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The 2024 elections are only two weeks away. Prior to election day, ICT will share a member’s only pre-election synopsis and commentary on the races of interest and what it may mean for the 89th Texas Legislature, including any potential impact on property and casualty insurance. Be on the lookout for this special member’s only report. For your reference, here are some early dates of interest as we prepare for the session:
- Tuesday, November 5 – Election Day
- Tuesday, November 12 - Early bill filing begins
- Tuesday, January 14, 2025 - 89th Legislature begins
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TWIA and FAIR Plan Continue Hurricane Beryl Claim Payouts, Announce New Liability Limits for 2025
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The Texas Windstorm Insurance Association (TWIA) and Texas FAIR Plan continue to process claims from Hurricane Beryl, with most claims closed or in progress with payments made. Additionally, TWIA and FAIR Plan issued moratoriums during Hurricane Milton, and the Texas Department of Insurance approved an increase in liability limits for manufactured homes in 2025.
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Key Points:
- TWIA received 31,163 claims and FAIR Plan received 9,740 claims from Hurricane Beryl, with over $330 million paid out combined.
- 73% of TWIA claims and 93% of FAIR Plan claims have been closed or are in progress with payments.
- TWIA and FAIR Plan implemented brief moratoriums during Hurricane Milton, which did not impact Texas.
- The Texas Department of Insurance approved an increase in TWIA's liability limits for manufactured homes.
- The new liability limits will be effective January 1, 2025, with residential limits unchanged and manufactured homes increased to $116,700.
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TWIA Options After Denial of the 10% Rate Increase
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On October 15, TDI issued Commissioner’s Order No. 2024-8911 disapproving TWIA’s 10% rate increase that TWIA filed with TDI after a 6-2 vote by the TWIA board. We’ve had questions about what steps, if any, could TWIA take to have the decision reconsidered. As a reminder, TWIA has 30 days after receipt of the Order to file an amended annual filing conforming to the criteria the Commissioner’s Order lists that TWIA’s amended filing would be required to meet in order to obtain approval of the rate filing. If TWIA makes an amended filing, TDI has 30 days after receipt to approve or disapprove the amended filing. See Texas Insurance Code 2210.352 and 2210.353 for the specific statutory language regarding TWIA’s options for review.
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ICT Responds to Texas Lawmakers with Proposals to Stabilize Insurance Costs
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ICT submitted a letter to the House State Affairs Committee, offering potential ideas for consideration in response to their interim charge to address the economic factors impacting insurance premiums. The letter was submitted in response to Chairman Todd Hunter's request for stakeholders to provide potential solutions.
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ICT suggested that, as the committee considers possible approaches to address the rising cost of insurance, they consider:Â
- Lessening incentives for litigation abuse;
- Preventing abuses in roofing repair and protecting policyholders from fraud;
- Protecting the solvency and competitiveness of the Texas market;
- Limiting the ability to charge added fees for vehicle storage during repair; and
- Mitigation and resilience strategies.
As a reminder, the House State Affairs Committee was charged with exploring the economic challenges driving rising insurance premiums and potential solutions and submitting any findings and recommendations to the 89th Legislature.
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Nat cat insured losses up 5% from 10-year average
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According to a recent report by Gallagher Re, global insured losses from natural catastrophes reached at least $108 billion in the first nine months of 2024, a 5% increase over the 10-year average of $102 billion. The U.S. accounted for a significant portion of these losses, primarily driven by severe convective storms and Hurricane Helene. Notably, the total losses so far this year are down 11% compared to the same period in 2023.
Key Points
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Increased Insured Losses: Global insured losses reached at least $108 billion in 2024, up 5% from the 10-year average of $102 billion.
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U.S. Impact: The U.S. contributed over $77 billion, representing 71% of the total insured losses, surpassing its decadal average of $65 billion.
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Severe Weather Events: Severe convective storms accounted for more than half of global losses, with $57 billion in damages—$51 billion of which were in the U.S.
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Costliest Event: Hurricane Helene was the most significant event, resulting in insured losses between $10 billion and $15 billion.
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Car Insurance Price Increases Are Set to Slow. Why Drivers Will Finally Get a Break.
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Recent trends indicate that the steep increases in auto insurance prices are beginning to slow, offering relief to drivers who have faced significant premium hikes over the past two years. With inflation in premium prices decelerating, vehicle owners can look forward to more manageable costs ahead.
Key Points
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Slowdown in Price Increases: Auto insurance premium inflation is decelerating, signaling a potential end to the rapid price hikes of the past two years.
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Relief for Consumers: Drivers can expect a break from the budget-busting auto insurance costs that have burdened many households recently.
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Market Adjustments: The slowdown suggests that the insurance market may be stabilizing, which could lead to more competitive pricing in the near future.
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Impact of Inflation: While inflation has impacted many sectors, the easing of premium increases reflects adjustments within the auto insurance industry.
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Future Outlook: With the anticipated stabilization of prices, vehicle owners may experience a smoother financial outlook regarding their auto insurance costs.
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The Home-Insurance Crisis That Won’t End After Hurricane Season
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As hurricanes like Milton and Helene hit, homeowners in high-risk areas find themselves without coverage, prompting urgent discussions among policymakers. The situation reflects broader issues within the insurance industry, where major companies are retreating from high-risk areas, leaving many homeowners underinsured or uninsured.
