Weekly News Roundup, August 9

In this week’s news will talk about Heritage Insurance reopens doors to Florida homeowners, Progressive sees doubling of losses in property segment, and much more…

Georgia has experienced a significant decline in the affordability of personal auto insurance over the past decade and a half, according to a recent report from the Insurance Research Council (IRC).

The report, titled “Personal Auto Insurance Affordability in Georgia,” highlights the state’s increasing insurance expenditures relative to median household income.

In 2022, personal auto insurance expenditures in Georgia accounted for 2% of the median household income, compared to 1.5% nationally. This placed Georgia 47th in the nation for auto insurance affordability, with only Louisiana, Florida, Mississippi, and New York ranking lower.

The state’s position has deteriorated significantly since 2006, when Georgia was the 27th most affordable state.

Heritage Insurance will resume writing new personal lines policies in Florida and the Northeast after having reached what chief executive Ernie Garateix called an inflection point.

The decision to reopen its doors to homeowners was revealed when the insurer published its financial results for the second quarter.

In a statement accompanying Heritage’s earnings report, Garateix said: “Our strong results demonstrate the continued execution of our underwriting and rate adequacy initiatives over the last three years. Through our proactive actions to improve rates and organically grow our commercial residential business, we are achieving top-line growth while expanding our margins and delivering stronger earnings.

“A key component of this strategy was our decision in December of 2022 to largely cease writing new personal lines policies in Florida and the Northeast given the wavering profitability of our book of business, coupled with tightening reinsurance markets at that time.”

A recent analysis from Munich Re Group offered a timely update into natural disaster losses in the first half of 2024 – with global losses reaching $120 billion while global insured losses hit $62 billion, significantly higher than the 10-year average of $37 billion.

Sharing insights into the overall loss figures, Tobias Grimm, head of climate advisory and natcat data at Munich Re, noted that while these were lower than the previous year (at $140 billion), they exceeded the average values for both the past 10 years and the previous 30 years. He also highlighted how some five decades of collecting data on natural hazard losses had led the reinsurance giant to uncover two key contributing factors behind increasing losses.

Progressive Insurance (formally The Progressive Corporation) has released its shareholder report for the second quarter of 2024, revealing a more than doubling of losses for its property segment.

In the three months ended June 30, Progressive’s pretax profit from personal lines (personal auto and special lines) amounted to $1.57 billion, a surge from 2023’s $55.3 million. Its commercial lines business, meanwhile, contributed $303.8 million in pretax profit, improving from $87.2 million last year.

The property segment, however, suffered bigger losses compared to 2023. The business – which writes residential property insurance for homeowners, other property owners, and renters, and umbrella insurance – posted a $487.8 million pretax loss in the quarter, a worse showing than 2023’s $206.8 million pretax loss.

Progressive’s total underwriting operations improved from a pretax loss last year worth $64.3 million to $1.39 billion in pretax profit this time around.

Washington state could make health coverage more affordable by creating a reinsurance program for individual and small group plans, increasing the minimum medical loss ratio standard, and using reference-based pricing, according to a report from the state’s Office of the Insurance Commissioner (OIC).

The report used state-specific claims and spending data to evaluate how each policy could be implemented and the estimated impact on costs. Insurance Commissioner Mike Kreidler noted that while the state has improved access to health care, affordability remains an issue.

“It’s clear from this report that we can make a difference and start tackling the underlying costs of health care that we’ve been battling for too long,” Kreidler said in a report from AM Best.