InsurTech/M&A/Financeđ°/Collaboration
"Math" on dealmaking has changed, but M&As will continue
Buyers will need to exercise more scrutiny on deals amid rising interest rates and an uncertain economic environment, but insurance mergers and acquisitions (M&A) will continue at a healthy pace, according to Barbara Ingraham (pictured), director of integration at One80 Intermediaries.
âItâs inevitable that as interest rates become higher that youâre just going to have to look more closely at the deals and make sure that they continue to make economic sense, so the math has probably changed a bit,â Ingraham told Insurance Business.
âHowever, one of the biggest reasons people sell, especially in our business, is theyâre looking to perpetuate the business and increase the opportunities for their staff, or theyâre looking to join with a larger organization so they can accomplish more than they could accomplish on their own. Those things donât change.â
Big Tech Companies: Insurance Friends or Foes? With Bold Penguin, Insly, Bolt Insurance and More
Recently, big tech companies have expanded to cover a wide range of financial services. Amazon has even explored moving into the insurance industry, with the launch of its âAmazon Insurance Storeâ.
While big tech companies could put pressure on traditional insurance options, it also appears there is a significant opportunity for collaboration between the two industries. So, are big tech companies friends or foes for the insurance industry?
To answer this, The Fintech Times asked a number of industry experts for their opinions and perspectives.
Eoin Lyons, CEO of Opal Group, the technology and administration provider to the financial services industry, explains that there may not be one definitive answer to the question.
âBig tech companies will be friends to consumers who want insurance but foe to some parts of the industry. Digitisation has totally reshaped customer expectations for frictionless experience in many sectors but this has yet to really impact life insurance.â
Global insurance sector mergers and acquisitions up 7.4% in 2022
There were 449 mergers and acquisitions completed in the global insurance sector last year, up 7.4% from 2021, according to a report Monday from law firm Clyde & Co. LLP.
The total was the highest in a decade, the report said. There were 418 deals in 2021.
The increase came despite a marked downturn in the second half of 2022 as economic and inflationary pressures impacted investor sentiment, the report said. The 207 deals completed in the second half compared with 242 in the first half.
Globally, there were 19 deals valued at over $1 billion in 2022, versus 25 in 2021.
Imperial Claims Services Utilizes Attestiv AI To Combat Insurance Fraud
Imperial Claims Services, a leading provider of insurance services across Europe, announced today that it has teamed up with Attestiv, a Boston-based technology company, to utilize its patented AI technology to detect and prevent insurance fraud. By deploying Attestiv's cutting-edge technology, Imperial Claims Services can rapidly identify potentially fraudulent claims, enhancing the efficiency and effectiveness of its claims process.
Insurance fraud is an ever-growing problem in the industry, costing billions of dollars annually. Attestiv enables companies to stay ahead of the game and ensure that they can precisely and effectively identify fraudulent activity.
"Imperial Claims Services is dedicated to providing the best possible service and technological tools to our partners while safeguarding our business against fraud," said Dionysis Tzanis, Vice President of Imperial Claims Services. "By leveraging Attestiv's AI technology, we can rapidly and safely analyze received documents and pictures, detect and flag any suspicious claims, thereby saving time and money for our company and clients."
News
Nationwide reports 2022 record sales and growth amid challenging conditions
Nationwideâone of the largest and most diversified insurance and financial services companies in the United Statesâreported 2022 earnings results today, reflecting one of the strongest performances in the company's 96-year history.
These results were achieved while paying nearly $19 billion in claims and benefits to its members in a year marked by high inflation, rising interest rates, volatile equity markets and severe weather.
Another year for the record books
Total sales for the Columbus-based mutual insurance and financial services company were a record $57 billion, $4 billion over 2021âwhich was also a record year.
Nationwide's key measure of profitabilityânet operating incomeâwas $1.4 billion. Total adjusted capital grew to $24 billion in 2022, up from $21.9 billion in 2021.
"Whether they were facing volatility in the markets or extreme weather, our members and partners knew they could count on Nationwide to deliver on our promise of protection during a turbulent 2022," said Nationwide Chief Executive Officer Kirt Walker.
Middle market firms show growth despite inflation risks â Chubb
Middle market companies in the US â those with revenues between $10 million to $1 billion â maintained growth momentum in the second half of 2022 despite risks posed by inflation, a looming economic downturn, and residual pandemic impacts.
Economic confidence is also rebounding after a downturn during the pandemic, with more middle market firms cautiously eyeing expansion this year, according to a new report by Chubb and the National Center for the Middle Market (NCMM). At the same time, companies expect revenue and growth to cool slightly as 2023 unfolds.
Mean revenue growth among firms surveyed remained steady in Q4 2022 (12.2% compared to 12.3% in Q4 2021), but more than half (58%) expected to increase revenue this year. Hiring also rose with mean employment growth of 11.1% in Q4 2022, compared to 10.8% in the prior year.
UBI Adoption Grows as Drivers Seek Post-Pandemic Rate Relief
The headlines are filled with a variety of 2023 predictions for the P&C Insurance industry with differing opinions about which might prove to be the most reliable. The when, how and how much are always elusive for forecasters. But one unarguable trend is ongoing increases in auto insurance premiums.
Auto insurance exists to reduce uncertain financial risks for consumers and make accidental losses manageable. Auto insurance also serves to fund repairs and replacement along with medical and legal expenses associated with accidents. As such, itâs not surprising that inflationary pressures are one of the primary forces contributing to increased loss costs across the board. Consequently, auto insurance premiums increased dramatically throughout 2022 and are expected to jump another 8 percent in 2023 on average and serve as a catalyst for more shopping and greater adoption of usage- and behavioral-based insurance.
