Extreme weather conditions, fixing issues to push property insurance higher: Hippo CEO
Extreme weather events and a shortage of labor and materials for repairs will drive property insurance rates up over the next several years, the chief executive of U.S. home insurer Hippo said on Tuesday.
While homeowners stayed at home during the pandemic, their properties suffered more damage due to issues like leaks in bathrooms, and trades people were more difficult to mop, Assaf said. Wand, Managing Director and Co-Founder of Hippo in an interview with the Reuters Future of Insurance USA conference. To watch the video, click on: https://vimeo.com/566187753/e6e9fea3a1
“The severity of the claims has increased quite significantly,” Wand said, pointing to the higher rates charged by plumbers and for purchasing wood.
These prices were likely to normalize as the US economy opens up after the vaccine rolls out, but hurricanes and wildfires are causing more damage as more people move to areas prone to disasters, he added.
“I expect to see rates rise over the next several years,” Wand said.
“Labor and materials keep increasing… the severity of catastrophic events continues to increase. “
Insurers are increasingly taking note of climate change, with many worries that rapid changes could make some premiums unaffordable, especially for clients exposed to extreme weather events.
Insurers and banks also face tighter regulatory oversight of their response to global warming, with shareholders expecting better disclosure and transparency on climate-related risks.
One of the benefits of the pandemic, however, was that “the world has moved forward three to five years on digitization,” Wand added.
Merge blank checks
Hippo said in March it would go public through a $ 5 billion merger with a blank check company backed by Silicon Valley heavyweights Reid Hoffman and Mark Pincus, a sign of growing interest for the rapidly growing “insurtech” sector.
Founded in 2015, Palo Alto-based Hippo sells home insurance online.
Home insurance products offered by Hippo are currently available in 32 U.S. states, covering more than 70% of the nation’s population, and the company expects its products to be available to 95% of the population here. the end of 2021.
The COVID-19 pandemic has forced the insurance industry to rely heavily on technology to reach customers, helping the ‘insurtech’ industry, which uses artificial intelligence and big data.
Insurance and tech need to do more when it comes to inclusion, Wand said.
“These two are industries that just aren’t diverse enough,” Wand said, adding that Hippo was recruiting data scientists and client agents from other industries to help improve diversity.
“We are trying to push and push.”
Insurtech Tractable told Reuters earlier this month it wants to boost diversity in an industry typically dominated by men, adding that more than 20% of its software engineers are women, above the industry average. . https://reut.rs/3gFtGkC
To learn more about the Reuters Future of Insurance USA conference, please click on here.
(Reporting by Noor Zainab Hussain in Bangalore and Carolyn Cohn in London; editing by Lisa Shumaker)
Top photo: House in Tupelo, Mississippi on May 3, 2021. Several tornadoes have been reported in Mississippi. AP Photo / Thomas Graning.
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