Three Things We Learned: Profits, AI, and Capital Confidence

Posted on by Nick Coenen

Hi Friends,

It’s been a busy week. No conferences this time, but traveling to meet with a new client and kick off a project kept things moving. Like many of you, we’re deep in planning mode as clients finalize budgets and shape engagements heading into 2026. The industry feels much the same, focused on results, positioning, and planning for what’s next.

This week, earnings dominated the headlines. In addition, we are tracking the latest InsurTech investment trends, and new waves of M&A and capital activity, each showing how insurers and intermediaries are positioning for a more connected, AI-enabled future.

Let’s dive into the three things we learned this week.

 [1]

Strength, Discipline, and Divergence — Q3 Earnings Across the Industry

Major carriers turned in a strong quarter, reinforcing how steady and profitable the market has become. Berkshire Hathaway led with solid reinsurance and personal lines results, while AIG, AXA XL, and AXIS Capital each reported notable underwriting gains. Liberty Mutual and Allstate benefited from fewer catastrophe losses, while GEICO continued its turnaround. Across the group, results reflected consistent execution and strong underwriting discipline — a sign that large carriers are balancing growth with stability as the cycle begins to normalize.

On the specialty side, CNA posted record core income, while Global Indemnity and Lancashire underscored how disciplined underwriting continues to drive performance. Hagerty raised its 2025 outlook while expanding through a new partnership with Liberty Mutual. Meanwhile, coastal property specialists Slide and American Coastal both reported standout quarters in a more stable coastal market.

The public insurtechs also showed signs of maturity. Lemonade grew in-force premiums 30% year over year, but is still not profitable. Root reported steady growth despite another quarterly loss, driven by a one-time charge related to its Carvana partnership. At the same time, Hippo delivered a surprise profit, benefiting from the sale of its homebuilder network and its stake in First Connect.

Earnings season reinforced what feels like a defining trend for 2025 — profitability and discipline are now the story. Whether through scale, specialization, or more innovative technology, insurers are leaning into operational control and long-term performance.

 [2]

The Next Wave of InsurTech — AI, Data, and Investment

According to Gallagher Re’s Q3 2025 InsurTech Report, global InsurTech funding reached $1.01 billion, with nearly all major rounds centered on AI-driven capabilities. The shift from distribution-led models to intelligence-driven platforms is unmistakable — investors are betting on data, not just delivery.

Established carriers are moving fast, too. Nationwide announced a $1.5 billion investment to accelerate its AI and automation strategy, and OdysseyRe appointed a new Head of AI Business Solutions to lead its push into machine learning for underwriting and claims.

Across the board, the focus is shifting from “AI as a tool” to “AI as infrastructure.” Whether through predictive modeling, workflow optimization, or advanced risk analytics, the market is investing in intelligence as the next competitive edge.

AI is becoming less about replacing people and more about enhancing expertise, turning institutional knowledge into data-driven precision.

 [3]

M&A and Market Entrants Gain Pace, Highlight Capital Confidence

M&A activity continues to signal confidence in specialty and distribution plays. Philadelphia Insurance Companies acquired Ignyte Insurance’s collector vehicle portfolio, expanding its niche specialty presence.

Gallagher added bank-owned Tompkins Insurance Agencies to strengthen its Northeast footprint, while ReSource Pro grew its compliance and licensing capabilities through the acquisition of Supportive Insurance Services.

On the capital markets side, Exzeo joins the string of other insurance firms with the latest IPO of the year, raising $168 million, a noteworthy step in what’s been a selective but strengthening investment environment.

These moves show that capital continues to flow toward differentiated capabilities — whether through acquisitions, expansions, or IPOs. The market remains confident in the long-term strength of insurance as an asset class and an ecosystem that rewards focus, innovation, and execution.