Hi Friends! What a week it has been. Insuretech Connect 2024 was ‘as advertised’, the top gathering for insurance and technology professionals. We had a great time meeting everyone in person and making new connections. Meanwhile, outside of the conference, the insurance world still turned and there were stories to follow. Q3 2024 earnings reports are beginning to reveal the impact of the cat season with recent storms and other unpredictable weather trends, insurtechs are making news with partnerships and fundraising, and it wouldn’t be a week if we weren’t viewing the launch of new MGA operations. This will be a topic next week at the Target Markets Annual Summit. For now, let’s dive in and explore the three things we learned this week. |
Insurtech Partnerships and Funding Drive Innovation in Auto and CyberThis week highlighted several significant partnerships and funding events, particularly targeting auto insurance through usage-based models and tech integration. These initiatives reflect growing innovation and efficiency in the insurance space, leveraging technology to offer streamlined, embedded solutions. Coterie Insurance has launched a new cyber insurance offering in collaboration with Berkley Re Solutions and TransUnion. The partnership includes fraud protection, identity monitoring, and cyber incident management through TransUnion’s Cyberscout services. Agents and brokers can easily add cyber coverage alongside other policies through Coterie’s platform, enhancing protection options for small business clients. Root Insurance has partnered with Arity to enhance its usage-based insurance (UBI) model, using Arity’s Drivesight technology to improve its telematics data. The integration allows Root to access driving behavior data to generate personalized insurance quotes for customers with an Arity score. This update, which applies to all new policies, will enable customers to use existing driving data or undergo a test drive to determine their insurance rates. Lemonade has partnered with Toyota Insurance Management Solutions (TIMS) to enhance its insurance offerings, aiming to cross-sell home and renters insurance alongside auto policies. TIMS operates as an independent agency, working with carriers like Hartford and Liberty Mutual, and offers a branded auto insurance product powered by Toggle. This partnership emphasizes Toyota’s focus on usage-based insurance (UBI), allowing drivers to share data in exchange for personalized quotes based on driving behavior. INSHUR has secured $19 million in a funding round led by Viola Growth, bringing its total funding to $78.5 million since 2019. The company aims to scale its US operations and strengthen partnerships with on-demand platforms like Uber and Amazon Flex. The new funds will support INSHUR’s global expansion and improve technology, customer satisfaction, and underwriting performance. Ascend has partnered with QuoteWell, a commercial insurance MGA and wholesale brokerage. This partnership aims to streamline the quoting process for non-admitted markets by integrating QuoteWell’s submission and quote technology with Ascend’s automated payment and financing tools. The goal is to simplify the traditionally complex and time-consuming process of handling non-admitted insurance, improving efficiency for agents and brokers. |
MGA Launches Signal International Growth and Niche Market FocusThis week saw multiple MGA ventures with ties to US and UK markets, led by industry veterans targeting specialized risk segments. These ventures reflect continued momentum in delegated underwriting authority, showcasing optimism for future growth in niche sectors like renewable energy and dairy farming. Beat Capital Partners has launched Fallow Grove Insurance Services in the U.S., led by Brett Dupre, former CUO of CrossCover. Fallow Grove will focus on providing specialized commercial property insurance solutions for the middle market, including coverage for flood, industrial, builder’s risk, and general property. The MGA is backed by a consortium led by Beat Syndicate 4242 at Lloyd’s and aims to serve clients through wholesale brokers with tailored insurance products. In related news, Ambac Financial Group has received shareholder approval to sell its legacy financial guarantee businesses to funds managed by Oaktree Capital Management. This clears a major hurdle in Ambac’s strategy to transition into a specialty property and casualty insurance platform. This move allows Ambac to focus on its evolving business model and growth in the P&C sector. Mission Underwriters has launched Carrow Insurance, a multi-class MGA led by Ronan Conboy, former CEO of AmTrust International. Carrow will focus on offering Warranty, Accident & Health, and Income Protection products across the UK and Europe, with support from Accelerant’s A-rated capacity. The new MGA aims to expand into additional lines in 2025 as part of its growth strategy. DA Strategy has supported the launch of Volt Underwriting, a new MGA focused on the energy transition sector. Volt offers coverage for conventional and renewable energy projects, with an initial capacity of $25 million. The MGA, founded by energy underwriting veterans, aims to scale its offerings as it supports the global shift toward renewable energy. AIR Parametric has introduced a new parametric insurance product for dairy farmers, called Milkshake, in partnership with Guy Carpenter and Liberty Mutual Re. This innovative solution compensates farmers when heat stress, caused by high temperature and humidity, negatively impacts dairy cow milk production. The insurance is triggered by specific weather conditions, such as high temperature-humidity index levels, and offers quick payouts to mitigate the financial losses from reduced milk yield. |
Q3 2024 Earnings Begin and Show Resilience Amid Catastrophe LossesEarnings reports kicked off this week with the usual players featuring with Travelers and Marsh providing a view into expectations for others. Despite significant catastrophe events, it appears that most insurers will report positive Q3 results reflecting industry resilience and preparation for future challenges. Travelers returned to an underwriting profit in Q3 2024, despite facing increased catastrophe losses from wind and hail storms. The company reported a net income of $404 million, with higher investment income helping offset the $850 million in catastrophe losses. Travelers achieved a combined ratio of 101.0%, with an underlying combined ratio of 90.6%, showing improvement. Net written premiums increased by 14%, reflecting strong growth across business segments, including business, bond, and personal insurance. Marsh McLennan reported strong Q3 2024 results, with revenue rising 6% to $5.7 billion and operating income up 11%. Adjusted earnings per share grew 4% to $1.63. The Risk & Insurance Services division saw 8% revenue growth, driven by Marsh’s 9% increase, while Guy Carpenter’s revenue rose 6%. The company also announced the acquisition of McGriff Insurance Services, which is expected to close by year-end, further strengthening its capabilities. In a preview of their upcoming earnings, Allstate reported an estimated $1.7 billion in catastrophe losses for Q3 2024, with $630 million attributed to Hurricane Helene alone. These losses resulted from multiple severe weather events, including wind, hail, and wildfires, reflecting the growing impact of natural disasters on the insurer’s financials. Despite these significant losses, Allstate continues its efforts to raise auto and homeowners insurance rates to improve profitability, with auto insurance rate increases of 9.5% expected to add around $2.46 billion in annualized premiums. Progressive reported a combined ratio of 93.4% for September, with net income of $584.6 million. The insurer incurred $563 million in catastrophe losses, primarily from Hurricane Helene, which accounted for nine points on the loss ratio. Progressive also added around 457,000 new policies in September, bringing the total to approximately 33.86 million, a 14% year-over-year increase. For the first nine months of the year, Progressive achieved a CR of 89.1% and $6.1 billion in net income. |
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! |