3 Things – Cyber Fortified, Scaling Losses & Q3 Earnings Resilience

Hello Friends!  Welcome to the latest pulse from the heart of the insurance industry! Fresh off the week in Las Vegas attending Insurtech Connect 2023, and I must say, the energy was electric. The bustling corridors of the world’s largest insurtech event were a testament to the industry’s relentless innovation and the collective drive toward shaping a bold new future. Between the insightful panels and the valuable connections forged with fellow industry colleagues, it’s clear we are continuing to transform the industry. This edition is brimming with insights and reflections from the conference, laced with strategic movements rippling through our sector, let’s delve into the three things we learned:


Cyber Fortified, Strategic Plays

In a bid to supercharge its cyber insurance capabilities, Travelers Companies, Inc. has swooped in to acquire Corvus Insurance Holdings, Inc., laying down a cool $435 million. This move isn’t just adding to Travelers’ arsenal; it’s a game-changer, weaving Corvus’s trailblazing tech and hefty $200+ million business book right into the heart of its operations. Hot on their heels, Cowbell Cyber is making some noise of its own. With a 49% surge in their customer base and a plump $148 million total financing to date, they’re painting a vivid picture of the cyber insurance landscape’s health and hustle.

With NEXT Insurance pocketing a fresh $265 million, the race is on to serve the 33 million U.S. small businesses with AI-driven insurance finesse. Tiptree is eyeing the stock market runway for Fortegra, while Hamilton Insurance Group’s IPO ambitions signal robust confidence in the industry’s draw in the public eye. Mission Underwriters appointment of former bolttech CEO Jim Dwane spells a new era of tech-savvy expansion. These are the strategic plays defining the future as the industry dances to a tune of innovation and strategic adaptability.


Insurtechs Balancing Innovation Amidst Scaling Losses

The ‘Big 3’ public insurtechs — LemonadeRoot, and Hippo — unveiled their Q3 results this week, revealing the stark challenges they face within the financial vise of the current economy. Root’s enhanced loss ratio and Hippo’s premium growth offer glimmers of progress, yet both are overshadowed by significant net losses and a relentless push for efficiency. Similarly, Lemonade is growing customers and premiums, but these strides are dampened by the persistent losses they bear. They all find themselves at a critical juncture; their paths to breakthrough are narrowing. With dwindling cash reserves and profitability still a distant prospect, their every move is consequential.

Elsewhere, Vesttoo’s intention to sell assets is an endgame move, shifting from turbulent times towards leveraging their AI and machine learning assets. This move aims to harness their technological innovation as a life raft to float away from the fraud induced ship wreck. These narratives spin a tale of a sector in full-throttle search for stability — even as operational pressures rise high.


Q3 Earnings Trends Demonstrate Resilience

Arch Capital reported a notable increase in net income to $713 million for its shareholders, attributed to robust underwriting performance and substantial premium growth. CNA posted a solid net income of $258 million, adeptly managing the market’s challenges. Their proactive adjustments in long-term care insurance, including rate increases and policy count adjustments, have positioned them well for future stability.

AIG is making strategic moves to confront the pressures of inflation, focusing on its core insurance offerings by divesting non-essential assets. Trisura Group is creating new alliances and capital strategies in response to unpredictable Q3 forecasts, aiming to bolster their market position. Allstate is exploring options to divest its health and benefits business, aiming for a leaner structure that enhances shareholder value.

Progressive has seen a 10% increase in policy count, leading to a net income of $1.12 billion. Their efforts to improve their combined ratio have set them on a path for continued financial improvement. The Hartford is showing a strong performance in personal lines, leveraging economic conditions to aim for leadership in commercial lines outside of liability coverage. Finally, Ryan Specialty is achieving robust organic growth complemented by strategic acquisitions, positioning them for continued success.

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!