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New Bill Set To Block Life Insurers from Buying Customers' Genetic Testing Data

Delaware lawmakers are on the verge of passing a ground breaking bill, HB 286, aimed at protecting consumers' genetic privacy in the realm of life insurance. The proposed legislation seeks to prohibit life insurers from accessing genetic testing data obtained from direct-to-consumer companies like 23andMe and Ancestry. Spearheaded by State Representative Jeff Spiegelman, HB 286 also aims to prevent insurers from using genetic information to reject or deny policy renewals.

Inspired by the tragic story of Ericka Byler, who passed away from an undiagnosed congenital heart defect at 25, the bill underscores the ethical concerns surrounding the use of genetic data in insurance decisions. Spiegelman emphasized the potential chilling effect on genetic testing participation if insurers were allowed unrestricted access to this sensitive information.

The adopted stance of Delaware shows the beginning of a countrywide movement to prohibit the improper use of valuable personal data when genetic testing and insurance are considered.

Chubb Inks Deal for Pet Insurance MGA from Aon

Chubb is demonstrating its presence in the pet insurance market as a global insurance leader in purchasing Healthy Paws from Aon. The deal, which is scheduled to close in the second quarter, indicates Chubb's attention to widening the span of its operations in this fast-growing sector. Healthy Paws, as a managing general agent spearheading pet insurance, has an online platform and serves over 500,000 dogs and cats in the US.

Chubb has been the exclusive underwriter for Healthy Paws since 2013, making this acquisition a natural progression in their partnership. John Lupica, Chubb's vice chairman, expressed excitement about welcoming Healthy Paws into the Chubb family, emphasizing the potential to empower more pet owners to access quality medical care.?

Headed by the president and COO of Healthy Paws, Jon Harris, the partnership will hope to extend the influence of the business on pets and pet parents.

World Bank Issues Cat Bond for Disaster Risk Protection in Mexico

The World Bank has taken a significant step toward bolstering disaster resilience in Mexico by issuing three catastrophe bonds worth $420 million. These bonds provide crucial insurance coverage to the Mexican government, particularly against named storm events on the Atlantic coast and earthquakes.

Mexico, known for its vulnerability to natural disasters, faces substantial risks, with over 40% of its territory and nearly one-third of its population exposed to various hazards. These bonds, which not only replace but also increase coverage by $60 million, signify a continued effort to mitigate such risks.

Pioneering the use of cat bonds since 2006, Mexico has sponsored 20 such bonds, demonstrating a commitment to leveraging innovative financial mechanisms for disaster risk management. The latest issuance, under the IBRD's program, drew interest from 27 institutional investors globally, ensuring catastrophe insurance financing for the next four years.

This partnership underscores the importance of collaboration in safeguarding against unforeseen events, setting a compelling example for other nations facing similar challenges.

Progressive Gains as U.S Drivers Shop Around for Auto Insurance

A recent J.D. Power and TransUnion report reveals a surge in drivers shopping for auto insurance, with the March 2024 shopping rate hitting 13.5 percent, the highest since September 2020. This increase follows a period of consumer reluctance to seek cheaper premiums in late 2023, attributed to persistent rate hikes. Progressive emerges as the leading beneficiary, attracting the most switchers from six of the top 10 auto insurers, including GEICO and State Farm.

The report highlights seasonal shopping trends, noting a rise from 11.7 percent in December 2023 to 13.5 percent in March 2024, with the switch rate climbing to 4.0 percent. Stephen Crewdson of J.D. Power cites high premiums driven by costly vehicle technology and reckless driving as factors prompting more consumers to switch insurers. The South saw the most significant regional increase in shopping, jumping from 13.2 percent to 14.4 percent between Q4 2023 and Q1 2024.

Climate Risks: Challenges in Catastrophe Bond

The success of catastrophe bonds faces a climate reality check as investors voice concerns over outdated risk models. The surge in smaller, climate-driven disasters has exposed shortcomings in predicting high-frequency events like wildfires and thunderstorms. The Elementum Advisors LLC's Jake Weber highlights the discrepancy between historical benchmarks and today's climate realities, emphasizing the need for updated risk assessments.

While cat bonds offer lucrative returns, the rise of secondary perils underscores the complexity of pricing risk accurately. Insurers are grappling with increasing losses from climate-driven events, with secondary perils dominating the insurance landscape. Modelers like Verisk Analytics are adapting, incorporating machine learning and extensive data analysis to refine risk assessments.

As climate change reshapes disaster patterns, investors must embrace more advanced modeling techniques to navigate evolving risks effectively. Ultimately, addressing the climate crisis demands forward-looking strategies, as relying solely on past trends leaves investors blind to an uncertain future.