Alan Demers and Stephen Applebaum, co-authors
AAA survey reveals most drivers are fearful of autonomous vehicles
In a new AAA survey, 68% of drivers this year are more fearful of riding in a self-driving vehicle than the 55% reported in 2022.
The survey found there are a lot of misconceptions about autonomous vehicles, including the perception that an operator can sleep behind the wheel of a self-driving vehicle.
Adrienne Woodland, a spokesperson for the car club said, âWe did not anticipate such a drastic shift in consumer concerns from past years.â Â
Insurance agents still challenged by carrier system integration
More than half of respondents to the NU/PIA 2023 Independent Insurance Agent Survey said their ability to deliver insurance products digitally is extremely or very important to their success. This is up from 48.5% in the 2022 Agent Survey.
The Independent Insurance Agent Survey is conducted by NU Property & Casualty magazine, PropertyCasualty360.com and ALM Intelligence in partnership with the National Association of Professional Insurance Agents. The Independent Insurance Agent Survey is conducted by NU Property & Casualty magazine, PropertyCasualty360.com and ALM Intelligence in partnership with the National Association of Professional Insurance Agents. The Seventh Annual Independent Insurance Agent Survey was produced by NU Property & Casualty and the National Association of Professional Insurance Agents (PIA). It was fielded between November 2022 and January 2023. Nearly 750 respondents contributed to the survey.
Among the many insights that this research revealed: Technology challenges persist, and many of them will not be surprising to industry insiders. More than 46% of respondents said that keeping adequate records across multiple communication channels, and 45.2% cited lack of integration between website and agency management systems as a challenges.
New House Data Privacy Bill Could Limit State Insurance Regulators' Authority
A new House bill could change the forms and procedures you and financial services providers use to protect your clientsâ privacy.
Members of the House Financial Services Committee have marked up the bill, H.R. 1165, the Data Privacy Act of 2023, along with other financial services bills.
The bill would update the data privacy provisions in the Gramm-Leach-Bliley Act of 1999. It would apply the same privacy rules to all communication channels; expand privacy notice requirements; make it easier for consumers to opt out of data-sharing; and let federal data privacy standards preempt state privacy standards.
One provision, section 5, could keep state insurance regulators from imposing any insurance privacy restrictions that were more restrictive than the privacy regulations that apply to other types of financial services organizations, such as banks.
TransUnion: Economy spurs housing insurance shopping
The fourth quarter of 2022 saw an increase in auto insurance shopping that amounts to a recovery, not growth â and increasing shopping for home insurance is likely to persist in 2023, according to a new insurance trends report by TransUnion.
Holding the line on rents and housing prices, or cutting them, may remain tough this year, according to Michelle Jackson, senior director of personal property and casualty insurance in the insurance practice TransUnion. Jackson is an author of the report, "2023 Q1 Insurance Personal Lines Trends and Perspectives."
How Insurance Companies Are Adapting to the Remote Work Model
The pandemic-induced transition to a remote work model is, by now, old news. But for industries like the insurance sector, which have historically been slower to adapt to paradigm shifts, adapting to this remote model is ongoing.
Many insurance companies have remained committed to their local talent pools, recruiting leaders and workers for whom the office commute has never been in question. But now, with a year of data under our belts, giving us deeper insight into the pros and cons of remote work, location seems to matter less.
Weâve done the research and interviewed a handful of leaders in the industry to explore how insurance companies are adapting to the remote work model, which is poised to persist long after the pandemic subsides.
Jay D'Aprile, Executive Vice President, Slayton Search Partners
People
Brooks Tingle Appointed President and CEO of John Hancock in Leadership Succession Plan
Today, John Hancock, a unit of Manulife (NYSE: MFC), announced that Marianne Harrison has decided to retire after twenty distinguished years with the company and that Brooks Tingle will become President and CEO of John Hancock, effective April 1st, 2023. Mr. Tingle will join Manulife's executive leadership team and report to Roy Gori, President and CEO of Manulife.
Ms. Harrison has led numerous leadership positions throughout her tenure, including as President and CEO of John Hancock since 2017. Before that, she served as President and CEO of Manulife's Canada division, President and General Manager of John Hancock's Long-Term Care business, and Manulife's Corporate Controller. She has been a constant champion for colleagues, a valued member of Manulife's executive leadership team, a strong DEI advocate, and successfully led John Hancock through the complexities of the COVID-19 pandemic.
Mr. Tingle currently serves as President and CEO of John Hancock Insurance and as the global leader of behavioral insurance for Manulife. Notably, he led John Hancock to embrace and implement the company's now market-leading position in behavioral insurance, which offers customers significant savings and rewards for living healthy. Prior to his current role, Mr. Tingle held various leadership roles across Marketing, Strategy, and Operations for John Hancock Insurance, building strong advanced analytics and overseeing new business, underwriting, claims, information technology, policy administration, customer service, and reinsurance administration.
Canada
Insurtech giant Equisoft lands $125M investment, eyes acquisitions
Montreal-based Equisoft, an insurance and investment software developer, today announced that it raised $125 million in venture equity. Itâs a large amount made more significant by the fact that the investment climate for insurtech vendors is growing increasingly challenging. A recent Gallagher Re report found that quarterly insurtech funding for Q4 fell to the lowest level since Q1 2020, decreasing 57% quarter on quarter from $2.35 billion in Q3 to $1.01 billion in Q4.
$70 million of Equisoftâs new tranche came from Investissement QuĂ©bec and the government of QuĂ©bec, with the remainder coming from Export Development Canada and Fondaction. CEO Luis Romero says that the funding will be put toward âglobal expansion,â both âorganically and through strategic acquisitions.â
âThe funding will strengthen our balance sheet and accelerate further development of our integrated life insurance software platform and wealth products to better serve our global customer base,â Romero told TechCrunch via email.