Commentary/Opinion
The insurance industry’s best-kept $5B secret — With TruStage's Terrance Williams
The name “TruStage,” said its president and CEO, Terrance Williams, “is meant to represent trust at every life stage. If that’s our brand and what it means to be TruStage, we’ve got to live up to that by ensuring that we are catering to these individual consumers at all their various life stages.”
TruStage distributes its products through credit union partners. As an example, Williams said, “65% or so of our $5 billion in revenue is distributed through the credit union system. We reach an agreement, a partnership, with a credit union, and then that allows us to market to their end members. The remaining 35% or so of our revenue is driven by partnerships. We distribute through partners like Ethos.com.”
“We are the best-kept secret when it comes to $5 billion companies in the country,” he continued, “and some of that is because of our go-to-market approach. We are a B2B2C company. We are not a company that you’re going to hear about during an NBA basketball game. You’re not going to see a TruStage commercial or an ad. Because our focus is getting to that middle-market consumer through a partner.”
In this interview with publisher Paul Feldman, Williams discusses TruStage’s approach to the middle market.
Paul Feldman: You started as CEO of TruStage in October after joining the company in June 2023. You’ve had an impressive career. Tell me a little bit about how you got into the industry and a little bit about where you were before joining TruStage.
Terrance Williams: My path to the insurance industry is somewhat unique. Most people fall into the insurance business. But that’s not true for me. Through the influence of some family members, I actually planned to pursue a career in insurance. When I was looking for a college, I sought out a school that had a risk and insurance program, which again was not the norm, particularly back in the 1980s. But that’s what I did.
GenAI Solutions Can Bridge the Insurance Talent Gap | Insurance Innovation Reporter
Insurance processes can be manually intensive, time-consuming work, and when the workload exceeds your talent pool, something needs to be done to bridge the gap. GenAI is that bridge.
People are the lifeblood of the insurance industry. It is the underwriters, claims professionals, SIU investigators, and countless others working to protect individuals, their families, and their businesses and property, who keep the industry moving forward. Their experience and expertise are invaluable.
At the same time, insurers around the world are facing a rapidly approaching personnel crisis. According to figures from the U.S. Bureau of Labor Statistics and as reported by the U.S. Chamber of Commerce, the number of insurance industry employees nearing retirement age has increased by 74 percent over the last 10 years. Why is that important?
Fundamentally, those figures mean we can reasonably predict that 50 percent of the active insurance workforce will retire sometime during the next 15 years. And those predicted numbers cover only the U.S. population. We see strikingly similar figures associated with mature insurance markets around the world.
Jérémy Jawish is CEO of Shift Technology
InsurTech/M&A/Finance💰/Collaboration
Global insurtech funding up sharply in Q2: Gallagher Re
Global insurtech funding rose 39% year-over-year in the second quarter to $1.27 billion, according to a report Thursday from Gallagher Re, the reinsurance business of Arthur J Gallagher & Co.
Global insurtech funding rose 39% year-over-year in the second quarter to $1.27 billion, according to a report Thursday from Gallagher Re, the reinsurance business of Arthur J Gallagher & Co.
Second-quarter funding was up 39.7% from $912 million in the first quarter, as the average deal size roughly doubled to $18.46 million from $9.81 million
Overall deal count declined 23.4%, from 107 in the first quarter 2024 to 82 in the second quarter, marking the lowest quarterly total since second-quarter 2020’s 74 deals, the report said
The artificial intelligence-centered insurtech sector attracted $445.81 million, 35.1% of the total. Since 2012, AI-centered insurtechs have received approximately 16% of all capital invested in the industry, according to a statement with the report.
The United States continued to be the leading destination for insurtech investment, netting 49% of total investments, with the U.K. a distant second at 13% and France and India tied at 6%.
In the property/casualty sector, funding for business-to-business insurtech transactions received the lion’s share of investment at 57%, followed by distribution-focused deals at 37%, and insurer tech funding at 6%, according to the report.
Climate/Change/Sustainability/ESG
Extreme Weather Drives Insured Losses 70% Above Historical Norms
- Munich Re study finds more frequent and intense events
- Natural disaster losses are well above the 10-year average
Natural catastrophes caused about $62 billion of insured losses in the first half of 2024 — roughly 70% above the 10-year average — as extreme wildfires, droughts and floods upend historical norms.
