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Insurance companies in America update daily 2022

Insurance companies in America update daily 2022

For most sectors of the economy, the last 12 months have been tumultuous. The lingering Covid-19 pandemic continues to challenge healthcare systems and businesses worldwide, and the effects of climate change have only made matters worse. Despite these challenges, insurers, companies that are employed to protect clients against major risks, have had a good year, especially when it comes to the stock market. Over the last 12 months, iShares U.S. Insurance company ETF has had a total return of 45% versus a robust 32% return for the S&P 500.

Insurance Companies In America Update Daily 2022

Insurance Companies In America Update Daily 2022

Insurance Companies In America Update Daily 2022

“On an absolute basis it’s been a great performance this year,” says Piper Sandler’s senior insurance industry analyst Paul Newsome.




The biggest change brought about by Covid-19, for insurers, has been an increased reliance on digital tools in sales and claims processing, in the absence of face to face interactions as well as a deeper awareness of mortality from consumers who have sat on their couches and watched news coverage of devastating death tolls.

Frank Spencer, vice president of life insurance sales for Nationwide Mutual Insurance Company has seen the massive loss of life translate to the biggest year of life insurance premiums for his company in 2020 with 2021 set to surpass that high watermark

“Sadly, because of the pandemic the United States population is very much aware of mortality,” Spencer says. A run on life insurance hasn’t been the only major shift during the pandemic as the in person interactions that used to be a major part of the insurance industry have been increasingly replaced by app-based claims, online billing and other virtual replacements that have become a necessity in a time of social distancing.

“We probably got five years worth of digital adoption in 2020,” Spencer adds. That change was less a product of technological innovations by the companies and more so consumers opting to use tools developed well before lockdowns and mask mandates, according to Beth Riczko, president of property and casualty personal lines at Nationwide. “In the industry, there was a strong focus on building digital capabilities, pre-Covid, but adoption was somewhat slow,” she adds.

The growing field of insurtech has also played a role with many legacy firms like Nationwide partnering with these startups to add to their digital suite, according to Riczko.




Some of the technological advancements in the industry have been well suited for the unique circumstances of the last 18 months. For example, Nationwide and some of its competitors make use of telematics, allowing for drivers to share data on their auto usage and driving behavior and insurance providers to in turn tailor policies based on that information. This technology allowed the Columbus, Ohio-based insurer to offer pay per mile programs at a time when much of the population was spending much more time at home, an offering Riczko uses for her own family and one that is actually tied to the firm’s roots.

Insurance Companies In America Update Daily 2022

Nationwide was originally founded in the 1920s as Farm Bureau Mutual Automobile Insurance Company with the idea of offering farmers automobile insurance that was more commensurate with their driving habits at a time when many were being charged similar rates to their counterparts in densely-populated urban areas.

Nationwide is among a handful of firms Forbes is recognizing as a best insurance company across five of the seven categories, including auto, homeowners, renters, term life and permanent life in our inaugural list of America’s Best Insurance Companies.

In order to determine which companies were best serving consumers, Forbes partnered with Statista to survey more than 16,000 customers and get their feedback on these companies’ performance.

Joining Nationwide in recognition across five categories are Alfa Insurance, Allstate, American Family Insurance, Erie Insurance, Farm Bureau Insurance, Liberty Mutual, Progressive, State Farm and USAA. San Antonio, Texas-based USAA got the highest ratings in the survey, finishing first in permanent life, term life, homeowners and renters and behind only Seattle-based PEMCO in auto insurance.

These rankings also looked at some smaller sectors of the industry including the growing field of pet insurance, which recently hit record  levels—thanks to pandemic pet adoption— with more than $2 billion in total premiums sold in 2020 according to the North American Pet Health Insurance Association. Twenty firms were also recognized in the category of dental insurance, which faces potential upheaval if provisions proposed under the “Build Back Better” plan to add dental coverage, as well as vision and hearing, to Medicare are passed.

Insurance companies are also paying attention to provisions in the Build Back Better plan that would expand access to long term care services under Medicaid. This policy change being debated in Washington D.C. has already been enacted in some ways across the country in the state of Washington where the state has imposed a mandated income tax on residents who don’t have long term care coverage. Long term care is a major business line for some of these insurance companies and was a major topic of discussion during the worst of the pandemic when assisted living facilities were ravaged by the virus.

