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The Monthly Claim – Sept. 2021

By Emily Halstenberg | September 15, 2021

The Monthly Claim – September 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 TrendsRansomware had Been a ‘Game Changer’ for Cyber Insurance via Insurance Journal:

  • Ransomware attacks accounted for nearly one quarter of all cyber incidents globally last year, according to software company Bitdefender.
  • Herring said that a growing interdependence on technology, particularly during the ongoing COVID-19 pandemic, has made companies and organizations more vulnerable to the type of cyberattack that can have systemic effects.
  • The article adds that cyber insurers can shield their own risks in this area by updating policies, if needed, with language that reflects current exposures. This can help avoid challenges where those insured are without coverage in a needed area or where silent coverage is being provided under a cyber policy that wasn’t intended by the insurer.

Market MovesDemand Outpacing Supply in One of Best E&S Markets in 50 Years, Industry Veteran Says via Insurance Journal:

  • According to William R. Berkley, there have only been “two, or possibly three opportunities that have looked like this” that he has witnessed during the course of his career—opportunities where “demand for [insurance] products outstripped the supply of reasoned and intelligent suppliers.”
  • He added that economic conditions have created an especially strong environment for the growth of E&S business volumes. Because there are many businesses that have dramatically slowed down or closed, “there are new businesses starting or giving new birth to the old businesses, which automatically means they go into the E&S marketplace.”

Industry TrendsHow Many North American Carriers are Emphasizing Data Analytics? via Insurance Business Magazine:

  • A new report commissioned by Equisoft, and conducted by Celent, has looked into how North American insurers are creating value from the data they gather – and it turns out that most carriers have a clear understanding that the data they collect can be turned into valuable assets.
  • Although giving customers more of what they want matters, many respondents indicated that knowing how to price for those offers optimizes business when things scale up; 91% of carriers surveyed said they are prioritizing the use of data and analytic technologies to inform decisions on pricing.

Market DataQ2 2021 Emerging Tech Research: Insurtech via Pitchbook:

  • The Healthcare industry is increasingly turning to technology as a lifeline to improve the quality of care while lowering costs. Venture capital investors have seen that value proposition prove out in the Insurance space with a string of headline-making IPOs this year.
  • Pitchbooks’s Q2 Emerging Tech Research Enterprise HealthTech report breaks down the sector’s vital statistics and areas of opportunity.
  • InsurTech is a booming corner of the venture market, and health insurance startups have grabbed the bulk of that funding. They have proven disruptive due in part to clever business models and tech that takes advantage of increasingly accessible healthcare data.

Industry TrendsThe Internet of Things is Moving the Broker’s Cheese via Property Casualty 360:

  • Carriers are developing direct-to-consumer communication mechanisms, private equity has seen the profit margins for broker companies and has aggressively moved in to acquire and expand, brokers are facing increasing pressure to heavily invest in their technological transformation initiatives to maintain relevance, and now Internet of Things (IoT) devices have arrived that threaten to disrupt the fundamental insurance business model, and with it, broker commissions.
  • When you understand that IoT devices have the fundamental opportunity to provide extremely effective risk management/mitigation strategies at scale, which could ultimately reduce insurance premiums by anywhere from 15-40%, there is a definite motivation to at least learn all you can about this threat so you can prepare for if and when it becomes necessary to do so.

M&A Outlook

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

Notable Property & Casualty Transactions 

Newfront and ABD Enter Agreement to Combine to Build the Modern Insurance Experience via PR Newswire

  • The combined company, to be called Newfront, transforms the delivery of risk management and employee benefit solutions.
  • Newfront’s proprietary modern cloud-based insurance platform redefines the industry’s antiquated model, unlocking new insights and an enhanced experience for clients.
  • ABD brings deep insurance expertise, an award-winning culture, and extensive experience in delivering innovative solutions to today’s most complex risks, serving many of the preeminent global disruptors, including industry leaders in Life Sciences and Technology.

GuideWell to Acquire Triple-S Management in Combination Designed to Drive Health Care Affordability and Improve Health Outcomes in Florida and Puerto Rico via Triple-S Management Investor Relations

  • GuideWell Mutual Holding Corporation (“GuideWell”), a health solutions company and parent of Blue Cross and Blue Shield of Florida, Inc. (“Florida Blue”), and Triple-S Management Corporation (“Triple-S Management”) (NYSE: GTS), a leading health care services company in Puerto Rico, today announced they will combine to transform the healthcare experience for their members in Florida and Puerto Rico.
  • The combination brings together industry leaders – and builds on the companies’ complementary assets, cultures, and strategic visions.
  • “The Transaction expands GuideWell’s core insurance operations and positions Florida Blue and Triple-S Management for significant growth and meaningful value creation for the customers and communities we serve,” said Pat Geraghty, President and CEO of GuideWell and Florida Blue.

​​​​​​Notable Life Insurance Transactions 

India’s HDFC Life Bulks Up with $915 Million Acquisition via Reuters

  • HDFC Life Insurance (HDFL.NS) will buy battery maker Exide Industries’ (EXID.NS) Bengaluru-based life insurance unit for 67 billion rupees ($915 million), strengthening in Southern India as it positions for an expansion of the domestic market.
  • The deal is among the biggest yet in a sector where competition is heating up. India expects to float the initial public offering of dominant state-owned insurer Life Insurance Corp (LIC) this fiscal year.
  • Only 2.82% of India’s 1.3 billion population in 2019, or about 1 in every 35 Indians, had life insurance protection, according to the latest annual report from the country’s insurance regulator.

​​​​​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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