The Top Insurance News Stories of the Year 2015

The year 2015 was a year during which the property/casualty insurance industry got a glimpse at its future in the form of disruptive forces, new competitors, new leaders and emerging risks. Also, some of the news revived long-running stories. It was a year when insurance professionals turned in record numbers to the news and features on InsuranceJournal.com to keep up with developments. Judging by readership numbers, they found these stories the most important and interesting of 2015.

1. The ACE-Chubb Marriage

The biggest story of the year – ACE’s $28.3 billion acquisition of Chubb – broke on July 1 and the story and its offspring have been grabbing readers’ attention ever since. ACE shareholders will own 70 percent of the combined company, while Chubb shareholders will own 30 percent. The news sparked questions about competing offers (Chubb said it didn’t seek any and Travelers said it passed on the opportunity). The deal is expected to close in the first quarter 2016, although ACE CEO Evan Greenberg has acknowledged that integration will take years. He also vowed that the “new” Chubb (the merged entity will assume the Chubb name) will preserve the “old” Chubb’s agency culture. Greenberg has been methodically unveiling his organizational structure and management teams for the post-merger company. The deal has been approved by shareholders (who nixed an $80 million golden parachute for retiring Chubb CEO John Finnegan) and antitrust watchdogs.

2. Google’s Auto Insurance Entry

Insurance Journal was among the first to report it on Jan. 15: Google Poised to Enter U.S. Auto Insurance Market and again on March 5 when it actually happened: Google Compare for Car Insurance Has Arrived. This news continues to stir reaction with some downplaying the entry (Google will face the same obstacles faced by others selling insurance online and Google is duping customers), and others warning agents not to take it lightly and telling agents that if they aren’t scared of Google, they should be.

3. Cyber Risk Evolution

No risk topic generated more worry than cyber, even though, or perhaps because, it is still evolving. One of the top cyber stories asked, just how costly and fast-growing is cyber risk? Much of the news supplied answers. Cyber was at the top of their list of concerns by CEOs and the public. There were data breaches at Anthem and VTech (and elsewhere that did not make the news because breaches have become so commonplace). More than four in 10 medium sized businesses reported having a breach. Experts worried about potential breaches affecting every type and size of organization or connected thing. By close of year, there was some progress to report: cyber underwriting had moved from “toddler” to “teen” as insurers learned from their claims.

4. CEO Successions

This year has been a year when for a variety of reasons, including planned retirements, shareholder pressures and, unfortunately, serious illness, a surprising number of high-profile CEOs stepped down, opening the door for new leaders at the helm of some of the industry’s biggest brands. Two of the industry’s giants – Hartfords’ Liam McGee, 60, and AIG’s and MetLife’s Robert Benmosche, 70, passed away in 2015 after battles with cancer. They had passed their batons to their successors – Christopher Swift and Peter Hancock – before their deaths. In August, Travelers CEO Jay Fishman citing his ALS symptoms, stepped down, replaced by insider Alan D. Schnitzer. William R. Berkley, founder of W.R. Berkley Corp., stepped aside this year as planned; his son, W. Robert Berkley Jr., took control. Also in the Class of 2015 was Michael Tipsord, who succeeded State Farm’s long-time CEO Edward B. Rust Jr. in September. This month, Zurich Insurance Group’s CEO Martin Senn resigned. Ohio-based State Auto Financial Corp. and State Auto Mutual Insurance hired Michael LaRocco as president and CEO, replacing Robert Restrepo Jr. Frederick H. Eppinger, 56, CEO of The Hanover Insurance Group, announced this fall he is stepping down to pursue other interests. Vermont Mutual’s William Catto retired in June, when he was succeeded by Daniel C. Bridge. Citing personal reasons, Manny Rios resigned as CEO of American Modern in August. Others to step down in 2015: USAA’s Josue Roble; Ohio Mutual’s Jim Kennedy (succeeded by Mark Russell) and NCCI’s Stephen Klingel (who will be replaced by Swiss Re’s William Donnell this month). There are more changes coming in early 2016. Markel Corp. reported that, Thomas S. Gayner, 53, and Richard R. Whitt, III, 51, will serve as co-CEOs starting in the new year. As the ACE-Chubb deal closes, Chubb CEO John Finnegan will retire and Chubb’s Dino Robusto will join CNA Insurance to succeed CEO Tom Motamed when he retires next December. Also ACORD’s Greg Maciag intends to retire in January and Erie Indemnity’s Terrence Cavanaugh and Kemper CEO Donald Southwell plan to retire in 2016.

5. Disruption and Innovation

In addition to being glued to the Google news, readers were drawn to the stories predicting major change ahead. They included the prospect of driverless cars and on-demand services erasing as much as 60 percent of the auto insurance market; how wearable devices collecting real-time data could disrupt workers’ comp and claims management and other segments of the industry; and how drones could revolutionize claims and risk management. Marketers have lost control of insurance buying and soon, small groups of people could be running their own insurance companies. It has all convinced the industry to finally take the need for innovation seriously.

6. Workers’ Comp’s Grand Bargain

National Public Radio and ProPublica launched an investigative series on the workers’ compensation system that questioned whether reforms in states have changed the system to the point where it no longer serves as a fair trade-off and exclusive remedy for injured workers who give up their right to sue.

7. Greenberg’s Beef with AIG Bailout

The $85 billion AIG bailout was in 2008 but the headlines have continued. This year saw Maurice Greenberg, former AIG CEO and now CEO of Starr, win his long-shot court fight over his claim that the government’s bailout terms were unfair to AIG shareholders including Starr. U.S. Court of Federal Claims Judge Thomas Wheeler agreed, ruling the Federal Reserve set illegal conditions for the $85 billion rescue loan to AIG in 2008, though he didn’t award damages. Greenberg is still trying to get damages.

8. Weather Watching

The industry always follows the weather closely. The continuing California drought, including the related wildfire threat, topped the bad weather news. The Atlantic hurricane season stayed below normal with 11 named storms, while the eastern and central Pacific were above normal with both regions shattering all-time records.

9. Obamacare Ongoing

Obamacare remains controversial in certain circles and every story brought reader comments, whether it was about progress, a setback, an enrollment marker, religious complaint or another vote to repeal. The most popular story: “How Long Will Health Insurers Remain Patient with Obamacare?”

10. Auto Insurance Pricing

Whether it was Geico and Allstate raising their auto premiums, auto insurers’ losses mounting, or the debate over of price optimization, the competition in auto insurance was on the minds of readers.

Other Popular Stories of 2015: The Supreme Court ruling on gay marriage; the Willis-Towers Watson merger; Uber worker classification; calls by activist investor Carl Ichan to split AIG into three companies; continued downward pricing for re/insurance; and renewal of the federal terrorism reinsurance program.