Title insurance provides protection against financial loss
due to defects in a property title. Unlike many other property and casualty (P&C)
insurance policies, where premiums are collected annually or biannually, title
insurance is a one-time purchase at the time the home is acquired or
refinanced, and losses can be reported for 20 or more years. It is more
expense-driven, with most of its premium spent prior to the policy being
Because title insurance is expense-driven, insurtech firms seeking entry into this insurance line should focus on lowering expense ratios instead of loss ratios. Insurtechs have only recently begun to affect the title industry. This presents unique opportunities for new and established insurers in the title space to innovate and gain market share.
In this article, Milliman’s Anne Kallfisch and Dana Ryan consider the
effects that insurtech firms have had on the P&C insurance industry and
whether or not those efforts have translated to title insurance. They also
discuss the opportunities available to insurtechs within the title insurance
The on-demand sharing economy is providing insurance companies an opportunity to develop products for new lines of business. Home sharing, ride sharing, and fashion rentals are three new insurance exposures resulting from the economy. These new exposures present actuaries with several challenges when trying to reserve for their associated risks. In this article, Milliman consultant Dana Ryan discusses the property and casualty (P&C) insurance opportunities and risks of the sharing economy.
Home-sharing companies like Airbnb, VRBO, and TripAdvisor Rentals have become popular lodging options for vacationers and business travelers. Homeowners who rent their living spaces on these websites can generate income. However, renting a home or apartment presents many risks for them too. While some home-sharing companies offer insurance, others do not. This may provide carriers an opportunity to structure unique forms of insurance to cover hosts during rental stays. In this article, Milliman’s Dana Ryan discusses the types of insurance policies home-sharing companies provide hosts and how insurance companies can benefit from this new line of business.
Wedding season is in full swing, and recently I looked into renting a designer dress for a wedding I was attending. I didn’t want to wear a dress everyone had already seen me in, but I also didn’t want to spend a lot of money on a dress I would likely only wear once or twice. Renting a dress seemed like a perfect fit.
Fashion rental companies such as Rent the Runway, Bag Borrow or Steal, and ArmGem are on the rise because of the high expense of designer clothes and the desire to wear the latest fashion. According to a Business Insider article, Rent the Runway has grown since it was founded in 2009 to a company with 5 million members and $1 billion in inventory. With these rental companies growing is there a need for designer rental insurance?
As someone who works in the insurance industry, I started to ponder what would happen if I damaged or lost a rental, some of which can be worth thousands of dollars. If I’m being honest, I am very klutzy. I tend to spill things when I’m eating and have been known to catch a piece of jewelry on my dress, leaving a pull or tear. Immediately my mind tends to think of the worst-case scenarios. What would happen if I accidentally leaned into a candle at the dinner table and left a burn mark on the dress? If I rented earrings, what would happen if one of them fell out on the dance floor and got lost? What if makeup spilled in the designer bag I rented and destroyed the inside of the bag? Suppose I stumbled in my new heels and scuffed them up or broke a heel. The possibilities seemed endless.
Concerned about the risk of damaging or losing a rental I started to question if I could purchase insurance through the rental company. According to Rent the Runway’s website, an insurance policy can be purchased with a rental for a small fee. This insurance policy covers only minor stains or damages and does not cover theft, lost items, or damage beyond minimal wear and tear. Other companies did not offer any insurance at all.