InsurTech/M&A/Financeđ°/Collaboration
Gallagher acquires AssuredPartners for $13.45 billion
Arthur J Gallagher & Co has signed a definitive agreement to acquire AssuredPartners, a leading US-based insurance broker, for $13.45 billion in an all-cash transaction.
J Patrick Gallagher Jr, chairman and CEO of Arthur J Gallagher & Co, highlighted the strategic benefits of the acquisition, emphasizing the compatibility between the two companies.
"We have held in high regard the fast-growing AssuredPartners franchise since its founding in 2011. AssuredPartners' entrepreneurial spirit, broad US footprint, and middle-market focus make them an ideal merger partner for Gallagher," he said.
Gallagher also noted the opportunities to further leverage the firm's industry expertise, data analytics, and specialty products. "I look forward to welcoming the 10,900 AssuredPartners colleagues to our growing Gallagher family of professionals," he said.
2025 PREDICTIONS
Reinsurance market to stabilise next year, pricing to return to ~2023 levels: JP Morgan - Reinsurance News
Analysts at JP Morgan expect the reinsurance market to stabilise in 2025 with pricing at still healthy levels despite minor declines, while profitability should be supported by a continuation of firm terms and conditions as attachment points hold.
With the January 1st, 2025, reinsurance renewals fast approaching, industry observers will be wondering how rates will trend in 2025 after another year of more than $100 billion of insured nat cat losses and the active Atlantic hurricane season.
Prior to the hurricane landfalls in the US this year, market consensus pointed to some softening at 1.1, and while losses from the storms arenât expected to drive further hardening, analysts now foresee a more stable environment for the sector in 2025.
âIn reinsurance, the market is expected to stabilise with pricing likely to see minor declines (in the low single digits we believe) in 2025 which would still leave pricing at healthy levels,â says JP Morgan.
News
Back-to-back class actions allege Progressive undervalues totaled cars
Other major insurers, including USAA and The Hartford, have faced similar allegations this year.
In California, District Attorney Pamela Price brought a similar case against Progressive, USAA and other insurance companies in April alleging similar violations of state law.
Progressive is facing class action lawsuits in both Kansas and Maryland for allegedly undervaluing the actual cash value of totaled vehicles.
Of course, claims that the auto insurance industry undervalues totaled cars are not new.
In California, District Attorney Pamela Price brought a similar case against Progressive, USAA and other insurance companies in April alleging similar violations of state law.
Further, The Hartford faced the same allegations brought in January in Connecticut state court.
The class actions, Williams v. Progressive Specialty Insurance and Shubkagel v. Progressive Direct Insurance, surfaced on Law.com Radar.
Progressive spokesperson Jeff Sibel did not respond to a request for comment.
According to the lawsuits, Mitchell International Inc., a third party that develops software for auto insurance companies to use for claims management, allegedly prepared each valuation report to determine the actual cash value of the totaled vehicles.
However, the plaintiffs claim Progressive uses the data to "systemically thumb the scale" to lower the value through methods that allegedly stray from appraisal standards and the used car industry's pricing and practices.
SageSure and SURE Launch Commercial Capacity in CaliforniaSageSure and SURE Launch Commercial Capacity in California
SURE, in partnership with SageSure, recently launched its first nonadmitted business owners policy in California. SageSure specializes in property insurance for catastrophe-exposed markets. To date, SageSure offers more than 50 competitively priced insurance products in 14 coastal states on behalf of its highly rated carrier partners.
The BOP program is SURE's third solution to help address the demand for reliable coverage in the state. The BOP solution comes at a crucial time for California business owners, with fewer insurance options due to increasing wildfire risks. The expansion is a direct response to the market's strong appetite for reliable commercial products.
SURE has introduced a range of solutions to California this year, including surplus lines dwelling fire and homeowners coverage. It responds to the market's demand for dependable coverage options, given that 58% of property insurers have stopped writing new business in the state, SageSure claims.
Predict & Prevent
Exclusive Feature - December - REInsurePro
Smart devices are revolutionizing property management, blending innovation with practical benefits to mitigate risks, lower repair costs, and transform how insurers assess claims and offer discounts
IN AN era where technology permeates every aspect of our lives, smart home devices are becoming a mainstay in rental properties.
From smart thermostats to smart alarms, these technologies have had a transformative effect on property risk management, and insurers are taking notice.
