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The Monthly Claim – October 2021

By Emily Halstenberg | October 28, 2021

The Monthly Claim – October 2021

A roundup of notable news and transactions in the Insurance and InsurTech sectors

Industry Updates

The best articles from around the web for Insurance industry leaders

Industry TrendsInsurance’s Next Chapter Will be Customer Experience & Payment Solutions via PropertyCasualty360:

  • Without a doubt, the next chapter for insurance will have a renewed focus on customers. Customer experience is one of the major drivers across all industries in 2021 — and insurance is no exception. Insurance customers, like everyone else, expect a modern customer experience now more than ever.
  • On the product side, as companies like Thimble have demonstrated, being customer-centric means developing offerings that reflect consumer interest in more flexible, on-demand insurance — a whopping 88% of consumers want more personalized insurance products.
  • Of all the areas where customer experience can improve in the Insurance industry, payments solutions are the holy grail. While payments are arguably the most critical moment in the customer journey, in insurance, this fundamental process is fragmented, tedious, and complex for everyone involved, from the insured to the carrier to the distributor.
  • 7 Mile Advisors recently advised payments system integrator Software Corporation in its sale to Persistent Systems, which highlights this trend.

Industry TrendsMost Carriers Leveraging Data, Analytics for Pricing Decisions via PropertyCasualty360:

  • When it comes to creating value from data, insurance companies find that leveraging it to build actuarial pricing models brings the biggest returns, according to a survey by Equisoft and Celent, which revealed 91% of carriers use data and analytics to make pricing decisions.
  • Automating underwriting decisions, assessing customer satisfaction, gauging agent effectiveness, and policyholder retention round out the top five areas carriers are finding value from the data they collect.
  • When it comes to embracing an analytics-first approach, insurers reported that not having a data-driven culture is the biggest challenge they face. Additionally, integrating multiple systems and vendors and product-centric system silos were also cited as major hurdles.

Market MovesCyber Insurance Premiums Soar: RPS via Business Insurance:

  • Industries hardest hit by cybercrime have seen premium increases as high as 300% at renewal, Risk Placement Services Inc., a unit of Arthur J. Gallagher & Co., said in a report.
  • Even with the right cybersecurity controls in place, organizations are finding it impossible to secure 2021 coverage at 2020 rates, RPS said in its U.S. Cyber Insurance Market Outlook report.
  • Companies and organizations in Education, Public Entity/Government, Healthcare, Construction, and Manufacturing are among those taking the brunt of price increases, according to the report.

Industry TrendsHow are U.S. Surplus Lines Insurers Coping with Market Upheaval? via Insurance Business Magazine:

  • Through systemic challenges like the COVID-19 pandemic and resulting economic depression, the rise of social inflation, and the ever-increasing frequency and severity of natural catastrophe events, the E&S market has been unwavering on its record growth trajectory.
  • In 2020, surplus lines direct written premium (DWP) hit a new high of $66.1 billion, a 17.4% increase from the $56.3 billion recorded in 2019 – which was actually the first year the industry had ever exceeded the $50 billion DWP mark.
  • “When you look at the growth from 2019 to 2020, we really saw the surplus lines market be able to come through the economic [uncertainty] or the market upheaval that coincided with the onset of COVID-19,” said David Blades, Senior Financial Analyst at AM Best Company.

Market DataLife Insurance Sales Strong Across Product Lines In 2Q, Wink Reports via Insurance News Net:

  • Non-variable universal life sales for the second quarter were $779.2 million, up 19.9% when compared to the previous quarter and up 18.1% as compared to the same period last year, according to Wink’s Sales & Market Report.
  • Noteworthy highlights for total non-variable universal life sales in the second quarter included National Life Group gaining the No. 1 overall sales ranking for non-variable universal life sales, with a market share of 13.7%. Transamerica Life’s Transamerica Foundation IUL was the No. 1 selling product for non-variable universal life sales, for all channels combined.
  • The average premium per whole life policy for the quarter was $3,465, an increase of nearly 30% from the prior quarter.

M&A Outlook

Insights and intelligence on recent notable industry transactions.​​​

Notable Property & Casualty Transactions 

Allstate Completes Sale of Life Insurance Company of New York via Insurance Journal:

  • The Allstate Corp. moved closer to its complete exit from the life insurance and annuity business with the closing of the sale of its Allstate Life Insurance Company of New York to Wilton Re for approximately $400 million.
  • The ALNY transaction, along with the previously announced agreement to sell Allstate Life Insurance Co. (ALIC) to Everlake US Holdings Co., an entity managed by Blackstone Group., for $2.8 billion, will complete Allstate’s exit from the life and annuity businesses.
  • “Closing on the sale of ALNY is a significant step in Allstate’s strategy of increasing personal property-liability market share and expanding protection services, while deploying capital out of the life and annuity businesses,” said Mario Rizzo, Chief Financial Officer of Allstate.

Coalition Acquires Attune to Shape the Future of Insurance via Forbes:

  • Coalition announced the acquisition of Attune — creating the world’s largest commercial InsurTech provider. The combined company serves more than 130,000 policyholders, providing cyber and technology insurance along with the proactive risk management clients need to avoid filing insurance claims.
  • As a result of the acquisition, Coalition expands the reach of its cyber insurance to more policyholders through the Attune marketplace. In exchange, the analytics and machine learning of Coalition will be applied to the broader set of Attune’s insurance offerings to enable better risk intelligence and mitigation.
  • Moving forward, Attune will continue to operate as a standalone business. However, in addition to the standard mix of businessowner’s policy, workers’ compensation, general liability, professional liability, and excess liability insurance, the Attune brokers will now also be able to offer Coalition’s cyber insurance offering, and they will have access to Coalition’s technology and data capabilities to enhance underwriting and improve risk management.

​​​​​​Notable Life Insurance Transactions 

Insurer Chubb to Acquire Cigna’s Business in Asia, Turkey for $5.8 Billion via Reuters:

  • U.S. insurer Chubb Ltd has agreed to buy health insurer Cigna Corp’s (CI.N) life, accident, and supplemental benefits businesses in Asia Pacific and Turkey for $5.75 billion in cash, both insurers said, marking the latest consolidation in Asia’s insurance sector.
  • In a statement issued, Chubb said it will acquire Cigna’s A&H (accident and health) and life business in South Korea, Taiwan, New Zealand, Thailand, Hong Kong
  • Chubb said the acquisition will boost Asia’s share of its global portfolio to $7 billion from about $4 billion in net premiums written, representing about 20% of the company’s total business, excluding China.

​​​​​See our latest Sectorwatch research reports for a comprehensive list of Insurance industry M&A activity and valuation trends.

About 7 Mile Advisors

7MA provides specialized Investment Banking & Advisory Services to the professional service firms in the Consumer Products & Retail industries. We help our clients determine the right strategic partners for their businesses, transition ownership, raise capital, grow through acquisitions, and evaluate new markets. We advise our clients on M&A and private capital transactions, and provide unique market insights. Our team brings experience and energy to all of our engagements, with a focus on helping our clients navigate a changing marketplace.

To learn more about how 7 Mile Advisors can help you evaluate and execute on strategic M&A or private capital alternatives for your business, please visit our website www.7mileadvisors.com.

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