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Hello Friends! There goes the 1st quarter of 2023. Spring is blooming and conferences are in full swing. It was great connecting and learning in person with industry colleagues in the Big Apple, center of the insurance universe. Headlines this week include large carriers partnering with insurtechs, MGA formation and 2022 underwriting loss details. Here are the three things we learned: |
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Insurtech Carrier Partnerships Two big carriers made news this week with partnerships. Bringing to real life a theme of the Insurtech NY conference ‘Competing on Collaboration’. Waffle a home & auto bundler has partnered with Nationwide and designated them a ‘preferred carrier. Waffle markets other personal insurance products including cyber liability, term life, pet and travel. It does not appear that Nationwide has invested in Waffle but will get the benefit of their digital experience as a distribution partner. Draftrs has launched a digital solution for lawyers, consultants, design professionals and accountants. They can automate professional liability underwriting, binding and services providing professional liability coverage. Markel is the paper behind this offering, giving them a play into the small commercial space with a tech enabled MGA. BTW, having Draftrs has only 2 employees so far on LinkedIn, so an efficient UW operation to say the least. |
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Digital MGA Formation One of the sessions at Insurtech NY featured a distinguished panel who spoke about the Magic Formula for MGA partnerships. A good summary of the discussion is provided here by Business Insurance. With the recent news of front operation Trisura taking a large write down and having that cause negative outlook from AM Best it is with a careful eye that we view fledging MGA operations. Cyber MGA Corvus named a new President this week, a veteran of SiriusPoint. Bringing in a seasoned leader will help as they navigate the market that is changing but still hold lots of opportunity. Lloyd’s operation Convex announced they are backing Skyrisks Limited, an MGA targeting the air mobility sector. The Advanced Air Mobility sector is growing and will have unique insurance needs for this new entity to target with products and coverages. |
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UW Loss for Industry in 2022 Verisk and the American Property Casualty Insurance Association (APCIA) issued a summary of overall sector results that matched up with A.M. Best from earlier this month. The P&C industry as a whole experienced a $26.9 billion new underwriting loss in 2022. The largest loss incurred since 2011 and a significant drop off from 2021. Fortunately the industry is still generating a net income of $10.3 billion thanks to rising interest rates which look to continue into 2023. It appears that the most permanent damage caused was to many carrier’s surpluses. Reading individual carrier results we noticed many large decreases in surplus assets and this report describes a nearly $75B decrease took place across the entire sector. That will certainly weaken many of the smaller carriers who will need years to replace the lost assets. |
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