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Greetings and Good Wishes to all. We hope you had a great week. It was certainly another interesting one in insurance and we are following Root layoffs, A sizable insurtech acquisition by Great American and the start of earnings announcements. Here are the three things we learned: |
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Root Massive Layoff Root Insurance laid off 330 employees on Thursday roughly 20% of their workforce, that is quite a significant number and would seem to be bad news for the public insurtech ‘unicorn’. It does point the a pivot in their strategy of pursuing independent agent and other non-digital channel distribution. Most of the affected employees were inside sales and claims along with a few technical engineers. It was another rough week in the stock market and many of the public insurtechs shares are near bottom. Not surprising given the profitability challenges they have. Ofir Dor at Globes provides further analysis in: What happened to the revolution. |
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Great American Drops $120M in Cash American Financial Group parent of Great American Insurance announced the acquisition of insurance AI provider Verikai, Inc for $120M in cash. They must believe in the power of the technology to help them in the underwriting and risk selection areas. AFG has not invested much in insurtech and this is a pretty big single investment. Verikai is a 4+ year old insurtech and now has a platform to leverage their solution. AFG could use this new asset and keep for themselves or package to sell to others in the industry. |
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Earnings Begin With Travelers The first big earnings report for 2021 was Travelers whose news featured record breaking Q4 numbers and an overall profit of $3.662B for the year. Commercial lines powered much of these results while personal lines continue to struggle with a crowded and competitive marketplace. Meanwhile there was another big earnings headline from home insurer startup Kin who released preliminary 2021 results. They show 320% growth with over $100M in managed premium but this is all top line and no profitability details were shared. Key will be how their combined ratio looks or are they in the same boat as other public insurtechs? |
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