InsurTech/M&A/Financeđ°/Collaboration
State of Insurtech Q2â24 Report - CB Insights Research
Insurtech funding sees its strongest quarter in over a year despite deal volume sinking to its lowest point since 2016.
Global insurtech funding increased 44% quarter-over-quarter (QoQ) to $1.3B in Q2â24 â outpacing the quarterly growth seen across the broader venture and fintech landscapes.
Houlihan Lokey (HLI) Agrees to Acquire Chicago Boutique Waller Helms - Bloomberg
Houlihan Lokey Inc. agreed to buy Waller Helms Advisors, an investment bank that specializes in the insurance and asset-management industries.
Waller Helmsâs roughly 50 financial professionals, including 13 managing directors, will join Houlihanâs financial-services group, Houlihan said in a statement Thursday. James Anderson, chief executive officer of Chicago-based Waller Helms, will become global co-head of Houlihanâs financial-services group.
Houlihan, founded in 1972, has been on a buying spree that helped cement its position in mid-market deals and is preparing it for what many bankers are predicting will be a gradual rebound in mergers and acquisitions. Scott Adelson, who took over as CEO of Los Angeles-based Houlihan in June, said on the firmâs earnings call in July that he was in âconstant dialogâ with potential targets and prepared to make further acquisitions.
Global Insurtech Funding Rebounds in Q2 2024
Global insurtech funding rebounded in Q2 2024, driven by larger deal sizes despite a decline in overall deal count, according to Gallagher Re's quarterly analysis.
Global insurtech investment surged to $1.27 billion in the second quarter of 2024, marking the highest level since Q1 2023, according to Gallagher Reâs Q2 Global Insurtech Report.
The quarter witnessed a 39.7% increase in global insurtech funding, compared with the previous quarter. The main driver of the growth in insurtech funding was a near doubling of average deal sizes, which increased to $18.46 million in Q2 from $9.81 million in Q1, according to the report.
Leading this trend was health insurer Sidecar Health, which raised $165 million in a Series D round and was the sole mega-round deal of the year to date.
However, while total funding increased, the overall deal count saw a 23.4% decline to 82 deals in Q2 from 107 in Q1, the lowest quarterly count since Q2 2020. This drop was proportional across both the property & casualty (P&C) and life & health (L&H) insurance sectors, falling to 54 from 70 deals to 28 from 37 deals, respectively.
Climate/Change/Sustainability/ESG
Climate change is ending the Sun Belt boom
If you moved from the Snow Belt to the Sun Belt during the last few years, you might be part of a vanishing breed.
Since the widespread adoption of air conditioning in the 1970s, Americans have moved in droves from cold northern climes to sunny southern ones. That has led to booming populations in states such as Florida, Texas, and Arizona and a shift in economic activity from North to South.
But Sun Belt migration is now skidding to a halt, according to a new working paper from the Federal Reserve Bank of San Francisco. As climate change makes warm places hotter and cold places more livable, more Americans are staying put in the North, while others are leaving the South. In coming decades, net migration might flow in the other direction.
Severe convective storms drive 70% of $60bn insured losses in H1: Swiss Re
According to a new report from Swiss Re, global insured losses from natural catastrophes have reached $60 billion in H1 of 2024, with severe thunderstorms, mainly in the US, accounting for 70% of the total figure.
At $60 billion, global insured losses from natural catastrophes in H1 of 2024 are reportedly 62% above the ten-year average.
Meanwhile, severe convective storms (SCS), characterised by strong winds including tornadoes, hail and heavy rain, led to insured losses of $42 billion globally in H1 of 2024, which is around 87% higher than the 10-year average.
Swiss Re observed that in the US alone, 12 storms each caused losses of $1 billion or more in H1 of 2024.
As per the reinsurerâs report, total insured losses globally in H1 were $66 billion, which includes an additional $6 billion from man-made catastrophes.
Can Climate Tech Save Insurance? | Insurance Innovation Reporter
The future of the insurance industry is dependent on how it responds to climate change.
Simply stated, extreme weather is disrupting property/casualty insurance profitability while destroying coverage affordability and restricting availability.
Alan Demers and Stephen Applebaum in Insurance Innovation Reporter
Research
Top 10 U.S. colleges for insurance and risk management in 2024
Many insurance and risk management professionals find themselves in the industry in spite of the focus of their studies. But for those who hope to make themselves especially attractive candidates in the field, a specialized degree may be the way to go. Selecting the best college program for their career goals can be daunting, though. Factors to consider when choosing a college insurance program include:
-The reputation and ranking of the school - Tuition costs and financial aid availability - Faculty expertise, qualifications and specialization - Accreditation, curriculum and resources Job placement rates - Opportunities for hands-on learning and research - Student support services and a strong alumni network - Extracurricular activities and diversity - Networking, internship opportunities and post-graduation support
The slideshow above counts down the top ten colleges for insurance degrees in the U.S., according to Sci Journal
News
Surplus lines continue upward trend to start 2024
The midyear report attributes the growth in this area to the fact that admitted insurers are withdrawing from certain markets, leaving the E&S market as a solution for those who don't fit the standard market's appetite.
Surplus lines premium reached $39.5 billion with 3.2 million items filed in the first half of 2024, the U.S. Surplus Lines Service and Stamping Office shared in their 2024 Midyear Report. This demonstrates increases of 10.1% and 10.8% in premium and items respectively compared to the same period in 2023.
