder because sensors didn’t detect lane lines). IIHS focused its evaluations on adaptive cruise control and active lane-keeping—each with consumer pros and cons. Read Stephanie Mlot’s Geek.com article, Fully Autonomous Car Still Not Ready for Prime Time.

…But, They’re Still Looking for Insurance Discounts

Autonomous vehicle technology still has a long way to go but drivers are already interested in how these new capabilities could affect their insurance premiums. According to a survey conducted by J.D. Power’s Property and Casualty Insurance Industry practice, 40 percent of consumers are willing to switch carriers if they get an autonomous discount. Nearly 70 percent of consumers expect insurance carriers to offer such discounts for self-driving cars. According to Tom Super, director of the property and casualty insurance practice at J.D. Power, insurers are not prepared for the impact of automation right now. Many OEMs already offer partial automation technologies like lane departure, but many drivers don’t have them yet. As a result, insurers may be caught flat-footed as more of these technologies are adopted. Read Brian Albright’s SearchAutoParts.com article, Drivers Interested in Autonomous Vehicle Insurance Discounts.

Quantifying Water and Fire Risks with Data Analysis

Excerpted from Steve Brewer’s PropertyCasualty360.com article, How Data Analysis Quantifies Water, Fire Risks for Insurers: The weather is unpredictable. And yet, sophisticated catastrophic risk and weather verification models have made it possible for property insurers to quantify the ‘what could, what if and what did happen’ of natural hazard risk. Surprisingly, outside of storm surge, wildfire, winter storms and other weather-related events, tools to help quantify the risk of water and fire damage from non-weather-related events have been nonexistent. So how can property insurers close the gap on pricing risk associated with damage that isn’t caused by Mother Nature?