News
Liberty Mutual slashes around 850 jobs as part of 'transformation initiative'
Liberty Mutual is set to cut around 850 jobs, or about 2% of its US workforce this month, making it the latest insurer to announce layoffs in recent weeks.
In a statement issued to Insurance Business, a Liberty Mutual spokesperson confirmed that the move was made “as part of a company transformation initiative.”
“We have made the difficult decision to eliminate approximately 850 positions, nearly all in the US, across several functions this month, many of which are effective by the end of the year,” the spokesperson said.
“Impacted employees will be eligible for severance and outplacement assistance and are encouraged to apply for other positions within the organization.”
Employees in Liberty Mutual’s US retail markets and global risk solutions business units, as well as technology and other corporate groups, will be impacted, according to the spokesperson.
Hippo lays off approximately 20% of staff
Roughly a week before the anticipated release of its Q3 2023 results, Hippo initiated layoffs affecting approximately 120 employees
This is equivalent to about 20% of Hippo’s workforce as mentioned earlier. As of December 31, 2022, Hippo had 590 employees.
This development follows Hippo’s decision to suspend all new nationwide business, effective August 2023.
In its most recent earnings report, Hippo disclosed that it held $565 million in cash and other investments at the close of Q2 2023, reflecting a decrease from $620 million at the end of the preceding quarter.
Founded in 2015, Hippo primarily operates as a personal property insurer and has raised over $1.2 billion since its inception. Its current market cap stands at $173.70 million, and the stock is currently trading at $7.34. Hippo is also the parent company of P&C insurer Spinnaker and insurance marketplace First Connect.
Pekin Insurance announce they are cutting some full-time positions
Pekin Insurance restructuring in ‘unprecedented time’ - announced Wednesday that they eliminated a small percentage of its full-time positions on Tuesday.
According to a Pekin Insurance news release, the job cuts are part of its accelerated strategic plan to focus more on profitable commercial lines business.
All the employees who lost their jobs were offered a severance package.
Dan Connell, the Chief Executive Officer of Pekin Insurance, said these decisions are always tough to make.
“Unfortunately, today’s business climate is forcing us to take immediate action to ensure our future financial success and steadfast commitment to our policyholders,” Connell said. “Our remaining team will be focused on serving all our customers with excellence and precision.”
Acapulco Losses Seen at $15 Billion as Hurricane Otis Death Toll Rises
Hurricane Otis left a trail of destruction in Acapulco after tearing into the historic Mexican beach town with wind speeds of 165 miles (266 kilometers) per hour, smashing shops and wrecking apartment buildings and hotels.
State authorities have reported 27 deaths and four missing persons so far, Security Minister Rosa Icela Rodriguez said in a press conference Thursday.
2023’s Severe Weather Events Are Proving Costly to U.S. Insurers
The U.S. is experiencing its costliest year ever in 2023 for severe convective storms, with insured losses from these events exceeding $50 billion through the end of September, according to the Insurance Information Institute (Triple-I.)
Severe convective storms include natural catastrophes such as thunderstorms with lightning, hail, tornadoes, and derechos, which are organized lines of thunderstorms with widespread damaging winds. Tornadoes in Arkansas, Illinois, and Mississippi caused a significant loss of life and property damage in 2023’s first-half. They were followed by this summer’s intense hailstorms in Colorado and Minnesota, among other states.
U.S. auto, home, and business insurers cover insured properties impacted by wind, hail, and lightning-caused fires. Flood-caused damage to private-passenger vehicles is covered under the optional comprehensive portion of a personal auto insurance policy.
“A $50 billion loss for a single peril is a big deal,” said Steve Bowen, chief science officer, Gallagher Re, who collaborated with Triple-I on its just-released Issues Brief, Severe Convective Storms: State of the Risk.
“In fact, the U.S. has had six years since 2010 where all annual catastrophe losses combined did not reach this threshold.”
The higher dollar amount of the insured losses can be attributed in part to these events striking densely populated U.S. communities, the site of homes and commercial buildings which are costly to repair and replace, a Swiss Re study cited by Triple-I found. The 2023 weather and climate disasters causing at least $1 billion in damage, both insured and uninsured, are chronicled by the federal government and featured in a chart which is incorporated into Triple-I’s latest Issues Brief.
Neptune Flood Crosses $200 Million of Premium in Force, Becomes Primary Alternative to NFIP
Neptune Flood, the largest private provider of flood insurance in the United States, has crossed $200 million of premium in force and adds seven members to its newly formed advisory board, it was announced today by Trevor Burgess, CEO of Neptune Flood.
