3 Things – System Acquisitions, P&C Combined Over 100 & Openly Raise – 07/01/2022

Hello Friends!  We are back after a week off!  2022 is already halfway complete and we have another holiday weekend ahead celebrating America’s birthday.  This week we are following core systems acquisition news, a total P&C combined ratio heading over 100 and the emergence of Openly with a significant fundraise:


Core Systems Acquisitions

We have been waiting to see major core system vendors spend some of their capital to acquire niche players.  This week there were two interesting acquisitions announced: Vertafore picked up MGA Systems to further consolidate the MGA/AMS space.  This combination makes total sense for Vertafore but eliminates competition and could degrade the service quality for IMS’s customer base.  The big question is how will they handle the platform going forward, invest or just take the annual recurring revenue.  The other big one was Duck Creek acquiring reinsurance provider Prima XL.  Duck has previously acquired a reinsurance platform, DataCede, so now they will have two platforms.  Will they be choosing one or integrating the two together?


P&C Combined Ratio Over 100

S&P released their P&C Insurance Market Report this week.  They are predicting the overall combined ratio for the industry will be over 100 for the first time since 2017.  This is mostly due to inflation, though not affecting all lines of business equally.  Personal lines like auto have some of the highest combined ratios while specialty commercial continues to have some of the lowest.  The auto market will continue to be challenged with inventory and supply chain problems getting worse not better.  The bottom line is that with rate adequacy the overall industry remains on track for a good year.


Openly Fundraise

Openly, a high-end homeowners insurance provider, successfully closed a Series C round of $75M.  They have an independent agent distribution model, different from the likes of Hippo and Kin, that has allowed them to quietly grow their policies in force 500% year over year.  They are not disclosing actual DWP at this time so they still may be small but will use this new capital to expand states and for product innovation.  They are worth keeping track of going forward as they may be at the right place at the right time.  Allowing them to grow into the specialty homeowner space at a time when it is hard to insure coastal property, recent insurtechs are struggling and established players are fighting high combined ratios in their personal lines books.

Thank you for following us, we appreciate your feedback and continued support.  Stay tuned for more info to come.  Until next time… stay safe, stay productive!