The data, which were compiled by Munich Re, show that “weather catastrophes in the US” dominated losses in the period, Tobias Grimm, the reinsurer’s head of climate advisory, said in a phone interview. Other developments of note include “floods in regions where they are very rare, such as Dubai,” he said.
“It is clear that climate change plays a role in this development,” Grimm said.
Cheap Lumber, Stronger Hurricanes—Perfect Storm for the Strained Florida Insurance Market
These twin terrors of insurance hikes and ever-stronger storms are making Florida a rather pricey paradise. And we haven’t even gotten to the cheap materials that far too many contractors are using to build new homes. Florida builders are continuing to construct new homes from wood, all but begging the next named storm to cause massive problems.
Hurricane Beryl made its destructive presence felt last month, and the Category 5 storm wreaked absolute havoc in the Caribbean and was far more destructive than is typical for this early in the season. Though the powerful storm bypassed Florida, the state is all but guaranteed to be in the crosshairs of several—perhaps even stronger—storms in the months to come.
Kelly M. Corcoran is a partner in Ball Janik’s Orlando office, where he focuses on resolving complex insurance coverage and construction defect disputes. He may be reached at kcorcoran@balljanik.com.
Financial Results
Ryan Specialty reports 18.8% revenue growth for Q2'24 to $695.4m
International specialty insurance firm, Ryan Specialty Holdings, Inc. has reported a Q2 2024 total revenue growth of 18.8% year-over-year to $695.4 million compared to last year’s $585.1 million.
According to Ryan Specialty, this increase was primarily due to continued solid organic revenue growth of 14.2%, driven by new client wins, expanded relationships with existing clients, and continued expansion of the E&S market.
The firm’s net income for Q2 2024 increased by 40.8% to $118 million from the comparative quarter’s $83.8 million attributed to stronger revenue growth this quarter.
Adjusted net income for this quarter increased by 29.8% to $160.6 million, compared to $123.7 million in the prior-year period, driving the margin to 23.1%, compared to 21.1% in Q2 2023.
The firm’s adjusted EBITDAC grew 27.6% year over year to $247.7 million in Q2 2024 from $194.2 million, the adjusted EBITDAC margin was 35.6%, compared to 33.2% in the prior-year period driven by revenue growth, partially offset by increased adjusted compensation and benefits expense, as well as higher adjusted general and administrative expense.
Claims
Crash Course Q2 Report Summary
No time to navigate our 2024 Crash Course Q2 report? No worries. We've done the work for you. We've condensed the latest data and trends into short snapshots that you can access below.
• APD
• VEHICLE REPAIR
• CASUALTY
• SUBROGATION
Can too much technology be a problem in claims?
Claims processing has benefitted tremendously from the integration of artificial intelligence (AI), including generative AI (gen AI). These technologies are revolutionizing the way insurance claims are processed, assessed, and managed, delivering unprecedented efficiency, accuracy, and, ultimately, customer satisfaction.
But how can the insurance industry balance the rapid penetration of AI with human judgment and connection?
“I’ve already seen companies that aren’t more methodical and intentional about finding that balance and get themselves in trouble sometimes,” said Dhara Patel (pictured), president and deputy CEO of Davies Group’s North American business.
“Too much technology can be a problem because claims and insurance services still have a very human element to it.”
Balancing technology, integration, and growth
Speaking to Insurance Business, Patel admitted one of the biggest challenges to driving further growth in North America was striking the balance between technology and growth, including mergers & acquisitions (M&A).
Events
ITC Vegas 2024 - The world’s largest gathering of insurance innovation
Insurtech Consulting and our ‘Connected’ newsletter are proud media partners of ITC Vegas 2024
Event Date: Tuesday, October 15 – Thursday, October 17, 2024
Event Location: Mandalay Bay Convention Center
3950 Las Vegas Blvd S
Las Vegas, NV 89119
ITC Vegas combines unbeatable networking with what’s new and next, ensuring your time will be spent meeting more people, sourcing more solutions, and creating valuable partnerships.
