3 Things – Gallagher InsurTech Report / HDVI Funding, Vouch / Convex Expansions & AIG / Arch / Other Earnings

Hi Friends! We hope everyone is enjoying the holiday weekend and a much-needed time after the first 6 weeks of 2025 are behind us. Happy Valentine’s to all the Lovers out there, and it’s always welcome to have a Monday holiday to celebrate U.S. presidents. This week, we are following insurtech funding trends highlighted by a significant investment in HDVI. Vouch makes an acquisition while Convex launches a new Lloyd’s Syndicate to expand underwriting platforms. AIG and Arch were among the many weekly earnings reports, with AIG CEO Peter Zaffino commenting that we could see over $200 billion in cat losses in 2025. Let’s dive in and explore the three things we learned this week.

Gallagher InsurTech Funding Report, HDVI Secures Growth Capital

While global InsurTech funding dipped to a seven-year low in 2024, investor appetite for innovation remains strong, particularly in AI-driven and efficiency-focused solutions. Gallagher Re’s latest report highlights a shift in capital allocation, favoring startups with clear paths to operational impact despite an overall funding decline. Despite this downturn, early-stage investments and average deal sizes showed resilience, indicating sustained investor interest in emerging InsurTech ventures.

An example, High Definition Vehicle Insurance (HDVI), a technology-driven commercial auto insurance provider, has secured $40 million in growth capital, bringing its total funding to over $87 million. This investment will enhance HDVI’s telematics-driven products, expand coverage, and improve tools for insurance agents as the company scales nationwide. Concurrently, HDVI has expanded its reinsurance capacity by partnering with additional reinsurers, bolstering its underwriting capabilities.

Vouch Strengthens Startup Insurance, Convex Enters Lloyd’s New Syndicate

Vouch, a leading business insurance provider for startups, has acquired StartSure to enhance its insurance offerings for early-stage companies. Concurrently, Vouch announced the initial close of its Series D funding round. These strategic moves aim to strengthen Vouch’s position in the startup insurance market and expand its capabilities to better serve emerging businesses’ unique needs.

Convex Group, an international specialty insurer and reinsurer, has announced the launch of Syndicate 1984 at Lloyd’s, marking a significant expansion into the Lloyd’s market. This strategic move will leverage Lloyd’s extensive global network and infrastructure to enhance Convex’s underwriting capabilities and access to diverse specialty risks. The establishment of a Syndicate reflects Convex’s commitment to broadening its market presence and delivering innovative insurance solutions within the Lloyd’s marketplace.

AIG Surges While Arch and CNA Navigate Catastrophe Headwinds

The fourth-quarter 2024 earnings reports from major insurance companies reveal mixed results. A central theme is the significant impact of natural catastrophes, such as the California wildfires, which have notably influenced underwriting results and profitability across the industry. Despite these hurdles, firms have demonstrated robust underwriting performance, strategic capital management, and growth in net premiums written, underscoring the sector’s adaptability and financial strength.

AIG achieved net income of $898 million in Q4 2024, a significant increase from the previous year. This improvement was driven by strong underwriting profitability and strategic capital management, including substantial share repurchases and debt reduction. CEO Peter Zaffino warned that the wildfires in Q1 2025 could ‘recalibrate the entire industry.’

Arch Capital experienced a decline in net income to $925 million, down from $2.3 billion in the prior year, largely due to elevated catastrophe losses from events like Hurricanes Milton and Helene. Nevertheless, the company maintained a solid combined ratio of 85%, highlighting effective underwriting practices.

CNA reported a decrease in net income to $21 million, primarily due to a $290 million after-tax loss from a pension settlement transaction. However, their P&C segments achieved a core income of $451 million, reflecting higher investment income and underlying underwriting gains despite increased catastrophe losses.

Cincinnati Financial Corporation reported a net income of $405 million, a decrease from $1.183 billion in the prior year, attributed to lower investment gains. Despite this, the company saw a 17% increase in net written premiums and an improved combined ratio of 84.7%, driven by strong underwriting results and premium growth initiatives.

Join us as we continue to explore the headlines and news shaping the insurance sector, and stay tuned for more insights on the unfolding narrative of our industry!  Stay productive, stay safe and stay in touch!