The National Association of Insurance Commissioners (NAIC) recently wrapped up its fall meeting in San Diego, Ca., where it celebrated its 150th Anniversary. It was a hybrid event with an estimated 1,200 people attending in person and another 1,800 virtually. AAIS Views caught up with our Manager Government Affairs and Compliance, Lori Dreaver Munn and AAIS VP of Memberships & Solutions Truman Esmond, who both attended in person to hear about some of the key themes and takeaways from the meeting.
As the pandemic rolls on, with the omicron variant providing the latest wrinkle, the auto market continues to be reshaped by COVID-19. Aside from the overall financial impact, now increasing claims, severity of claims and higher losses, and worsening consumer behavior are all leaving a mark. Here is the latest from around the industry:
In 2002, Amazon eliminated millions of dollars from its technology costs by switching to the Linux operating system, an open source technology platform from the Linux Foundation. In a filing with the Securities and Exchange Commission, Amazon stated it was able to cut technology expenses by about 25%, from $71 million to $54 million, primarily through “migration to a Linux-based technology platform that utilizes a less-costly technology infrastructure, as well as general price reductions for data and telecommunication services due to market overcapacity. Amazon continues its open source technology strategy today, as do thousands of other companies. Today, 96.3% of the world's top one million servers run on Linux.
A Fast-Moving Auto Industry Presents Challenges and Opportunities
The automotive industry transformation continues to have significant repercussions in the insurance industry. With improving sophistication in car technology, telematics, and consumer behaviors, insurance carriers face new and unprecedented challenges spanning the entire lifecycle of the policy from research to claims. Still, personal and commercial auto insurance remain the industry bellwether as the largest product lines accounting for more than $300 billion in annual premiums.
Since the COVID-19 pandemic struck more than a year ago, travel restrictions and remote work and schooling kept people close to home. With far fewer places to go, there were less people and cars on the roads, which had numerous implications for the insurance industry.
IBM, who has partnered with AAIS on the development of the openIDL data-management platform on blockchain, has long been a strong proponent of open-source software development. Chris Ferris, an IBM Fellow and CTO for Open Technology at IBM, spoke to AAIS’s Joan Zerkovich on the importance of the open-source concept and the powerful outcomes IBM has seen from building technology in an open environment.
The auto industry is fueling up for new technology down the road. Fully autonomous vehicles and advanced crash-data analysis will all impact not only how the industry operates, but how it is insured as well.
Earlier this year, AAIS surveyed insurance carriers to better understand where they believe the auto insurance market is heading and the challenges associated with the auto technology evolution. After analyzing the responses, the results were clear: change is coming, and the opportunities for AAIS to help Members stay ahead of the curve are great.
There has seen an increase in governmental oversight of the manufacturing, handling and storage of food. The Food Safety Modernization Act (FSMA) was passed to prevent practices that could potentially create food safety hazards. The Food and Drug Administration (FDA), in turn, released rules for the safe transport of food. They are known as rules for "Sanitary Transportation of Human and Animal Food", and they are affecting the inland marine market.
Shared mobility services are not only growing, they also are expanding in scope. Among these trends is the significant increase in vehicle sharing programs. A recent Frost & Sullivan report noted that approximately 7 million users were sharing roughly 112,000 vehicles in 2015 in the United States alone. These numbers are expected to grow to over 36 million users and 427,000 vehicles by 2025. Market revenues are predicted to increase to more than $16 billion within the next five to ten years.