Three Things – AI Buzz Cools, Reshaping to Specialize & Insurtechs Emerging Profitability

Hi Friends!

August always feels like a pause between chapters—less travel, a bit more time at home, and just enough space for reflection before the fall conference circuit kicks off. I’ve been staying close to home this month, mixing in a few quick local trips and plenty of great virtual conversations with folks across the industry.

This week brought a fresh round of earnings from a wide range of insurers, a few telling investment signals from the Gallagher Re Insurtech Report, and continued strategic moves across the insurance landscape—from insurtech asset grabs to big broker plays. Underneath it all, one theme stands out: focus. Whether it’s capital flowing to risk gaps, brokers scaling smarter, or public insurtechs finding their footing, the market is rewarding clarity and execution.

Let’s dive into this week’s Three Things We Learned.

 [1]

Innovation Continues to Focus on Risk Gaps as AI Buzz Cools

Insurtech investment continues to mature, with Gallagher Re’s Q2 2025 report showing global funding on pace to hit $60B this year. But as investor skepticism grows around AI’s short-term potential, capital is flowing toward solutions that address real pain points, particularly in hard-to-insure areas like property, flood, and specialty lines.

Datos Insights’ acquisition of InsTech highlights how advisory firms are involved in these trends. The move combines Datos’ extensive research skills with InsTech’s strong network of insurance innovators, aiming to provide more tailored guidance to insurtechs and solution providers dealing with increasingly complex risk environments.

Neptune Flood’s milestone of surpassing 250,000 policies in force reinforces that trend on the distribution side of hard-to-insure areas. The demand for alternative flood coverage continues to rise as traditional markets remain constrained. That momentum is only likely to accelerate as Colorado State University’s latest forecast projects a significantly above-average hurricane season, driven by record-warm Atlantic waters.

 [2]

Carriers, Brokers, and InsurTechs Reshape to Scale and Specialize

Across the insurance ecosystem, players are repositioning themselves—absorbing valuable assets, shedding non-core operations, and tightening focus on growth segments. Hiscox made a notable move by acquiring the MGA and carrier operations of insurtech firm Vouch, signaling a renewed appetite for established carriers to selectively absorb insurtech capabilities that enhance their underwriting or distribution models.

WTW is also reshaping its portfolio, divesting its Verita CSG unit in a deal with United Risk. Now rebranded as Verist and led by returning executive Michael Chang, the move reflects WTW’s sharpened focus on its core advisory and brokerage operations while allowing the MGA to scale independently under a new banner.

Meanwhile, Howden formally entered the U.S. retail market by launching a new business unit led by former Marsh executive Mike Parrish. The launch positions Howden alongside global peers like WTW, Gallagher, and Aon—underscoring its ambition to become a full-spectrum global player with U.S. distribution strength.

Even solution providers are making strategic alignment plays. Cyber analytics firm CyberCube partnered with specialty MGA platform Wholesure to embed cyber risk modeling deeper into the underwriting process. It’s a signal that tech vendors are evolving from point solutions to embedded partners as the ecosystem becomes more interconnected.

 [3]

Earnings This Week Highlight Insurtechs Emerging Profitability

This week’s Q2 earnings releases offered a snapshot of how different corners of the insurance ecosystem are navigating 2025, and the signals are clear across groups.

Among large multinationals, Berkshire Hathaway, AIG, Liberty Mutual, and Zurich each showcased resilience amid complex market conditions. Berkshire and Liberty delivered strong underwriting performance despite elevated loss activity. At the same time, AIG leaned into margin improvement and Zurich posted record operating profit, continuing to set the pace for global peers. Taken together, these results reflect disciplined execution across underwriting, investment, and capital management.

Specialty and commercial-focused carriers also posted healthy results, with CNA, Canopius, and Hamilton each reinforcing the value of focus and underwriting precision. Canopius saw significant growth in net insurance revenue, while Hamilton’s underwriting gains drove a sharp rise in income. Even CNA, despite a dip in net income, showed consistent progress in navigating its portfolio strategy.

And finally, the public insurtechs are beginning to turn the corner. Both Hippo and Root delivered improved results and leaned into profitability, validating the reset that these firms started in 2023. Lemonade narrowed losses and saw meaningful premium growth, suggesting their platform approach is gaining traction. While the road ahead is still steep, the path toward sustainable business models is beginning to take shape.