While the light at the end of the Covid tunnel takes shape with the development of vaccines and therapeutics and increased immunity across the United States, the industry is focusing on another large-scale global crisis that will alter how it operates: climate change. With extreme weather set to worsen over the next century, the wildfires, floods and hurricanes that scientific consensus says will increase in frequency will come with increases in liability and payouts from insurers. The realities of climate change have already been felt by insurers who have paid out claims and been on the ground to respond to everything from wildfires in California to an active hurricane season in the southeast to the deep freeze in Texas.

“Weather trends and catastrophic events are top of mind for the insurance industry,” Riczko says. “Internally, it’s about making sure that we have adequate capital to meet our customers’ needs and making sure that we are prepared to respond wherever the event occurs.”

Despite the challenges ahead, Morningstar senior equity analyst Brett Horn thinks the outlook for the insurance industry is positive, coming off price increases that were made necessary by inflation and lower interest rates.




Universal life insurance is another type of permanent life insurance that includes a cash value component. The difference between universal and whole life insurance is that with many universal policies you can alter your premiums or death benefits while the policy is active. Here is our rating of the Best Universal Life Insurance policies of 2022.

COMPANY

SAMPLE MONTHLY COST

AM BEST RATING

LEARN MORE

New York Life »

$142.67 A++ See Review »
Northwestern Mutual »

N/A A++ See Review »
Lincoln Financial »

$57.81 A+ Compare Quotes »
John Hancock »

$70.16 A+ Compare Quotes »
AIG »

$46.91 A See Review »




A no-exam, or no medical exam life insurance policy, is exactly what it sounds like, it is a policy that doesn’t require you to take a medical exam to be approved. One of the ways an insurance company determines your premiums is by having you take a medical exam, this helps them to determine how much of a risk you are to insure. Many companies are now offering you the option of a life insurance policy without this requirement. Here is our rating of the Best No-Exam Life Insurance Companies of 2022.

COMPANY

SAMPLE MONTHLY COST

A.M BEST RATING

LEARN MORE

Haven Life »

$81.16 A++ Compare Quotes »
Bestow »

$56.00 A+ Compare Quotes »
AIG »

$46.91 A See Review »
State Farm »

$54.79 A++ See Review »
Nationwide »

$59.94 A+ See Review »

 

To choose the right life insurance company, first consider why you are buying life insurance, what sorts of policies and riders will best help you meet those goals, and which companies offer those products.

Policies: Not all companies offer all types of insurance. For example, Haven Life and Bestow offer term life insurance policies but don’t offer permanent policies such as whole or universal life. Conversely, companies like Nationwide, MassMutual, and Prudential offer all three of those product types as well as policies that don’t require a medical exam.

Coverage: Think about how much life insurance coverage you need. This can help narrow your search. Companies with high minimum coverage amounts could have you paying for more coverage than you need. For example, if you are young with limited or no debt and no dependents, then a policy from a company with a minimum coverage amount of $750,000 might not make much sense. But, if you have a mortgage, a partner who doesn’t work, and/or several dependents who want to go to college, a policy that maxes out at $50,000 might not provide ample financial security.

Riders: Life insurance riders are typically add-ons that help customize a standard policy to better meet your needs. Here is a short list of some typical riders and what they do:

  • Accelerated death benefit — a rider that allows you to access the money in your death benefit before you die, typically in the case of a terminal illness.
  • Term conversion rider — This lets you convert your term type policy to a permanent type of life insurance.
  • Accidental death and dismemberment — Pays a set amount of money for accidental death in addition to the regular death benefit.
  • Waiver of premium rider — If you become disabled this rider lets you waive the premiums for your policy.

Financial Strength: Another thing to consider is whether the company will be able to pay the death benefit to your beneficiary when you die. One way to assess that is by looking at the company’s financial rating. A number of rating agencies, such as AM Best, provide a credit rating score. A credit rating is an indication from the rating agency of whether a company is likely to default on its debts. The less likely a company is to default on its debts the better its credit rating. All the companies in our rating have a credit rating of A or better from AM Best. A high credit rating can indicate that a company is financially strong and will likely be around to pay the death benefit to your beneficiary when you die.




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