News to know this week
Need to catch up on the news? Here's a digest of news stories that passed our desk this week. We offer quite the mix, from the latest on flood insurance, a primer on chatbots, and news on agency valuations and industry analysis.
Flood insurance - Reforming the National Flood Insurance Program (NFIP) is on Congressional docket, and one of the proposals being floated would cap agent and insurer commissions. Jennifer Webb of Independent Agent offers a summary of this and other proposed changes to NFIP in Federal Proposal Would Cut Insurer and Agent Compensation. Here's an excerpt:
Currently, WYO companies receive 31.9% of policyholder premiums before various federal fees and surcharges are added to administer the NFIP. From that amount, WYOs pay about half to agents, in addition to paying vendors, state premium taxes and other costs.
While the document does not provide additional details or outline a specific cap on agent commissions, such a deep cut to WYO compensation is expected to significantly impact agent commission levels, as it will force carriers to reduce costs. The Big “I” is concerned that such a drastic cut to the WYO program will limit the delivery mechanism for flood insurance and ultimately force insurers and agents to leave the WYO program—potentially limiting consumer access to the NFIP.
The Connected Future - In Insurance Journal, Joe Harrington talks about how "exposure data tracking" is taking over personal lines insurance. Sensors in our cars, homes and personal devices are allowing this kind of tracking and "becoming a competitive imperative in personal lines underwriting and rating." In Joe reports on talks given by two speakers at the recent Product Management Workshop of the Casualty Actuarial Society (CAS). he talks about the impact on both connected homes and autos.
The scoop on Chatbots - Don't know what a chatbot is? If you use Siri, Alexa, Google's Assistant, or any messaging apps, you actually do know what they are. But if you'd like to know more about why and how they are expected to impact business, tech entrepreneur Larry King offers an infographic and an article on 11 Amazing Facts You Might Not Know About Chatbots at LinkedIn, noting that, "What you see and experienced so far is just the beginning of what is forecast to be a billion-dollar industry in less than 10 years. Many top brands, including Uber, Sephora, and CNN, have already adopted chatbots."