July 31, 2015

Insurance News Roundup

Liberty Mutual will begin using drones to document fire and natural disaster damage claims, according to the Boston Business Journal. The company had to get permission from the Federal Aviation Administration, which set certain height, weight, and speed limits on the drones.  “The drones will keep Liberty Mutual claims adjusters and contractors safer, the insurer stated, since they won’t have to take the risks of piloting a plane or falling off a ladder during a roof inspection,” the article stated. Using drones to document property damage is another example of how the insurance industry is using emerging technologies.  In May, this blog discussed the use of fitness trackers (e.g., Fitbit) with life insurance policies.

Cigna Deal
According to the New York Times, Anthem has agreed to buy Cigna in a deal worth $54 billion, which includes debt assumption. The deal must still receive shareholder and regulatory approval. According to the Hartford Courant, Cigna has 4,200 employees in Connecticut, while Anthem employs hundreds in Wallingford. The combined company would insure about 53 million people with medical coverage. Earlier this month, Aetna also agreed to purchase Humana. If both deals are completed, there will be three major health insurers in the United States, down from five. “Health insurers are seeking to consolidate to gain greater scale to reduce costs and capitalize on growing opportunities in the government and individual markets,” the article stated.

Prescription Drug Prices
Several states have introduced cost transparency bills to better understand the rising price of prescription drugs, “which are often attributed to high research and development costs,” the New York Times reported. Some bills limit disclosure to drugs costing over $10,000 per year while others require disclosure of development, manufacturing, marketing, and advertising costs, the article stated. Some bills also allow states to act on the disclosed information.  Under the Pennsylvania bill, for example, insurers could refuse to pay for a drug if the manufacturer failed to file the required report. “Most of the bills have not been acted upon, though hearings were held in California and Oregon,” the article stated.