When considering specific lines, commercial liability and commercial property coverage continued to dominate the industry. Personal lines policies remain a very small portion of the overall E&S market, with premiums for residential, homeowners and other personal property coverages comprising 4.6% of year-to-date premium in 2024.
The midyear report attributes the growth in this area to the fact that admitted insurers are withdrawing from certain markets, leaving the E&S market as a solution for those who don't fit the standard market's appetite.
"The significant growth in California at the start of the year is primarily driven by an influx of new policies in the real estate, personal lines/homeowners, hospitality, and wholesale industries," Ben McKay, CEO and executive director of the Surplus Line Association of California â which saw moderate premium growth of 7% to start the year â said in a release about the report. "It's important to note that, except for personal lines/homeowners, the premium for policies in these industries and others shows moderate to flat growth."
Commentary/Opinion
The End of CRM As We Know It? | Insurance Thought Leadership
While customer relationship management systems have been at the core of sales organizations for decades, AI-native systems could supplant them.Â
A prominent venture capital firm, Andreessen Horowitz, published a provocative note last week that calls into question the future of the customer relationship management systems that have been the backbone for sales organizations for decades.
"We believe AI will... fundamentally reimagine the core system of record.," the note says. "Instead of a text-based database, the core of the next sales platform will be multi-modal (text, image, voice, video), containing every customer insight from across the company. An AI-native platform will be able to extract more insight from a customer and their mindset than we could ever piece together with the tools we have today."
While I'm not suggesting you rip out your Salesforce system any time soon, I do think it's worthwhile to start imagining what your future system of record will look like--and how you get there from here.
The Andreessen Horowitz note offers a good explanation of the limitations of today's CRM systems and of how AI-based systems could go well beyond them
Paul Carroll, editor-in-chief, Insurance Thought Leadership
How large would a nat cat event be to send property back into a hard market?
Tropical Storm Debby unleashed prolonged rains and flooding on southeastern US states this week after making landfall as a Category 1 hurricane.
Itâs the latest storm in whatâs proving to be an active hurricane season for North America, adding to concerns that another massive nat cat event could drive the property insurance market back into hard conditions.
Severe thunderstorms and catastrophic flooding have already driven significant losses in the first half of the year. According to Munich Re, flooding events and two earthquakes led to global insured losses of about $60 billion in H1 2024, markedly higher than the 10-year average of $37 billion.
Despite this, the US property insurance market has been seeing softer conditions, according to one expert who spoke with Insurance Business.
âThe insurance market, particularly in Florida, remains in transition,â said Ben Beazley (pictured), executive vice president of property at Jencap Group. âThere are definitely areas where pricing is going down. Retentions are staying the same.
Your Next Home Insurance Nightmare: AI, Drones, and Surveillance - Business Insider
My journey into the surreal, infuriating future of homeowners insurance.
It was already a hectic day when my insurance broker left a frantic voicemail telling me that my homeowner's insurance had lapsed. I felt nauseous and naked. Suddenly, any leak, fire, or tree branch falling onto the hundred-year-old Hudson Valley house that's been in my family for nearly 40 years could wipe out my bank account. I spiraled in shame. How did I let this happen? Did I forget to update a credit card? Did I miss a bill? Did I do something wrong with the policy? But when I checked my records, even the Travelers website, there was nothing.
A few hours later, my panic turned to bewilderment. When I finally reached my insurance broker, he told me the reason Travelers revoked my policy: AI-powered drone surveillance. My finances were imperiled, it seemed, by a bad piece of code.
I take privacy and surveillance extremely seriously â so seriously that I started one of the leading think tanks on the topic, the Surveillance Technology Oversight Project. But while I study surveillance threats around the country for a living, I had no idea that my own insurance company was using my premium dollars to spy on me. Travelers not only uses aerial photography and AI to monitor its customers' roofs, but also wrote patents on the technology â nearly 50 patents actually. And it may not be the only insurer spying from the skies.
Albert Fox Cahn is the founder and executive director of the Surveillance Technology Oversight Project, or S.T.O.P.
AI in Insurance
Viewpoint: Generative AI in Insurance Isnât Working
The insurance industry is at a pivotal moment in embracing generative AI. According to the ISG Pulse Check State of the European Insurance Industry 2024, insurance firms are actively engaged in generative AI transformations and currently comprise nearly a quarter of all generative AI use across various industries.
Executive Summary
Dennis Winkler, director of insurance at ISG, writes that while the insurance industry sees itself as a trailblazer in the exploration of generative AI, ISG research finds only 5 percent of these initiatives have translated into tangible value. He says that to move past experimentation and enthusiasm and achieve conclusive outcomes, insurance firms need strategic generative AI implementation.
Dennis Winkler is a director in ISGâs insurance practice with more than 25 years of experience helping enterprises develop their sourcing strategy. He has worked with most large insurance companies and has advised on many of the largest insurance BPO, ITO and TPA deals in the U.S. He is an author and frequent industry event speaker on insurance outsourcing, automation and business transformation.
Events
ITC Vegas 2024 - The worldâs largest gathering of insurance innovation
ITC Vegas 2024 - The worldâs largest gathering of insurance innovation
Insurtech Consulting and our âConnectedâ newsletter are proud media partners of ITC Vegas 2024
Event Date: Tuesday, October 15 â 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 whatâs 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 industryâs best and brightest. Join the insurance event that doesnât just bring the industry together â it moves the entire industry forward.
The future of insurance is here â at ITC Vegas. If you arenât 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.