3 Things – Earnings, SPACs -/+ & Insurtech Hype Cycle – 02/04/2022

Greetings Friends.  It was a big earnings week so we spent a lot of it reading the reports.  Nothing like analyzing combined ratios, operating profits and loss costs to cure your winter blues.  Here are the three things we learned:


Chubb Highlights Another Earnings Week

The venerable Chubb announced a record-breaking operating income of $3.81/share.  In the days of all the window dressing on earnings announcements and disappointed public insurtech investors, they are returning huge profits to their shareholders and have a 85% combined ratio.  Other earnings came from Allstate, achieving strategic priorities with the Nat Gen acquisition showing growth but also hurt by auto loss costs .  The Hartford, whose fundamentals look a lot like Chubb with big profits.  And a struggling Kemper who mentions many turnaround efforts needed to reverse losses.


Insurtech SPACs Come and Go

Metromile used a SPAC vehicle to go public just about one year ago and that journey is nearing it’s end as MILE shareholders have approved the merger with Lemonade It appears this is their best exit with stock trading in the $1-range, but is far from the original plan.  In the same week  a new public SPAC with pet insurance indicated a public SPAC offering.  Despite market headwinds and while many others are canceling their plans to go public, dog walking app and pet insurer Wag announced they will be using a SPAC to go public.  Pet Insurance looks like the right product to embed and make a part of a popular app / service, not the same full stack insurance carrier play.


Insurtech Hype Cycle Over?

With the recent news and stock performance of public insurtechs 2022 is shaping up to be a different year than 2021 as the hype cycle may be nearing it’s trough of disillusionment.  Our friend Ian provides an insightful post.  After reading through earnings this week, it ties together the theme that companies who have built businesses over the long haul are thriving while the fast-growing are showing weakness.

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