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With a market cap of $2 billion, Lemonade had traded at about eight times its annual sales. Most traditional insurers, like Allstate and Travelers, trade at around one multiple of the year’s sales. The price-to-sales ratio for Lemonade is seemingly reasonable relative to its growth expectations. Since it went public a couple of years ago, […]
The post Lemonade+Metromile: Bright spot on insurtech’s disruption roadmap first appeared on Daily Fintech.
Last few months have seen private market investors pouring capital into promising insurtech startups, while the public markets sent the value of recently public insurtech companies lower and lower. The decline in the value of public insurtech unicorns has been an oft-repeating theme. Contrarily, global insurtech venture activity has been hitting new highs. In 2021, […]
The post Insurtech capital markets: the ultimate progress indicator first appeared on Daily Fintech.
In its fourth-quarter and full-year 2021 shareholder letter, Lemonade’s CEO wrote that 2022 is expected to be a year of peak losses. This follows unfavorable development and product mix changes that plummeted 2021 loss ratios into the 90s, 20 points higher over comparable 2020 periods. The projection is that 2022 will see highest losses, with […]
The post Is Lemonade turning to be a lookalike? appeared first on Daily Fintech.
In the past year, technology stocks trailed on Wall Street, but insurtech stocks saw major declines. Lemonade fell to a market cap of $2.3B, more than 50% compared to its trading day price. Since its SPAC merger, Hippo’s market cap dropped to $1.5B from $5B. Root, a car insurance specialist went public in 2020 and […]
The post As Insurtech valuations tumble, Hippo Insurance gears for growth appeared first on Daily Fintech.
2021 has been momentous for deals. From AT&T’s media businesses merger with Discovery, Kansas City Southern railroad’s takeover and Square acquiring BNPL company Afterpay, global deals are on a roll. Transactions are expected to top $5 trillion this year. All this, while the pandemic is rising again, the global economy is still flaky, and developed […]
The post M&A braces for big moves in the New Year appeared first on Daily Fintech.
Insurers seemingly don’t attract the adulation they deserve from investors. Despite a core subset of insurers delivering strong operational results, share-to-price performance has largely lagged other financial companies. The KBW Nasdaq Insurance Index (KIX), which reflects performance of US carriers, has trailed performance of the Financial Select Sector SPDR Fund (XLF), which tracks financial-services companies, […]
The post Factors Underlying Insurtech valuations appeared first on Daily Fintech.
The Theme last week was InsurTech action from China
The Theme this week is agitation. The insurance industry is rattled. This week we bring you three stories that show customers, InsurTech ventures and incumbents all agitated; but all for different reasons.
For more about the Front Page Weekly CXO Briefing, please click here.
For this week we bring you three stories illustrating the theme of Agitation.
Story 1: Some life insurers unsure they can get results from digital
Extract, read more on Digital Insurance:
“Life insurers are still lagging other industries and even lines of insurance when it comes to leveraging data in the enterprise, including on the sales side, according to a report from RGAX.
Nearly a third said it is too expensive to introduce or expand digital marketing efforts, mostly because their companies aren’t equipped to recover the cost, RGAX found.”
The survey was conducted among small-to-mid size life insurers who hope to create a breakthrough with the help of digitalization. The cruel reality is that there is a high capital barrier for them to go through first.
Story 2: Customers Vote: State Farm or Lemonade?
Extract, read more on Insurance Thought Leadership:
“A recent social media dust-up between renters and homeowners insurance technology upstart Lemonade Insurance and old-line insurance industry stalwart State Farm motivated us to look at what their respective customers are saying about their experiences with the companies.
A little context: State Farm recently aired a television commercial poking fun at technology-focused entrants to the marketplace. Specifically, the commercial made fun of the use of bots (artificial intelligence) used to process claims.”
State Farm probably just wanted to stress the importance of real-person agent. But it got interpreted in another way. It could mark a significant moment of agitation between incumbents and startups.
Story 3: Marsh rolls out social unrest insurance coverage
Extract, read more on Life Insurance International:
“Marsh has introduced a standalone social unrest insurance plan that offers financial protection to businesses in event of losses.