Crossing $200 million of premium in force brings Neptune to over 5% of the National Flood Insurance Program's size, securing its role as the primary alternative to the NFIP.
"Growing in scale highlighted the need for sage advice from a group of leading experts in the insurance industry. My executive team is incredibly thankful that this group of seven leaders has agreed to help us in our journey to be the best possible flood insurance company for consumers, agents, and our risk-taking partners," said Trevor Burgess, Neptune's CEO.
Erie Indemnity Reports Third Quarter 2023 Results
Erie Indemnity Company (NASDAQ: ERIE) today announced financial results for the quarter and nine months ending September 30, 2023. Net income was $131.0 million, or $2.51 per diluted share, in the third quarter of 2023, compared to $84.3 million, or $1.61 per diluted share, in the third quarter of 2022. Net income was $335.1 million, or $6.41 per diluted share, in the first nine months of 2023, compared to $233.1 million, or $4.46 per diluted share, in the first nine months of 2022.
Operating income before taxes increased $42.0 million, or 39.4 percent, in the third quarter of 2023 compared to the third quarter of 2022.
Management fee revenue - policy issuance and renewal services increased $97.4 million, or 17.7 percent, in the third quarter of 2023 compared to the third quarter of 2022.
Management fee revenue - administrative services increased $1.5 million, or 10.2 percent, in the third quarter of 2023 compared to the third quarter of 2022. Cost of operations - policy issuance and renewal services
American Family Insurance Confirms Reports of Cyber Attack, Raising Consumers’ Concerns Over a Possible Data Breach
Last week, American Family Insurance (“American Family”) confirmed that the recent IT issues the company has been dealing with were due to a cyberattack.
Given the recency of the incident, American Family is still in the process of investigating the incident. However, if American Family determines that any consumer information was compromised as a result of the cyberattack, it will be required to send data breach notification letters to all individuals whose information was affected.
InsurTech/M&A/Finance/Collaboration
The Israeli InsurTech Accelerator: Out of 25 graduates, 21 companies are thriving with a combined value nearing $750 million
The Israeli InsurTech Accelerator announced: “We are thrilled to announce the extraordinary achievements of The Israeli InsurTech Accelerator in our latest report. As a unique and boutique accelerator program within the insurtech industry, we have consistently driven Israeli insurtech startups to new heights over the span of five cohorts and 2.5 years. Our recently released figures vividly showcase the remarkable progress made by the five accelerator groups and their significant impact on the insurance technology sector”.
Key highlights from The Israeli InsurTech Accelerator program include:
Continued Success: Out of 25 graduates, 21 companies are thriving, with a combined value nearing $750 million. This is clear evidence of our program’s ability to attract investments and support entrepreneurs in the insurtech field.
Funding Milestones: The Israeli InsurTech Accelerator, a prestigious program, has garnered substantial trust from companies worldwide who join as business partners in our ecosystem. Our startups have raised over $100 million in the last year and a half and have signed more than 30 significant deals, establishing Israel as a leading hub in the global insurtech landscape with close to 200 active insurtech startups.
Extraordinary Growth: On average, startups that have completed The Israeli InsurTech Accelerator program have seen their valuation double since joining, demonstrating the program’s effectiveness in fostering rapid growth and development in the insurtech sector.
Partner Collaboration: The unique activities of the accelerator, Insurtech Israel, and the Israeli startups have created great trust in our system. Just in the last year, more than 10 international and local insurance companies, technology firms, and investment funds have joined as business partners, indicating the high level of trust in the Israeli startups and our activities.
Mentors – Over the past 18 months, over 25 of the world’s leading mentors, senior managers from the world of international insurance, technologists, regulators, senior academics and investment fund managers who support the insurance sector have joined our ranks.
“We are extremely proud of the achievements of our startups and the continuous growth of the insurtech sector and the Israeli Insurtech ecosystem,” said Kobi Bendelak, CEO of Insurtech Israel and The Israeli InsurTech Accelerator.
“These exceptional results validate the effectiveness of our accelerator program and underscore the vital role that insurtech startups play in driving innovation in the insurance industry, while working to identify risks earlier and lower costs faster for our clients. As The Israeli InsurTech Accelerator continues to advance the insurtech landscape, the program remains dedicated to nurturing the next generation of insurtech leaders and driving continued success in the insurance technology sector.”
AgentSync raises $50M more in a massive Series B extension
Insurtech has had a rocky few years. Several startups in the space raised a lot of money and tried their luck on the public markets, but found that investors were unwilling to grant them valuations on par with other tech companies for just trying to make insurance more efficient.
