3 Things – Amazon Home UK, Chewy / Lemonade & Q3 Earnings

Hello Friends!  It was a big week of news stories and earnings reports to digest.  This week we are following Amazon’s launch of a UK home insurance site, Chewy embedding Lemonade Pet & earnings reports that begin to detail Ian losses:


Amazon Selling Home Insurance

We’ve been hearing for years that personal lines insurers want to emulate an ‘Amazon’-like experience when addressing their customer journey innovation.  Well, they will now get a chance to see how Amazon itself markets and sells insurance with the launch of a UK-based home insurance comparison site.  Embedded insurance is all the rage these days and we know that Amazon’s strategy has long been to be the ‘store for everything’ to it’s users / members.  If they are successful selling insurance like with all things they will look to take a deeper stake in the supply chain and control the products and pricing.


Chewy A Potential Exit for Lemonade?

Chewy and Lemonade announced a partnership this week that will involve embedding Lemonade Pet into Chewy’s CarePlus health and wellness service offering.  Thanks to some good reporting by Coverager, the interesting nugget is that Lemonade has filed with the SEC issuing a warrant for Chewy to purchase 3.3M shares at an exercise price of $0.01 per share.  It will be interesting to see Lemonade’s upcoming earnings report and how hard they will be hit by Ian, we all remember the Texas ice freeze in 2021.  As their shares continue to devalue, will someone like activist investor and Chewy founder Ryan Cohen use their warrants to gain control of the company?


Q3 Earnings and Ian Losses

Travelers was the big earnings announcement of the week.  They estimate a loss from Ian, like most insurers, but despite that have an overall positive Q3 growing their net written premium and controlling their combined ratio.  Many other carriers are starting to get ahead of earnings with announcements of what they expect their Ian losses to be.  Allstate is boosting auto reserves and is warning that 7.8 point spike in combined ratio will be attributed to Ian.  Their projected auto combined is 117.4 further evidence of the hard hit auto segment.  Arch Capital and Everest, two specialty insurers / reinsurers, are both projecting significant losses as well.  From the broker world, Marsh earnings look strong but they see rate hikes ahead.  As more results come in we will see how the impacts of Ian are broad-based.

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