Special Report: Top 10 Innovative P/C Insurance Products

A wave of new product offerings is jeopardizing the property/casualty insurance industry’s image as uncool.

Since the beginning of the year, dozens of property/casualty insurers have announced innovative protections for risks involving new technologies, current economic concerns, personal and family relationships, home-based small businesses, and unusual sporting events.

“This is a new era in property/casualty insurance. Innovation is breaking out all over,” said Roger Hurtvig, president of the insurer-backed Insurance Innovation Institute (III) in Las Vegas.

This is an industry with a reputation of being slow to generate or embrace new ideas but the III’s own measure of innovation — the P/C New Products Index — has been rising steadily for the past year and hit a record high of 75 out of a possible 100 points last week.

“It seems that with every day comes a new idea,” Hurtvig said. “”The new products are anchored in traditional insurance principles but they speak to a new generation of risks. It’s very exciting.”

Investors are taking notice.

“Interest in P/C stocks is higher than I can ever remember,” said Joy Gerber, a senior analyst with Barways who has been following P/C stock for two decades. “The industry appears to be shedding its staid image a bit. Investors who never looked at P/C stocks are asking about them.”

Gerber gives insurers credit for their efforts, even while she retains a wait-and-see attitude. “Expectations are high but let’s see if all the innovation sells,” the analyst said.

Of course, that ultimately depends on whether customers, more than insurers or analysts, are excited about the new ideas.

According to III’s Hurtvig, customers don’t typically seek out new insurance products to buy. However, he predicts that as insurers boost their television advertising and golf tournament sponsorships to introduce the new products, customers will respond and sales will jump.

“To be honest, as innovative as the industry is right now, it is in many ways just catching up with a world that has changed and is continuing to change very rapidly,” he said. “Risk is in the air and there is a need for new protections. The industry is poised to cash in.”

So what are some of these new ideas that have put the property/casualty industry’s unhip reputation at risk?

Editors at Insurance Journal searched the insurance market database at www.MyNewMarkets.com and reviewed hundreds of recent insurance company product and program launches and enhancements. The editors found that some of the most original new insurance products are utilizing technology advances, responding to the difficult economic times, catering to personal relationships, and recognizing the explosion in home-based businesses.

According to Insurance Journal, the Top 10 Most Innovative P/C Insurance Products are:

There have also been a number of innovative special events type coverages. Strike Coverage covers the prize money owned when a perfect game is bowled. Eagle Coverage is being marketed by a Florida specialty insurer that wants to expand beyond its hole-in-one coverage. Finally, there is an April Fool’s Policy, which covers reputational damage caused by temporary anger and embarrassment from believing everything you read.

Andrew Simpson, Christopher Boggs and Charles Boyle contributed to this special report.