Weekly News Roundup, October 18

In this week’s news will talk about how COVU Secures an Additional $12.5 Million in Series A Funding, Hurricane Milton – how big will insurers’ losses be?, and much more…

COVU, Inc., a leader in AI-native services for insurance agencies, today announced the successful completion of $12.5 million in equity and debt financing, as part of the first tranche of its Series A funding round. This brings total funding to date to over $20 million. The funding round attracted investment from prominent investors including

Benhamou Global Ventures, ManchesterStory, and Markd, with participation from existing and new investors, showing strong backing for COVU’s mission to empower insurance agencies with cutting-edge technology and support

This funding signals a new chapter for insurance agencies seeking to elevate their services. With an additional $4 million in debt and equity financing to be unlocked upon reaching key milestones, COVU is committed to helping agency partners overcome operational challenges and strengthen customer relationships.

The California Department of Insurance (CDI) has announced the launch of a community-based flood program that will provide payouts if floodwaters reach a predetermined level.

The initiative, which is the first of its kind in the state, is part of broader efforts to address increasing flood risks driven by climate change, according to a report from AM Best.

The program is set to begin in Isleton, a small town in Sacramento County with fewer than 1,000 residents, according to US Census Bureau data. The town was selected due to its location in a 100-year floodplain, making it particularly vulnerable to flooding, according to CDI.

The new flood program will function separately from existing insurance policies and is intended to supplement current coverages. In the event of a significant flood, the program will provide “relatively small” payouts to residents.

TD Cowen released a 3Q24 property and casualty (P&C) insurance preview, outlining its expectations for the industry. The firm is generally positive on third-quarter results, anticipating favorable pricing with minimal impact from the recent interest rate cut.

Mixed catastrophe (cat) losses from Hurricane Helene are expected, and concerns remain about prior-year development in recent accident years.

TD Cowen suggests the P&C hard market may be nearing its peak, as commercial pricing decelerated slightly in the third quarter. MarketScout reported a 3.8% increase in commercial pricing, down from 4.4% quarter-over-quarter, while IVANS reported a 6.9% increase through August, compared to 7.1% the previous quarter. Loss trends are expected to remain stable, with most lines seeing mid- to high-single-digit increases.

Hurricane Milton, which struck near Siesta Key, Florida on October 9 as a Category 3 storm, could result in nearly $100 billion in total economic damage, including both insured and uninsured losses, according to Morningstar DBRS.

The storm, with sustained winds of 120 miles per hour, hit areas with high reconstruction costs, notably impacting the Tampa metropolitan region, a major economic hub. The damage has led to expectations that insured losses could reach the upper end of Morningstar DBRS’s initial $30 billion to $60 billion estimate, similar to the losses from Hurricane Ian in 2022.

The insured damage from Milton includes losses from flooding, which are typically covered by the National Flood Insurance Program (NFIP) rather than private insurers. The Sarasota and Tampa Bay areas experienced significant storm surge and heavy rainfall, with NFIP-covered losses potentially contributing up to $10 billion of the total insured loss estimate.

According to research from Network Assured, the global cyber security market was valued at $7.60 billion in 2021 and is expected to grow to $20.43 billion by 2027. And, with the rapid evolution of cyberattacks and threats, the landscape of cyber insurance is having to evolve quickly. After all, data from the Consumer Sentinel Network suggests there were over 5.5 million reports of fraud and identity theft in 2023 alone.

But what does this mean for insurers in the field? What are the core concerns and emerging risks coming to the table in 2025 and beyond?

“I anticipate more integration between cyber insurance and cybersecurity,” said Joshua Parrish, president, RT Specialty San Diego. “The risks are so difficult to predict and underwrite that it seems a natural evolution that more buyers will end up in an insurance program that provides both sides of the coin.”