The Monthly Claim – August 2021
By Lexi Papa | August 31, 2021
A roundup of notable news and transactions in the Insurance and InsurTech sectors
The best articles from around the web for Insurance industry leaders
Market Moves: Aon and Willis Terminate $30B Merger; Aon to Pay $1B Break-up Fee via Insurance Journal:
- Aon and Willis Towers Watson announced that the firms have agreed to terminate their $30 billion business combination agreement and end litigation with the U.S. Department of Justice (DOJ).
- The proposed combination was first announced on March 9, 2020 and would have created the largest insurance broker.
- In connection with the termination of the business combination agreement, Aon will pay a $1 billion termination fee to Willis Towers Watson, Willis Towers Watson’s proposed scheme of arrangement has now lapsed, and both organizations will move forward independently.
Industry Trends: Insurers Expect COVID-19 Liability Claims Against Employers as Employees Return via Insurance Journal:
- Liability insurers on both sides of the Atlantic are scaling back the coverage they offer companies ahead of an expected wave of discrimination claims as employers call staff back to their desks after 18 months of pandemic-induced home working.
- There have been around 2,950 COVID-19-related employment lawsuits in the United States since the start of the pandemic, ranging from disputes over remote working to workplace safety and discrimination, law firm Fisher Phillips says.
- Now industry sources say companies are starting to trigger policies which protect them against the cost of defending discrimination lawsuits and compensation awards, so-called employment practices liability insurance (EPLI).
Industry Trends: Insurance Industry Most Frequent Focus of Ransomware: Report via Business Insurance:
- The Insurance industry was the most frequent focus of ransomware attacks in the first half of this year, while the overall number of cyberattack incidents increased 125%, according to an Accenture PLC report.
- Insurance accounted for 23% of the ransomware attacks by industry, followed by Consumer Goods and Services (17%) and Telecommunications (16%), according to the report.
- “Despite heightened awareness, government action and industry collaboration, ransomware is likely to remain one of the top threats to businesses globally,” the report said. “If anything, it has entered a new phase as threat actors adopt stronger pressure tactics and capitalize on opportunistic intrusion vectors.”
Market Moves: Gulfstream Insurance Admits Insolvency, Agrees to Liquidate via Insurance Journal:
- Personal residential insurer Gulfstream Property and Casualty Insurance Co. has agreed to liquidate according to a July 22 order signed by the Florida Office of Insurance Regulation.
- Gulfstream was placed under administrative supervision in late June after it failed to maintain the minimum surplus necessary to pay claims. Weeks earlier, ratings firm Demotech Inc. withdrew its “A” designation, citing the company’s shaky finances.
- Gulfstream suffered significant losses in 2020. The company reported a decrease in surplus of more than $5.2 million as of Dec. 31, 2020 compared with the same date in 2019 including a net loss of $22.6 million and a net underwriting loss of $34.9 million.
Market Data: Global InsurTech Funding Balloons to $4.8 Billion in Q2, Up 89% from Q1 to Push H1, 2021 Ahead of Full-year 2020 via Willis Towers Watson:
- Global investment in the InsurTech sector reached an emphatic record during H1, 2021, as half-year funding of $7.4 billion exceeded full-year investment in 2020, and in every other year, according to the new Quarterly InsurTech Briefing from Willis Towers Watson, a leading global advisory, broking and solutions company (NASDAQ: WLTW).
- The latest quarter saw 162 deals yield more than $4,824 million in investment, a 210% increase over Q2, 2020. The enormous quarterly total, itself more than any annual total before 2019, was driven largely by 15 mega-rounds of $100 million or more.
- InsurTechs focused on distribution accounted for 55% of start-up deals, and for 10 of the 15 mega-rounds. Most of the distribution InsurTechs target reduced dependence on agent channels. Of all Q2 deals, 73% were for P&C-related InsurTechs, while 43 companies raised funds for L&H technology.
Insights and intelligence on recent notable industry transactions.
Notable Property & Casualty Transactions
Brookfield Reinsurance Unit to Buy American National for $5.1 Billion via Reuters
- Brookfield Asset Management Inc’s reinsurance unit has agreed to buy insurer American National Group Inc for about $5.1 billion in an all-cash deal.
- The potential deal follows corporate results that show a return to hefty profits for insurers after they took a hit last year as claims rose due to the economic disruption caused by the COVID-19 pandemic.
TowerBrook and Further Global Announce Acquisition of Specialty Insurance Company ProSight Global, Inc. via PR Newswire
- TowerBrook Capital Partners L.P. (“TowerBrook”), an international investment management firm, and Further Global Capital Management (“Further Global”), a private equity firm focused on the Financial Services industry, announced the signing of a definitive merger agreement, under which affiliates of TowerBrook and Further Global will acquire all outstanding shares of common stock of ProSight Global, Inc. (NYSE: PROS) (“ProSight” or “the Company”), a domestic specialty insurance company, in an all-cash transaction valued at approximately $586,000,000.
- TowerBrook and Further Global’s investment in ProSight is the result of a targeted approach to the Insurance market. This acquisition aligns with TowerBrook’s investment strategy to back strong management teams operating in growth markets and builds on a long history of investing in the insurance and financial services industries.
Notable Life Insurance Transactions
Globe Life Acquires Beazley Benefits via PR Newswire
- Globe Life Inc. (NYSE: GL) announced it has acquired Beazley Benefits. Prior to the acquisition, Beazley Benefits was a part of Beazley Insurance Company, Inc. in the U.S., which is a subsidiary of London-based specialty insurer Beazley plc. This transaction, which closed on August 1, 2021, enhances Globe Life’s reach in the worksite market.
- Beazley Benefits specializes in customized supplemental health solutions for the employee benefits market, with a product line that includes Supplemental Medical, Group Limited Indemnity, Critical Illness, Short Term Disability, and Accidental Death & Dismemberment. Their wide range of capabilities includes benefits solutions combined with administrative services to assist employees in managing health care costs and easing plan administration. Beazley Benefits generated approximately $40 million of premium in 2020.
- Globe Life has continued its strategy to cultivate the delivery of solutions to meet the needs of working families across the country by continuing to innovate and partner with market-leading companies.
See our latest Sectorwatch research reports for a comprehensive list of Insurance industry M&A activity and valuation trends.
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