3 Things – Q4 Result Previews, Hippo/Kin Positives & Small Commercial Launches

Hello Friends!  This week we are following Q4 result previews, Hippo and Kin have good news and small business insurtech launches.  Here are the three things we learned:


Q4 2022 Result Previews

As earning season begins, big insurers are previewing the cat losses they expect as they move on from a tough quarter.  Allstate warns their Q4 loss could reach $335M based on heavy cat losses which are estimated at $779M.  Despite these difficulties Allstate stock is performing well as our friend Ian points out, defying that fundamentals matter.  Travelers also got ahead of their earnings stating they expect to see cat losses total $459M.  Early on, it appears that the double whammy of Hurricane Ian and Winter Storm Elliott take a large chunk out of insurer earnings. It has been a mild January in many parts of the US and NOAA reported that 2022 was one of the warmest years since the late 1900s so climate uncertainty will remain front and center as we look ahead.


Hippo and Kin Have Good Weeks

Despite a difficult environment for home insurers, both Kin and Hippo had positive weeks.  Hippo stock has been on an upward trend, they reported their reinsurance renewals were successful despite being in one of the toughest markets in a generation.  They have secured the outcome that will provide ‘reinsurance protection against larger losses from major catastrophes to ensure our financial stability’.   They still face a difficult road along with their peers to reach profitability though their digital assets could make them an acquisition target for an established carrier.    Fellow insurtech home startup Kin Insurance launched in South Carolina, a top 10 state for hurricane risk.  Using the reciprocal exchange they created last year points to a strategy and potentially emerging opportunity for new entrants to the coastal market if they can price the risk appropriately but still enable the consumer to afford the premium.


Small Commercial Product Launches

Embroker, a digital business insurance platform, has launched ONE, an application that uses AI and to generate business products for startup businesses.  They are able to generate quotes based on the answers from 14 questions but notably cyber is not included among the coverages available.  We must give them credit for streamlining the application process and target a growing niche in the small commercial space.  A year ago they acquired AdvisorSmith a small business financial service site and may be able to leverage their assets in this new environment.  FloodFlash, launched this week in the US.  They have a parametric flood insurance product for small business commercial property.  They will target an underserved market and offer claim payments based on the level of depth determined by IoT sensors and computer models.  The North American CEO is an insurance distribution veteran with recent experience from Bold Penguin and Mylo-by-Lockton.

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