Liberty Mutual in $2.29 billion mega deal

Liberty Mutual will also gain roughly 3,400 independent agencies across 33 states, adding to its already sizeable network of more than 100,000 independent agencies countrywide. This will make Liberty Mutual the second largest carrier in the independent agency distribution channel in the United States.

Through the deal, Liberty Mutual will also add $2.3 billion in premium and will significantly expand market share in personal lines and small commercial insurance.

Read next: Liberty Mutual Insurance reaches “important chapter” with leadership shuffle

“State Auto Group’s capabilities and product expertise are an ideal complement to Liberty Mutual’s domestic personal lines and small commercial business, and we welcome 2,000 talented associates to our family,” said Liberty Mutual chairman and chief executive officer David Long.

“Equally appealing are its values. For almost a century, State Auto has celebrated a culture of caring for people, exceptional service and deep philanthropy, mirroring our purpose to help people

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Big insurance companies launch net-zero climate alliance

MILAN, July 11 (Reuters) – Eight of the world’s leading insurance and reinsurance companies on Sunday launched an alliance to help speed up a transition to a net zero emissions economy.

The companies, which include Europe’s top three insurers by premiums – Allianz (ALVG.DE), AXA (AXAF.PA) and Generali (GASI.MI) – said the Net-Zero Insurance Alliance (NZIA) would work to shift underwriting portfolios towards net-zero greenhouse gas emissions by 2050.

The move comes as insurers come under increasing pressure to spell out how they plan to decarbonise their businesses amid growing calls for them to stop underwriting and investing in fossil fuel projects. read more

Each of the companies will individually set intermediate targets every five years and report on progress annually in cooperation with competition authorities, the NZIA members said in a statement.

“With this new Net-Zero Insurance Alliance, we are raising our climate ambition further,” said Thomas Buberl, Chief

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Liberty Mutual to Acquire State Auto Group

Insurer Liberty Mutual reported that it will acquire State Auto Group, a super-regional insurance holding company headquartered in Columbus, Ohio.

Under the terms of the agreement, State Auto mutual members will become mutual members of Liberty Mutual. Also, Liberty Mutual will acquire all of the publicly held shares of common stock of State Auto Financial for $52 per share in a cash deal of about $1 billion.

The acquisition will significantly expand Liberty Mutual’s already strong position in personal lines and small commercial insurance. It is the sixth largest auto and home insurer in the U.S. Liberty Mutual today distributes Safeco Insurance personal auto, homeowners and specialty products, and Liberty Mutual small business insurance through more than 10,000 independent agencies countrywide.

Through the deal, Liberty Mutual will add $2.3 billion in premium and State Auto’s network of approximately 3,400 independent agencies across 33 states. This will position it to become

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Disney sued by insurer | Insurance Business

The House of Mouse is being sued by an insurer, which maintains that it is unable to pay for the “second wave” of claims on delayed film and TV productions.

Fireman’s Fund Insurance Company filed a case against Disney in Los Angeles County Superior Court. The Los Angeles Times reported that the lawsuit disputed the entertainment giant’s claim for $10 million in insurance coverage for production delays.

Fireman’s Fund Insurance Company is a US subsidiary of Allianz.

In the complaint, the insurer explained that it is not disputing insurance claims made by Disney during the “first wave” of COVID-19 shutdowns in March 2020. Rather, the insurer noted that it should not have to cover for the “second wave” claims that happened after film and TV shooting was allowed to resume in California and other regions.

The insurer also explained in its complaint that Disney is not entitled to “cast coverage”

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Lemonade: This $5 billion insurance company likes to talk up its AI. Now it’s in a mess over it

Yet less than a year after its public market debut, the company, now valued at $5 billion, finds itself in the middle of a PR controversy related to the technology that underpins its services.