For Jason Jones, senior vice president of risk management at REInsurePro, these technologies are a valuable addition to the property management toolkit, though not a panacea. Insurance carriers, for their part, appear optimistic about the potential of these technologies to reduce claims.
âIt shouldnât wholly replace the role of a property manager to visit the property regularly,â Jones said. âBut it adds that extra layer. If Iâm out of town or if my manager canât get there, I have a few safeguards in place that could help out in a claim scenario.â
Jones emphasized the tremendous benefits of these technologies, especially when it comes to early detection. âThat early response helps mitigate damage, reduces repair costs, and shortens the timeline of recovery â benefits that are in everyoneâs best interest,â he said.
Mitigating the costliest property risks
Water damage is a costly and common issue for property owners. Smart leak detectors are a relatively small investment compared to the financial fallout from undetected leaks.
There are two main types of leak detection systems: Sensor-based systems, which are more affordable and easier to install, use sensors placed near high-risk areas, such as under sinks or next to appliances, and alert you if they detect moisture. Some models offer push notifications to your smartphone, while others make an audible alert.
Financial Results
Personal Lines Recovery Boosts US Property/Casualty Insurance Profits
Potential for further improvement in U.S. property/casualty insurance personal lines sector results and higher investment income create a likelihood for modestly better industry underwriting and operating profits in 2025, Fitch Ratings says. Fitchâs sector outlook for U.S. personal lines insurance is Improving, while the outlook for U.S. commercial lines insurance is Neutral.
Statutory financial performance for U.S. property/casualty insurers significantly improved in the first nine months of 2024. Personal auto results are likely to generate break-even or better combined ratios as pricing trends are moderating, but remain largely positive into 2025. In contrast, commercial line results may modestly deteriorate if price increases do not keep pace with loss costs.
Ongoing positive pricing trends led to strong premium growth in 9M24, with industry net written premiums up by 8.7% and net earned premiums 10.2% yoy. The industry returned to an underwriting gain with the combined ratio moving to 97.8% for the period, nearly six percentage points better than the 9M2023 figure. Losses from Hurricane Milton and other items will negatively affect 4Q24 results, but we anticipate the full-year combined ratio will remain below 100%.
Direct written premiums (DWP) increased by nearly 14% in both personal auto and homeowners for 9M24 due to ongoing substantial premium rate hikes. Rate increases are now moderating, but results are likely to further improve in 2025 as higher premiums flow through earnings amid tempering loss severity. Homeownersâ segment results will remain vulnerable to volatility from catastrophe losses.
Bestâs Market Segment Report: Favorable Signs for US Nonstandard Auto Insurers
Following two years of unprofitable but improving results, the U.S. nonstandard auto insurance segment has notched a slight profit for the first half of 2024, according to a new AM Best report.
âThe key differences have been in the combined ratios for the two composites, measuring bottom-line underwriting profitability. The personal auto line also benefits from being a leader in leveraging current technology in all operational areas, including claims, underwriting, and distributionâ
Insurer initiatives to promote safer driving habits, counter rising loss costs, and help improve auto fatality rates have more broadly benefited the underwriting performance for personal auto writers, and provided a lift for nonstandard auto insurers.
The Bestâs Market Segment Report, âFavorable Signs for Nonstandard Auto Insurers,â states that the results of the companies that comprise AM Bestâs private passenger nonstandard auto (PPNSA) composite generated underwriting income of $13 million in the first half of 2024. This compares favorably with the $457 million underwriting loss reported for the same prior-year period.
Announcements
Crash Champions Presents $200,000 to Collision Engineering at 11th Annual Charity Golf Outing
[Ed. Note: Auto insurance loss costs have been impacted by several pressures, including labor costs from repair technician shortages. Kudos to Enterprise Mobility, Crash Champions and Raken Technical College for putting their resources and influence where it matters - investing in people and the future. We particularly like the moniker, "Collision Engineer" as today's modern vehicles are highly sophisticated and require such advanced capabilities, deserving the title]
The Crash Champions Collision Repair Team today proudly announced a $200,000 contribution to Collision Engineering, presented at the organizationâs Charity Golf Outing. The presentation marked the capstone of Crash Championsâ 11th annual signature fundraising event, which brings together hundreds of collision repair industry professionals, vendors, and partners to raise funds for deserving non-profit organizations.