Indeed, the market seems to demand much more of insurtech players, with former startup darlings seeing their valuations decline sharply (in the case of Hippo), or deciding to sell for a fraction of their former worth (what happened with MetroMile).
Insurtech startup AgentSync is taking on the same slice of the economy, but with a very different model, focusing on helping federate information via APIs between different parties. That, it appears, is a more viable model: AgentSync recently raised a $50 million Series B extension, TechCrunch+ has learned. Prior investors led the round, and Craft and Valor returned as lead investors.
The company last raised capital in 2021, adding $75 million to its coffers at a $1.2 billion valuation at the time. The startup declined to share its new valuation.
Canopy Connect Raises $6.5M Series A Led by Nevcaut Ventures
Investment enables accelerated growth with insurance agencies, insurance carriers, lenders and opens new markets
Canopy Connect, the leading platform for collecting, verifying, and monitoring insurance information, today announced it has closed a $6.5M Series A funding round.
The new capital will allow the company to accelerate growth, increase product velocity, and build upon their success with the platform powering more than 3,500 companies across a broad range of verticals. Nevcaut Ventures led the round, with participation from Elefund, Nimble Partners, LocalGlobe, 9Yards Capital, Global FinTech Venture Partners, and more.
Until Canopy Connect came along, there was no platform for exchanging verified insurance information. For this reason, insurance information is largely exchanged manually today between insureds and the businesses that serve them.
AI in Insurance
Generative AI: Latest breakthroughs and developments
It was more than six months ago that a letter signed by a group including Elon Musk and Steve Wozniak called for a half-year pause on generative AI development. As our monthly updates can attest to, this letter failed in its objective.
The last six months have seen an array of announcements from the companies that kicked off the trend — OpenAI, Microsoft Corp. and Google — as well as the entrance of specialist startups and established technology companies.
This month continues this trajectory, with releases from many of the better-known generative AI companies and a number of launches from new entrants — increasingly companies outside of the US. To keep pace, these digests are augmented with various reports on product releases from vendors that you can find as part of our Market Insight service.
The Take
Amazon Web Services' huge investment in Anthropic will probably have the biggest long-term impact of anything announced in the past few weeks, and it highlights the monetary cost to train foundation models. Those levels of resources have kept the number of companies developing this layer of the generative AI stack relatively constrained. A countervailing factor appears to be a drive toward regionalized foundation models trained on local languages and context. In part, this drive is fueled by a desire to build the domestic technology industry, but it also reflects concerns surrounding US-focused data collection and human review stages of model development. From Japanese political parties releasing whitepapers focusing on concerns around how Japan is represented by prominent models to LLM releases in the United Arab Emirates designed to reflect "cultural and religious sensibilities," there is a clear desire to challenge the US-centered evolution of foundation models.
Additionally, the US fall technology conference season started with Google Cloud Next in San Francisco, the last before it moves to Las Vegas in 2024; Salesforce Inc.'s Dreamforce, which also made noise about leaving San Francisco; and Oracle Cloud World, which moved to Las Vegas from San Francisco in 2022.
Besides the threat to San Francisco's conference business, what is interesting is the many generative AI announcements made by the vendors and others.
Announcements
Enterprise Mobility Ushers in New Era
Diverse Portfolio of Robust Mobility Solutions, Commitment to Delivering Leading Customer Service and Experience
Purpose led and people first, Enterprise has been moving mobility forward for more than 65 years. Now, as this global leader reaffirms its mobility ambition and looks to partner with others to help shape future experiences, the business is connecting its full portfolio of offerings – car rental, fleet management, flexible vehicle hire, carsharing, vanpooling, car sales, truck rental, vehicle subscription, luxury rental, technology solutions and more – under a new corporate brand.
Introducing: Enterprise Mobility™.
"Since day one, we've been inspired by a bold idea: creating better experiences for how the world moves," said Enterprise Mobility President and CEO Chrissy Taylor.
"This marks the beginning of our next chapter, reinforcing our 90,000-strong global team's commitment to deliver exceptional service for partners, customers and neighbors – innovating with intention to meet their ever-changing needs."
The motivation behind the shift is to reflect the business' evolution from a fleet of seven cars, more than six decades ago, to a global network of mobility solutions serving consumers, businesses and governments.
"We were founded as a car leasing business and are best known today as the world's largest car rental provider. Yet, the business has evolved immensely in terms of geography, offerings and customer segments served," said Taylor. "Enterprise Mobility brings together the full portfolio we have to offer as we continue to invest heavily to meet customer mobility needs today and into the future."