3 Things – Fronting Focus, Insurtech Pivots / Partnerships & Maui Losses

Hello Friends!  Here we are again.  The fronting insurance sector continues to be a focus, insurtechs are pivoting and partnering while Maui losses are revealed along with overall losses continuing to be a major issue with waning hope of slowing down.  So as always, we try to bring you the story of the insurance industry, let’s delve into the three things we learned this week:


Fronting Sector Continue to be a Focus

Fronting companies continue to be a big focus in the insurance industry.  Many that have avoided trouble are keen on how to address the risk associated with their capital and distribution partners.  Trisura who back in March was forced to take an impairment because of an issue with their capital backing was able to secure a $50m bought financing deal.  This new capital will help them grow and expand and seems to be a sign that their trouble has passed.  Meanwhile, in the story that has dominated the headlines lately, Vesttoo has filed for Chapter 11 bankruptcy protection and is working on a settlement with Aon to appoint provisional liquidators to help settle the trouble.  These developments continue to show us that data and transparency are essential areas for insurers to pay attention to.


Pivots and Partnerships for Insurtechs Show Promise

After coming off another difficult quarterly earnings report, Hippo made an announcement this week that they would pause new business.  This confirms what many read as a pivot into their distribution and services businesses where they can rely on fees without having put their balance sheet at risk.  They are fortunate to have these other businesses to help them steer through difficult homeowners insurance market.  Telematics-powered commercial trucking insurtech, Cover Whale announced an exciting partnership with Aon-owned CoverWallet to bring together niche-commercial auto risk coverage with technology-enabled digital distribution.  Both parties will benefit from their specific focuses and targeting in an opportune area for insurance.  The momentum you see with these annoucements continue to feed the idea that the new era of insurtech is having a better time focusing on value instead of disruption.


Maui & Industry Losses Continue

Estimates are starting to come in for the losses experienced in the surprising wildfires in Maui.  This will be a costly event with lots of damage and (re)insurers are bracing for what looks like a multi-billion dollar event.  Meanwhile Progressive showed a better July than previous months with their combined ratio coming down to 90.3%, under their target, as rates take effect and losses abate somewhat.  Allstate continues to have trouble, announcing a tough July with $349 m in losses and providing an update on the progress of rate hike implementation.  Hopes of a slowdown in these types of conditions continue to wane as we are now in August with the peak of the tropical season upon us so concerning for the industry.

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