3 Things – Coalition Acquires, Insurtech Earnings & Exits

Hello Friends!  We took a break last week and are now back catching up on all of the news in the insurance industry.  This week’s edition features a Coalition acquisition, insurtech earnings and exit announcements… here are the three things we learned:


Coalition Acquires Admitted Carrier

Cyber insurer, Coalition, uses some of their recently raised capital to acquire an admitted carrier with licenses in 50 US states.  Now they will have the capability to underwrite cyber and other admitted products directly without the need for other carrier partnerships like they have used to date.  They will likely introduce new commercial products that would be complimentary to cyber risk such as E&O, D&O and other small to mid-sized commercial.  It is very smart of them to look to diversify their product mix.  The cyber market is growing and still has upside but as we all know an over concentration in a certain risk can spell doom for an insurer.


Insurtech Earnings Recap

Earnings reports have continued throughout the last two weeks.  Most of the traditional carriers have had similar results, not much new has been learned.  It is always interesting to read the results from the 3 public insurtechs:

LMND, has a good quarter of growth, they spent a good portion of their letter to shareholders explaining how they are working towards profitability.  They believe their loss ratio will continue to improve as their book is seasoned and risks diversified.  Their technology will help to get the right risk at the right price.

ROOT had a decrease in gross written premium, is continuing to reduce marketing expenses while seeing the Carvana embedded product generate new business for them.  They successfully completed the reverse split but markets have not reacted well, their stock price continues to drop.

HIPO shows progress toward narrowing their losses while they continue to invest in underwriting technology and smart home tech to help with loss costs.  Key for them will be getting their reverse stock split approved so they can get their share price above $1.


Insurtech Exits

The trend of insurtech exits continues…  Shelter Insurance is shutting down their digital greenfield auto carrier Say, marking the end of an experiment by an established carrier to launch a digital sidecar.  This appears to be due to the tough auto insurance market forcing most carriers to seek double digit rate increases.   Applied Systems, the agency technology company, continues to remain acquisitive acquiring insurtech commercial lines quoting platform Tarmika.  A good exit for the founders of Tarmika at a good time and highlights the strategy of Applied to be innovative in insurance distribution and not just an AMS platform company.  There remains a large opportunity to help traditional agents develop digital capabilities and Applied is taking advantage of the available assets to bolster their position.

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!