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The past 12 months have been volatile for most sectors of the economy. The ongoing Covid-19 pandemic continues to challenge healthcare systems and businesses globally, and the impact of climate change will only make matters worse. Despite these challenges, insurers that protect customers from major risks have had a good year, especially in the stock market. The U.S. Insurance Company iShares ETF has returned 45% in total over the past 12 months, compared with the S&P 500’s 32% return.

“In absolute terms, it’s been a fantastic year,” said Paul Newsome, senior insurance analyst at Piper Sandler.

The biggest change Covid-19 has brought to insurers is the increased reliance on digital tools in sales and claims processing due to the inability to have face-to-face interactions, and a deeper understanding of the mortality rate of consumers sitting on these tools know. Watch reports of devastating deaths from the couch.

Frank Spencer, vice president of life insurance sales at Nationwide Mutual Insurance Company, believes the high number of lost lives in 2021 translates into the highest year for his company’s life insurance premiums, which will be surpassed in 2022.

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“Unfortunately, because of the pandemic, the American public is very sensitive to death,” Spencer said. The rush to life insurance isn’t the only major shift during the pandemic, as the face-to-face interactions that were once a vital part of the insurance industry have increasingly been replaced by app-based claims, online billing and other means of social distancing. Far from the age of necessities, virtual alternatives.

“By 2021, we may have five years of digital adoption,” added Spencer. According to Beth Riczko, president of Nationwide Property and Casualty Insurance, the change is not due to the company’s technological innovation, but to consumers opting for tools developed long before lockdowns and mask requirements. “Before Covid, the industry was very focused on building digital skills, but adoption was a bit slow,” she added.

Riczko said the growing insurtech sector also played a role, with many legacy companies such as Nationwide partnering with these startups to expand their digital suites.

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Some of the technological advancements in the industry are well suited to the unique circumstances of the past 18 months. For example, Nationwide and some of its competitors use telematics technology that allows drivers to share data about their car usage and driving behavior, and insurance providers can create tailored policies based on that information. The technology enables the Columbus, Ohio-based insurer to offer a mile-by-mile plan at a time when most people are spending more time at home, a proposal Riczko uses for his own family, which actually It is related to the foundation of the company.

Nationwide originally started in the 1920s as the Farm Bureau Mutual auto insurance company with the idea of ​​providing farmers with auto insurance more suited to their driving habits, at a time when many in dense urban areas were being charged similar rates to their counterparts.

To determine which companies serve consumers the best, we partnered with Statista to survey more than 16,000 customers and collect their feedback on the performance of these companies.

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The five nationally recognized 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 received the highest ratings in the survey, ranking first for permanent life insurance, term life insurance, homeowners and renters, and second only to Seattle-based PEMCO for auto insurance.

The rankings also look at some of the smaller segments of the industry, including the growing pet insurance segment, which recently sold more than $2 billion in gross premiums in 2020 due to the pandemic’s pet adoptions, according to North American data Health insurers, at a record level for the Association. There are also 20 companies recognized in the dental insurance category, which could face upheaval if the proposed terms to include dental, vision and hearing under Medicare under the Build Back Better program are passed.

Insurers are also eyeing provisions in the Build Back Better program, which would expand access to long-term care services under Medicaid. These policy changes discussed in Washington, D.C., have been implemented nationwide in Washington state, which imposes a mandatory income tax on residents without long-term care insurance. Long-term care is a key business for some of these insurers and was a major topic of discussion at the height of the pandemic, when assisted living facilities were ravaged by the virus.

As vaccines and treatments are developed and America’s immunity improves, the light at the end of the Covid tunnel is starting to take shape, and the industry is focused on another major global crisis that will change the way it works: climate change. As extreme weather conditions worsen over the next century, the scientific consensus that wildfires, floods and hurricanes will increase in frequency will be accompanied by increased liability and insurer payouts. The reality of climate change has impacted insurers already paying claims and on the ground dealing with everything from wildfires in California to an active hurricane season in the Southeast to a deep freeze in Texas.

“Weather trends and catastrophic events are critical to the insurance industry,” Riczko said. “Internally, it’s about making sure we have enough capital to meet the needs of our customers and making sure we’re ready to respond, no matter where the incident occurs.”

Despite the challenges, Brett Horn, senior equity analyst at Morningstar, sees the outlook as positive for the insurance sector, as inflation and lower interest rates make higher prices necessary.

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