Oh Canada, the worrisome talent gap and a Wall Street standing ovation

While insured losses from Hurricane Milton estimated to fall somewhere between $17 billion and $28 billion, according to the latest from CoreLogic , let's take a big picture view of 2024. Through the first nine months, Gallagher Re reported global insured losses from nat cats of $108 billion — 5% above the 10-year average — despite total economic losses being lower at $280 billion. More frequent mid-sized events, particularly in heavily insured regions like the U.S., drove these figures. “The recent landfalls of Milton and Helene in the U.S. — coupled with the significant third-quarter impacts from catastrophic flooding events in Europe, Asia and Canada – underscore the escalating volatility and intensity of weather and climate events,” Gallagher Re's Steve Bowen said. Check out the full report .

The home insurance industry continues to grapple with rising all-perils loss costs, which are up 52% since 2019, per LexisNexis . With claims from hail, wind, fire and flooding, last year saw record-breaking cat claims, and 46% of all claims were deemed catastrophic. “As home insurance carriers continue to contend with seasonal and geographic variabilities related to climate — in addition to rising inflation, material and labor cost — understanding by-peril and macro level home insurance trends, coupled with maintaining extensive data and imagery on current house conditions over an extended period of time is imperative to remain nimble in today’s volatile and dynamic market,” LexisNexis's Cole Winans said.

Our neighbors to the north have some rather startling numbers of their own, with the annual average insurable losses in the last decade surging in Canada by an eye-popping 379%, when compared to the prior 30-year average, according to an analysis from MyChoice . The report cited statistics from the Insurance Bureau of Canada, which last month reported that a barrage of disasters has led to record-breaking 228,000 insurance claims over a 20-year period, a huge 406% increase compared to the previous 20-year average.

On the tech front, insurers and their customers don't see eye to eye on generative AI, according to the IBM Institute for Business Value , which recently published a study entitled, “Generative AI in the Insurance Industry: You Can’t Win if You Don’t Play .” The results show that insurance CEOs were basically evenly divided on whether they see generative AI as more of a risk (49%) versus an opportunity (51%). At the same time, only 29% of customers said they are comfortable with the tech providing service. More than three-quarters acknowledge that it is necessary to keep pace with competitors.

“The insurance industry has made headway in generative AI with customer experience and chatbot enhancements, but insurers must focus on adopting comprehensive governance frameworks that ensure transparency, privacy, and explainability to ensure they are building trusted AI assistants and reliable processes,” IBM 's Mark McLaughlin explained. “There are also significant opportunities in connecting customers to the right products. Leveraging AI across the enterprise will be critical to improve both customer risk experiences and to implement the underlying IT tools that power those experiences.”

And the talent gap remains top of mind, with half a million workers, including many seasoned underwriters, expected to hang it up win the next decade or so. Jeremy Jawish , CEO of Shift Technology, mulled this question and more in Insurance Innovation Reporter . "How can carriers deliver consistent profitability and growth? What are the technologies insurers are turning to in their efforts to gain operational efficiencies and reduce costs? Where do these technologies intersect with the policy and claims lifecycle?" he wrote.

As for the here and now, the broader industry seems to be doing just fine, if Travelers 's latest earnings report is any indication. The company posted a third-quarter profit of $1.26 billion, tripling the bottom line from last year, while underwriting income flipped to $685 million after a loss of $136 million. As you can see, Wall Street loved the report!

Travelers isn't the only stock drawing rave reviews from analysts.

Enjoy the weekend, insurance peeps!