The 2024 Golf Outing, which took place Dec. 5 at Monarch Beach Golf Links in Dana Point, California, marked the eventâs first contribution to Collision Engineering as part of Crash Championsâ growing commitment to support the organization.
Co-founded by the Enterprise Mobility Foundation and Ranken Technical College in St. Louis, Collision Engineering was created in 2020 to proactively address the technician shortage by fostering collaboration between education and industry to develop a sustainable pipeline of skilled professionals who are well-equipped to perform proper and safe vehicle repairs.
âThe entire Collision Engineering team, along with our network of partner schools, instructors and students, are so grateful for the generosity of Crash Champions and all the collision repair industry partners who contributed to this incredible donation,â said Mary Mahoney, vice president at Enterprise Mobility. âEnterprise Mobility has a huge stake in the health of the automotive repair industry and is committed to doing our part to invest in its success. But we absolutely cannot do it alone. Contributions like this one exemplify the importance of industry partners coming together to address the global technician shortage and develop the next generation of collision repair professionals.â
The $200,000 gift is the single largest donation in the 11-year history of the Crash Champions Charity Golf Outing. Funds were raised through participation in the golf outing along with a corresponding auction and direct contributions by participants.
âAt Crash Champions, our vision statement is âWe Champion Peopleâ, and this event symbolizes just how the industry can come together to make a significant positive impact for an organization that is committed to investing in young people,â said Crash Champions Founder and CEO Matt Ebert. âCollision Engineeringâs program is inspiring and training the next generation of body technicians by connecting them with forward-thinking colleges and a hands-on apprenticeship model that prepares them for a successful career. Weâre proud to support their team and are grateful for the hundreds of partners and vendors who made this event a tremendous success.â
To learn more about the Collision Engineering program and its network of partner colleges across the U.S. visit www.beacollisionengineer.com.
Crash Champions operates a leading lineup of more than 650 high-quality collision repair centers in 37 states across the U.S. To learn more about the company and explore career opportunities, visit www.careers.crashchampions.com today.
Insurance Digitalization
Shelter InsuranceÂŽ Selects Guidewire to Transform Business Operations | Business Wire
Shelter InsuranceÂŽ (Shelter), a property and casualty (P&C) insurance company offering insurance sold by agents in 21 states, and Guidewire (NYSE: GWRE) announced that Shelter selected Guidewire InsuranceSuite to power the companyâs core business, simplify its IT operations and help deliver additional value to agents, policyholders and employees. The selection and implementation of Guidewire is a key component of Shelterâs Monarch business transformation. The Monarch transformation will focus on improving and expanding Shelterâs capabilities to enable Shelterâs continued success in the market. Guidewire PartnerConnect Consulting Global Strategic member PwC has been selected to lead the implementation project.
âWe are pleased to help guide Shelterâs technological transformation. In today's dynamic and ever-changing business environment, cloud transformation has become an essential requirement rather than a luxuryâ
Shelter Executive Vice President Teresa Magruder said, âShelter believes using technology and data to re-imagine business processes and workflows is the key to value creation for our agents, employees and customers. Guidewire fits with our Monarch business transformation initiative to highlight our strategic investment in technology and delivery of new business processes and models to keep Shelter in an industry-leading position now and into the future.â
Podcast
The Story of Insurance in America | Leader's Edge Magazine
he free press waging a war of words on companies in the Wild West. A massive parade celebrating the tricentennial of the Massachusetts colony. These are all scenes that shaped the way Americanâs think about risk, from author Katherine Hempsteadâs new book Uncovered: The Story of Insurance in America. The book shares how the American insurance industry developed over a period of centuries.
In this discussion, Hempstead takes us through the stories and people in her book.
Podcast Sponsor
Audio Version - 'Connected: The Podcast' --- Sponsored by Pulse Podcasts
Co-curated by Alan Demers and Stephen Applebaum, The Connected Podcast is a condensedaudio version of the day's âConnected' newsletter, a daily scan of all the happenings in the world of Insurance & InsurTech News.
Pulse Podcasts: Introduce a new way for your audience to hear your voice! We are a podcast creation service that helps businesses turn their written content, like blog posts and news articles, into beautiful podcasts. Our platform writes the script, records the voices, and mixes the audio to create engaging content for your audience. It's affordable and has super-fast turnaround!
LISTEN AND SUBSCRIBE BELOW