On Twitter and in a blog post on Wednesday, Lemonade explained why it deleted what it called an “awful thread” of tweets it had posted on Monday. Those now-deleted tweets had said, among other things, that the company’s AI analyzes the videos that users submit when they file insurance claims for signs of fraud, picking up “non-verbal cues that traditional insurers can’t, since they don’t use a digital claims process.”
The deleted tweets, which can still be viewed via the Internet Archive’s Wayback Machine, caused an uproar on Twitter. Some Twitter users were alarmed at what they saw as a “dystopian” use of technology, as the company’s posts suggested its customers’ insurance claims could be vetted
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Lemonade’s disturbing Twitter thread reveals how AI-powered insurance can go wrong

Lemonade, the fast-growing, machine learning-powered insurance app, put out a real lemon of a Twitter thread on Monday with a proud declaration that its AI analyzes videos of customers when determining if their claims are fraudulent. The company has been trying to explain itself and its business model — and fend off serious accusations of bias, discrimination, and general creepiness — ever since.

The prospect of being judged by AI for something as important as an insurance claim was alarming to many who saw the thread, and it should be. We’ve seen how AI can discriminate against certain races, genders, economic classes, and disabilities, among other categories, leading to those people being denied housing, jobs, education, or justice. Now we have an insurance company that prides itself on largely replacing human brokers and actuaries with bots and AI, collecting data about customers without them realizing they were giving it away,

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Questions aplenty in Florida condo collapse

The collapse of a section of a Surfside, Florida, condominium building in which at least 18 have been confirmed dead and 145 are still unaccounted for is likely to lead to protracted litigation that could trigger a widening pool of property and liability claims, experts say.

So far at least four negligence lawsuits have been filed on behalf of surviving residents and family of those missing against Champlain Towers South Condo Association Inc. alleging that it failed to secure and safeguard the lives and property of plaintiffs, and more are expected.

Property coverage for the building was led by Great American Insurance Co. under an all other perils property policy, market sources say. The condo association also had a $5 million commercial general liability policy provided by James River Insurance Co., according to various reports. Both insurers have yet to respond to calls for comment.

About 55 apartment units in

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Casualty rates rise at slower pace during renewals

General liability and excess umbrella commercial insurance rates increased again during mid-year renewals, but policyholders generally saw smaller price hikes than a year ago, insurance industry sources said.

Capacity is available and can be costly but new capital entering the market can help blunt rate increases.  

“We had a lot less of an increase than we anticipated. We were still in double digits from a general liability and umbrella and excess standpoint, but we were anticipating 40% to 50% and ended up with about 10% to 15%,” said Penni Chambers, vice president of risk management for Hillwood Development Co. LLC in Dallas.

On average, policyholders did not see increases as high as those in 2020 or 2019, said Douglas O’Brien, national practice division manager for casualty and alternative risk in New York for USI Insurance Services LLC. “I do see a thawing,” he said.

While some policyholders are still seeing

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Property insurers focus on high-risk exposures at mid-year renewals

Commercial property insurance buyers saw limited wildfire capacity, greater scrutiny of time element coverages and a push to ensure accuracy of valuations at mid-year renewals as price increases continued to tick down.

Recent losses such as the first-quarter Texas winter storm and freeze and the June 24 collapse of a condominium building in Surfside, Florida, are examples of the unexpected losses that property insurers can face, brokers say.

Whether property rate increases continue to moderate for the remainder of 2021 will depend in part on how the Atlantic hurricane season unfolds.

Average property rate increases in the high single digits to the mid-teens are the norm, but for loss-hit accounts and certain challenged occupancy types increases can be 20% to 30% or even higher, they say.

Tougher occupancy classes of property include habitational, heavy manufacturing, forest products, risks that have a molten exposure, food and recycling, brokers say.

While underwriters

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D&O rate hikes moderate as new capacity arrives

Directors and officers liability insurance rates continued to rise at July 1 but in smaller increments than in recent renewals, and many experts believe rates may be flat by this time next year.

New capacity entering the D&O sector has relieved some of the upward pressure on rates, although for now it is focused on excess layers, experts say.

Problematic areas in the D&O sector include coverage for “de-SPAC” transactions, when there is a merger between a private operating company and a publicly traded special purpose acquisition vehicle, and fiduciary litigation associated with alleged high fees.

“The entire broker market saw rate increases for almost every single one of their clients” last year, with the market peaking in the second quarter of 2020, said Seth Pfalzer, senior vice president and partner at Woodruff Sawyer & Co. in San Francisco.

The worst of the hard market may be over, said John

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