Overall, there was a consensus around the challenges we face, and the use of new and emerging technologies being deployed. According to respondents, the Florida Homeowners Insurance Market, Reinsurance/Capital, and Climate Risk/Natural Catastrophe Exposure were top concerns. Data Integrity/Accuracy and Accuracy of Risk Models were the top two data & technology priorities for respondents.

Leading Concerns About the Florida Insurance Market

It appears not much has changed over the past year with regard to the issues facing the Florida market. In our 2023 survey, respondents’ top concerns were the Florida Homeowners Insurance Market, followed by Reinsurance/ Capital, Assignment of Benefits Litigation, Insurance Regulation, Climate Risk/Natural Catastrophes, and then the Economy/Inflation.

More than 80% of respondents were at least Moderately Concerned about the Florida Homeowners Market. Slightly fewer view Reinsurance/Capital as a major concern.

Assignment of Benefits Litigation dropped from third in 2023 to seventh place among the top concerns in 2024. Moving higher among concerns are Climate Risk/Natural Catastrophe Exposures, with more than 70% now saying they are Extremely or Moderately Concerned.

Insurance Regulation and Federal/State Legislation garnered similar levels of concern with more than 30% of respondents Extremely Concerned. The Economy/Inflation remained a concern to respondents in 2023, with just 20% being Extremely Concerned.

Priority Placed on Data and Technology Issues

The top Data and Technology issues remained the same year-over-year compared to 2023. Interestingly, nearly all respondents said Data Integrity/Accuracy was at least Somewhat a Priority, while 85% said the same about Accuracy of Risk Models.

More than a third of respondents put Ownership/Control of Proprietary Data as their Top Priority, while only one in five said the same for Security/Privacy.

Regulatory Reporting became a larger priority in 2024, with 69% saying it was at least Somewhat a Priority and one in five reporting it as a Top Priority.

Half of respondents now say Artificial Intelligence/Machine Learning is at least Somewhat a Priority, making it a higher priority than in previous years.

Storage/Legacy Issues is becoming a lesser issue, with more than 68% rating it a Low Priority, or Not a Priority at all. Similarly, Info-Sharing and Blockchain Initiatives are getting little attention, with neither being a Top Priority for any respondents, and the majority making them a Low Priority, or Not a Priority.

For more information on the results of AAIS Market Surveys or any of the advisory products and services offered by AAIS, please contact an AAIS Engagement Manager.

The post AAIS Market Research Looks at Trends, Concerns, and Data/Technology Issues Affecting the Florida Market first appeared on AAIS.

Biggest Challenges in the Market & Addressing Them with Data 

According to Kruck, the biggest current challenges are inflation, the uncertainty of climate change, and the reinsurance market. He advocated that better data and data management are essential to address all three. “Before you can solve a problem, you’ve got to know its dimensions and quantify how big it is,” said Kruck. “You have to do that so that when you take action, you understand how you intend to impact the drivers as exhibited by the data. Then you need the data to see if you’re getting the results you want.” To tackle these issues, Kruck emphasized that ultimately, more customized data is needed. 

A Better Approach to the “Data Problem” 

Kruck does not believe the industry has a unified approach to aggregating data in order to understand and address some of the problems on a macro basis. “Typically, we as companies are using data to our specific ends, but not with a broader perspective of what our data can mean to assess things like climate change, or how we can save by mitigating or hardening our homes,” he explained. “So, I think the missing link in the question is, if you could effectively aggregate insurance data, would you get an insight into some of the ways that these trends are impacting us? And how as a society should we be looking to address them?” Kruck concludes that there needs to be a meaningful way to aggregate data, so it is safe for companies to use it responsibly for these wider issues. 

AAIS… Stepping Up to Support Members 

Foremost, AAIS has to be fundamentally current on policy forms, rates, and rules. “Inflation and changing loss characteristics are going to be reflected in the underlying rates, and companies have to be proactive,” Kruck advised. “Our rates, rules, and loss costs need to reflect that to support our companies.” On the forms side, Kruck feels pressure from an emerging issue. “We certainly are seeing a lot of evidence of the sophistication of attorneys in Florida,” he said. “Focusing on weaknesses and forms is something they’ve systematized and figured out how to do, and I think we’re going to see a lot more of that outside of Florida.” To keep up with this, AAIS has to be on top of compliance issues and encourage its Members to move up to the latest forms. 

Outlook on AAIS & the Insurance Industry 

Overall, the outlook on AAIS is very positive. “We’re owned by our Members and we’re not-for-profit,” Kruck stated. “We exist because collectively, our Members believe that we can work together in some areas like policy, forms, rates, or rules, and make companies’ performances and the industry better.” Kruck doesn’t think AAIS’s work has to stop there. “My vision for AAIS is not only to deliver very strongly our historic mission, products and services, forms, rates and rules, but to look for areas where we can provide even more value to our Members.” 

To view the full interview with Werner Kruck, please click the video above. 

The post AAIS President & CEO’s View on Addressing Market Challenges with Data & His Vision for AAIS and Its Members first appeared on AAIS.