Discover solutions to your biggest challenges, gain access to unique and meaningful education, and meet the insurance industry’s best and brightest. Join the insurance event that doesn’t just bring the industry together – it moves the entire industry forward.
The future of insurance is here – at ITC Vegas. If you aren’t here, you are missing out on the conversations that are propelling the industry forward
Register now and save, $200 off. Use promo code 200ITC1813
Code not valid on Independent Agent, Startup, Groups, or LATAM tickets. Discounts only apply to new registrations.
Announcements
Guidewire Kufri Release Expands HazardHub Internationally, Enabling Insurers in 19 More Countries to Assess Property Risk in Seconds
Guidewire (NYSE: GWRE) announces Kufri release, its latest cloud update, which extends Guidewire HazardHub to 19 additional countries, enhances underwriting and billing processes, facilitates cloud migrations, and streamlines developer experiences.
HazardHub is the most comprehensive set of property risk data and peril risk scoring in the P&C insurance industry. Insurers use HazardHub data to underwrite quickly and more accurately, as well as to improve pricing.
“This is a challenging time for property insurers around the world. With increasing natural disasters, evolving regulatory requirements, and the growing complexity of risk management, insurers need robust tools to quickly make informed decisions,” said Leo Tenenblat, Senior Vice President and General Manager, Guidewire. “We are pleased to expand HazardHub to insurers in Europe, Australia, New Zealand, and South Africa, providing them four risk peril scores (flood, wildfire, wind, and hail) and 65 new data elements for more granular property risk assessments.”
“HazardHub helps Atrium assess and manage risks associated with homeowners and commercial properties in the United States,” said Simon Lewis, Head of Digital Underwriting and ARMS President, Atrium Underwriters Ltd. “We look forward to seeing the expansion of HazardHub's risk data and peril scores because we trust the data and know it will help Atrium to make even more insightful underwriting decisions across the globe.”
People
MAPFRE Names Leire Jiménez Group Chief Innovation Officer | Insurance Innovation Reporter
Jiménez, who remains CEO of MAWDY, developed her career of over 20 years at both the national and international levels in markets such as the U.K., France, and Asia.
Global insurer MAPFRE (Madrid) announced the appointment of Leire Jiménez as Group Chief Innovation Officer, effective September 1, 2024. The position will be concurrent with her current role as CEO of MAWDY, the company’s assistance business unit. Jiménez replaces José Antonio Arias, who remains as Group Chief Operational Transformation Officer.
Jiménez will lead the next phase in the evolution of MAPFRE Open Innovation, founded in 2018, which is dedicated to continue enhancing business development and decision-making, as well as to ensure MAPFRE adds value to its customers by anticipating market trends and needs.
Jiménez has 20 years of industry experience, having developed her career at both the national and international levels in markets such as the U.K., France, and Asia, holding different positions of responsibility at MAPFRE. She has been CEO of MAWDY since 2019. She holds a Degree in Business Administration and Humanities from Deusto University (Spain), and has a Master’s Degree in International Relations from Flinders University (Australia). In addition to her strategic and managerial capacity, she has extensive knowledge of the insurance market and is a firm advocate of the power of innovation as a fundamental pillar for business growth, according to a MAPFRE statement.
Webinars/Podcasts/Interviews
The rise of embedded insurance
Transcription:
Transcripts are generated using a combination of speech recognition software and human transcribers, and may contain errors. Please check the corresponding audio for the authoritative record.
Hello and welcome to this edition of the Dig In podcast. I'm your host, Patti Harman, editor in chief of Digital Insurance.
Insurance coverage is constantly evolving to keep up with customer needs, new technology and emerging risks. As carriers change their coverage options, pull out of high risk areas or identify new exclusions, policyholders are looking for different insurance alternatives to help mitigate their exposures. Today we're taking a look at embedded insurance, how it works, what it covers, and why it's becoming a more popular choice in some instances. Joining me is Andy Watts, business development director at INSTANDA. Andy has several decades of experience and insurance and particularly in the technology sector and can share what he's seen from a global perspective since he's based in England.
Thank you so much for joining us today, Andy.
Patti Harman, editor-in-chief, Digital Insurance