Key Points
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Insurance Market Instability: The home insurance industry is struggling to adapt to increasing climate risks, with major insurers pulling back from high-risk areas like Florida and California.
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Impact of Climate Change: Extreme weather events are becoming more common and severe, causing significant economic repercussions and challenges for local, state, and national governments.
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Lack of Flood Insurance: A large percentage of homeowners, especially in coastal regions, lack flood insurance, leaving them vulnerable after disasters. In Florida, over 80% of homeowners do not have flood coverage.
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Need for Public Solutions: Experts are calling for a national solution, such as a federal reinsurance facility, to stabilize the market and ensure coverage in high-risk areas.
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Challenges in Policy Implementation: While there is a consensus on the need for reform and increased resilience against climate change, achieving political agreement on public spending and regulatory changes remains a significant hurdle.
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Progressive sees hurricane losses but still doubles Q3 income from last year
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Despite facing $563 million in catastrophic losses from Hurricane Helene, Progressive Insurance has reported a significant increase in net income for Q3 2024, doubling its earnings from the previous year. The surge in profit, reaching $2.33 billion, is attributed to a growing demand for personal auto insurance policies, supported by a favorable economic environment and increased consumer confidence.
Key Points
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Significant Profit Growth: Progressive's net income rose to $2.33 billion ($3.97 per share) in Q3 2024, up from $1.12 billion ($1.89 per share) in Q3 2023.
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Impact of Hurricane Helene: The company incurred $563 million in losses due to Hurricane Helene, including $401 million in vehicle-related losses.
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Increased Demand for Insurance: The demand for personal auto insurance policies increased by 15%, with the number of policies growing from 25.4 million to 29.2 million.
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Strong Financial Metrics: Net premiums written increased by 25% to $19.46 billion, and the combined ratio improved to 89%, indicating profitability in premium earnings versus claims paid.
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Ongoing Evaluation of Losses: Progressive continues to assess the financial impact of Hurricane Helene and other related losses, with potential for changes as more information becomes available.
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ICT in the News:Â Free smoke alarm programs
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ICT's Director of Communications and Public Affairs, Rich Johnson, emphasizes the importance of the Out to Alarm Texas initiative in enhancing community outreach. Learn how to assist clients in obtaining complimentary smoke alarms and ensure safe installation, reinforcing your dedication to safety and prevention this Fire Prevention Month.
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ICT in the News:Â State Farm Campaign Aims to Provide Smoke Alarms to 1,300+ Texas Homes
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State Farm is set to provide smoke alarms to over 1,300 homes in Texas as part of the 2024 Out to Alarm Texas initiative, supported by ICT.Â
Key Points:
- Smoke Alarm Distribution: The 2024 campaign will deliver smoke alarms to more than 1,300 Texas homes, prioritizing communities with elevated fire risks.
- Long-standing Initiative: The Out to Alarm Texas program was established in 2005 to mitigate fire-related losses and has since become a collaborative effort involving ICT, State Farm, and local fire departments.
- Community Safety Focus: Rich Johnson, Director of Communications and Public Affairs at ICT, emphasizes the commitment to enhance the safety and security of Texas residents through this initiative.
- Growth and Impact: Over the years, the program has expanded to include more than 50 participating fire departments and has distributed approximately 29,000 smoke alarms statewide.
- Recent Achievements: In 2023 alone, the initiative provided over 1,700 smoke detectors to residents, demonstrating its ongoing dedication to fire safety in Texas communities.
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ICT in the News: Agencies providing free smoke alarm distribution
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ICT in collaboration with Texas based State Farm agents, is advancing fire safety across the through the Out to Alarm Texas initiative.Â
Key Points
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Fire Safety Initiative: The Out to Alarm Texas program, led by ICT and State Farm, focuses on providing free smoke alarms to Texas residents to enhance fire safety.
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Long-standing Commitment: Since its inception in 2005, the initiative has worked to reduce fire-related fatalities and property damage across the state.
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Significant Distribution Goals: In 2024, the partnership aims to distribute over 1,300 smoke alarms statewide, emphasizing the program's community impact.
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Installation and Safety Checks: Local firefighters will not only install the smoke alarms but also inspect existing alarms and identify potential fire hazards in homes.
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Support and Availability: Smoke alarms are offered on a first-come, first-served basis, and residents are encouraged to visit the ICT website for more information and to learn how they can support the initiative.
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Check out all things ICT!
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Call for Event Speakers and Topics!
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The Insurance Council of Texas (ICT) is on the lookout for knowledgeable and engaging speakers for our 2025 events! We are looking for experts to discuss industry trends at our upcoming gatherings, including:
- Quarterly ICT Webinar Series
- Workers' Comp Conference:Â September 15-16, 2025
- P&C Insurance Symposium:Â September 17-18, 2025, in Austin, TX
We’re seeking speakers to cover critical industry trends, topics such as:
- Emerging topics and innovations
- Legal developments affecting insurance
- AI and technology: challenges and opportunities
- Resiliency strategies for businesses and communities
- Insights on the future of the insurance industry
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For more information and to get involved, click here.
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