Hi Friends! As July rolls along, insurance keeps moving forward. This week featured plentiful Q2 results from insurers along with other news. Strategic movements feature plans to leverage AI and the continued growth of ILS capital vehicles. Value added players are being acquired and partnerships form to take advantage of opportunities in the market. Let’s delve in once again, and explore the three things we learned this week: |
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Strategic Highlights, AI, ILS, Signal Future PlansCarriers are making more strategic moves, and ILS entities have momentum. These stories all indicate themes beyond what is written with anticipated moves coming from the players involved that will point to the future. Markel has partnered with MEA to enhance its underwriting processes using MEA’s GenAI solution, which automates data extraction and reduces manual tasks. This collaboration aims to improve efficiency and service speed for Markel’s clients and brokers, aligning with Markel’s strategic focus on technology transformation. Executives from both companies express optimism about the transformative potential of this partnership. Twelve Capital and Securis Investment Partners have announced a merger to form a leading, independent ILS asset management firm with $7.8 billion in assets under management. The merger aims to combine their talents, assets, and infrastructure, enhancing capabilities in Catastrophe Bonds and Private ILS while maintaining a client-centric approach. Acrisure LLC has appointed John Tuttle, vice chairman of the New York Stock Exchange, as its new president. Tuttle has extensive experience at the NYSE and previously worked in the U.S. Department of State and the White House. Acrisure continues to expand rapidly, with Tuttle’s appointment aligning with its growth and strategic plans, including a potential future IPO. Aspen Insurance has appointed Tony Bishop as Chief Data & Analytics Officer, expanding his responsibilities to include the newly launched Data Labs and Architecture. Since joining Aspen in 2022, Bishop has advanced the firm’s Data and AI strategy, including a pioneering partnership with Microsoft. Under his leadership, Aspen aims to leverage data and AI to enhance customer experience, optimize operations, and drive innovation. Liberty Mutual Strategic Ventures (LMSV) has launched its second venture capital fund with $200 million to support entrepreneurs in the P&C insurance industry. Building on its initial $150 million fund from 2015, LMSV will focus on early-stage investments in AI, Data and Automation, Cybersecurity, Energy Transition, and Mobility. |
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Acquiring Value Players and Building PartnershipsMergers and partnerships continue to build momentum. Value players are being acquired, and relationships are formed to target opportunities in the market to build innovative platforms for pricing and distributing insurance and covering niche risks that require unique coverage and capitalization options. Applied Systems has acquired Planck, a leading AI company for the insurance industry, to significantly enhance its AI capabilities across its global product portfolio. This strategic acquisition aims to accelerate Applied’s vision of transforming the digital insurance lifecycle, providing greater value to agencies, carriers, and clients by integrating advanced AI to improve business processes and efficiency. Applied’s CEO, Taylor Rhodes, emphasized the investment in AI to reduce inefficiencies and unlock data value, positioning Applied as a leader in AI-driven insurance solutions. Private Client Select Insurance Services (PCS) has partnered with Ryan Specialty for exclusive wholesale brokerage of high-net-worth and ultra-high-net-worth business in the U.S. AIG will continue to provide underwriting authority and allocate additional capacity, with exclusive E&S paper through Marbleshore Specialty Insurance Company. This partnership aims to enhance PCS’s capabilities and service delivery, positioning it as a top managing general underwriter in the high-net-worth market. Cowbell, a cyber insurance provider for SMEs, has secured a $60 million Series C investment from Zurich Insurance Group. This funding will help Cowbell scale operations, expand into new markets, introduce new products, and enhance cyber resilience services. This partnership underscores Zurich’s commitment to advanced cyber protection and aligns with Cowbell’s mission to enhance cyber resilience for SMEs globally. |
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Carriers and Brokers Continue Strong Performance and AdaptabilityEarnings took center stage this week with numerous reports highlighted by Chubb and others from the P&C carrier space along with major broker entities including Aon and Willis. The common themes of growth in commercial, E&S and transformation in personal lines are juxtaposed along with the catastrophe losses and other market conditions. Chubb Ltd. CEO Evan Greenberg reported that financial lines underperformed in Q2 2024, while the company saw robust growth in other areas, particularly general and life insurance in Asia-Pacific. The combined ratio worsened to 86.8 due to higher catastrophe losses. Despite challenges in financial lines, Chubb experienced strong growth across most segments. W. R. Berkley reported record net premiums written of over $3.1 billion and a 52% increase in net investment income in Q2 2024. The company’s combined ratio for the quarter was 91.1%, and return on equity was 20%. The company anticipates continued investment income growth and strong returns for shareholders. Cincinnati Financial CEO Steve Spray described a generational shift in personal lines, with the company expanding into high net worth and excess and surplus business. Despite a 42% drop in Q2 net income to $312 million due to decreased net investment gains, the company remains confident in its pricing strategy. The personal lines segment saw an underwriting loss of $42 million, though rate increases continue in personal and commercial lines. The Hartford reported a significant increase in Q2 net income, rising to $733 million from $542 million the previous year, driven by gains in commercial lines underwriting income. CEO Christopher Swift highlighted the robust growth and profitability in commercial lines, while personal lines showed progress towards target profitability. Aon plc CEO Greg Case highlighted the acquisition of U.S. middle-market broker NFP Corp. The acquisition, closed in April for $13 billion, boosts Aon’s growth, especially in the health market, and is expected to add $175 million in net revenue synergies by 2026. WTW has raised its earnings targets for 2024 following a rise in Q2 net income to $142 million, up from $96 million the previous year, driven by higher revenue in the risk and broking segment. CEO Carl Hess highlighted robust organic growth and operating efficiency. The company also announced increased cost savings estimates and raised its full-year targets for adjusted operating margin and EPS. Brown & Brown Inc. CEO J. Powell Brown noted pricing moderation in property insurance lines as the storm season progresses, with rate increases for primary casualty layers remaining high. The broker saw 10% organic revenue growth, driven by strong performance across retail, program, and wholesale segments. While property rates have moderated, especially in catastrophe-exposed areas, primary and excess casualty rates continue to rise between 1% and 10%. RenaissanceRe reported a significant increase in Q2 net income available to shareholders, rising to $495 million from $191 million the previous year, driven by the acquisition of Validus Re. CEO Kevin O’Donnell highlighted the strong performance across underwriting, investment, and fee income, attributing the successful quarter to the favorable business environment and the Validus acquisition. RLI reported a significant increase in Q2 2024 underwriting income, rising to $70 million with an improved combined ratio of 81.5, up from $41.2 million and 87.2 in Q2 2023. CEO Craig Kliethermes highlighted the balanced growth and the strength of RLI’s diversified portfolio and underwriting-focused business model. |
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! |