The product, which is underwritten by Chaucer, provides coverage of up to $20m for denial of entry/leaving a property caused due to terrorism, protests, civil unrest and strikes.”
When it comes to agitations among regular people, it’s good to see we can seek insurance for help.
When the whole industry is on a fast track, some may be afraid of being left behind, some may worry that their efforts are made in vain. Thus agitation appears. It could be a good thing for customers if agitation induces more innovation, and more discounts.
Zarc Gin is an analyst for Warp Speed Fintech, a Fintech, especially InsurTech-focused Venture Capital based in China.
Get fresh daily insights from an amazing team of Fintech thought leaders around the world. Ride the Fintech wave by reading us daily in your email.
The Theme this week is cross-industry expansion. This indicates that insurance is getting a higher degree of integration with our lives.
The Insurtech Front Page Weekly CXO Briefing is all you need to know for the week, jargon free for executives, entrepreneurs and investors who want a piece of this huge, fast changing market. Each week we select one theme illustrated by 3 news items, because we know that you are busy. Our job is to filter out the noise, so you can read the signal. We bring you the raw news plus our take on why it is significant.
For this week we bring you three stories illustrating the theme of cross-industry expansion:
Story 1: Credit Karma Makes Significant Move with New Insurance Experience
Extract, read more on Business Wire:
“Credit Karma today announced its expansion within insurance. Launching today in California and Texas, Credit Karma’s members will be able to see what they could be paying for auto insurance based on what members like them are paying for the same coverage.
This move will address the mis-pricing issue of Americans’ auto insurance policies and will soon arm its more than 80 million members with the information needed to make the best decision on their insurance policy, without the headache. Credit Karma estimates that Americans overspend on auto insurance by nearly $21 billion per year.”
Credit Karma is already providing auto-related services to its users such as loans and evaluation of their cars. This move into insurance is apt and can be effective.
Story 2: Flipkart forays into insurance space, teams up with Bajaj Allianz
Extract, read more on The Economic Times:
“E-commerce major Flipkart Sunday said it is foraying into the insurance segment after securing a corporate agent license. To begin with, Flipkart has partnered Bajaj Allianz General Insurance to offer customised insurance solutions to power its mobile phone protection programme for all leading mobile phone brands that are sold on its platform, Flipkart said in a statement.”
News from India that is globally significant because it is one more example of an e-commerce giant moving into insurance. Amazon from America and Alibaba from China are already making this move. India is a big market with it’s own local champions like Flipkart, but what makes India such an interesting market to watch is that it is a market that big global players, such as Amazon and Alibaba, are fighting over. India is a battleground market. If any of these e-commerce giants can make the user experience of Insurance as easy as the user experience of e-commerce, they will change the lives of billions and make fortunes.
Story 3: WeWork taps Lemonade to offer insurance to WeLive members
Extract, read more on Techcrunch:
“WeWork has partnered with Lemonade to provide renters insurance to WeLive members.
WeLive is the residential offering from WeWork, offering members a fully-furnished apartment, complete with amenities like housekeeping, mailroom, and on-site laundry, on a flexible rental schedule. In other words, bicoastal workers or generally nomadic individuals can rent a short-term living space without worrying about all the extras.”
This is a great example of two big innovative ventures innovating together to deliver unique customer value. It is a fine example of the art of the partner. When your customers are almost from the same group, a partnership would be great to improve the quality of your service. That’s what Lemonade and WeWork are trying to accomplish. It is also another example of how Insurance is central to our lives and how if one makes what is essential but boring easy to buy and consume, then customers will buy.
Cross industry expansions can be actions like establishing a new business as well as building a partnership with players in other fields. Integration can amplify the value propositions for insurance industries. Tech giants like Amazons and Alibaba have done this in earlier times and I’m sure we will see more and more integrations between insurance and other industries.
Zarc Gin is an analyst for Warp Speed Fintech, a Fintech, especially InsurTech-focused Venture Capital based in China.
Get fresh daily insights from an amazing team of Fintech thought leaders around the world. Ride the Fintech wave by reading us daily in your email.