June 22 (Reuters) – Extreme weather events and a shortage of labor and materials for repairs will drive property insurance rates up over the next few years, the insurer’s chief executive said on Tuesday American dwelling Hippo.
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 the purchase of lumber.
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.
Hippo announced in March that it would go public thanks to a $ 5 billion merger with a blank check company backed by Silicon Valley heavyweights Reid Hoffman and Mark Pincus, a sign of growing interest in the industry. rapidly growing “insurtech”.
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, thereby 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 here
Reporting by Noor Zainab Hussain in Bengaluru and Carolyn Cohn in London; Editing by Lisa Shumaker
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