Morning Briefing: Scrap the FIO says insurance body

Scrap the FIO says insurance body...  Insurtech forecast to grow 10 per cent through 2020... Northeast coast facing increased hurricane risk...

Insurance News


Scrap the FIO says insurance body
The Federal Insurance Office should be repealed; the National Association of Professional Insurance Agents says.

It’s calling for the FIO to be scrapped as part of a review of the insurance industry’s regulatory framework, saying that there is an opportunity for reform with Republican control of Congress and the White House.

“With Congress poised to significantly roll back key provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act, we ask that they repeal the FIO,” said PIA National Vice President of Government Relations Jon Gentile. “A June 2013 report issued by the Government Accountability Office found that the state-based system of insurance regulation helped to mitigate the negative effects of the financial crisis on our industry. This report highlights the unnecessary bureaucracy that the FIO represents. Our longstanding and robust state-based insurance regulatory regime does not require this level of federal oversight.”

 Insurtech forecast to grow 10 per cent through 2020
The next few years will see the insurtech market grow by around 10 per cent, a new forecast reveals.

Global tech research firm Technavio predicts that the value of the market will be $5.89 billion by 2020 with the rise in smartphone usage one of the main driving forces behind the increase.

“The competition among different market participants is expected to intensify during the forecast period with the rise in the use of smartphone users for entering the online space,” said Amit Sharma, a lead analyst at Technavio. “International players are expected to grow during the forecast period through various M&A. As these start-ups attract more users and media coverage, investors are eagerly waiting for the next-generation disruptive challengers.”

Banks and insurance companies are expected to look to develop their own solutions or enter strategic partnerships as heavy competition threatens to erode their market share.

For the insurance industry there is also a benefit from the growth of online financial products including payment systems.

“Due to the rise in several cyber-attacks and security threats over the last five years, many insurance firms started to spend a significant amount of time and money towards technological risk management systems to identify, manage, optimize and mitigate risk,” adds Amit.
Northeast coast facing increased hurricane risk
Shifting weather patterns could bring more powerful and frequent hurricanes to the Northeast coast of the US according to a new academic study.

Researches at Durham University in the UK found that hurricanes have been moving northwards from the western Caribbean over the past few hundred years and this has been driven by rising levels of carbon dioxide emissions.

The report suggests that New York and other major northeast cities could face severe storms and need to prepare better.

"Given the devastation caused by Hurricane Sandy it is important that plans are put in place to protect against the effects of similarly destructive storms which could potentially occur more often in the future," said lead author, Dr Lisa Baldini, in the Department of Geography, Durham University.

The risk to Northeast US does not mean a reduction in risk for the Caribbean, frequently hit by hurricanes with large economic and insurance costs.

“Rising sea surface temperatures could promote the development of cyclonic storms within the western Caribbean,” explained Co-author Dr James Baldini, in Durham University's Department of Earth Sciences. “We therefore need to prepare for the effects of more frequent landfalls of larger storms along the Northeast coast of the United States and stronger storms impacting the Caribbean."

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