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The firm will no longer have to compete with one hand tied behind its back.
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From here on out, insurers will likely have to rely on the strength of their individual stories.
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Avoiding an antitrust fight aids execution, but creates uncomfortable optics around the multiple paid.
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Flexpoint secured a higher sum-of-the-parts valuation by facilitating the break-up.
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The agreement from Fleming to honour original terms still leaves it open to long-term damage.
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Challenges include integration, delevering, winning staff over and building a compelling equity story.
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The oversubscription may signal additional capacity waiting on the sidelines.
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Attendees noted the increased presence of service providers and carriers.
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A more business-friendly approach will be offset by increased uncertainty.
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Long-term confidence in the market depends on the details of the new tax rule.
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Reinsurers are reporting stellar 2023 results – what they do with the earnings will be crucial.
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It’s unsurprising, following the Corvus-Travelers transaction.
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The firm took a major reserve charge and has gone into remediation mode.
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Sources said Stone Point and CD&R will each have stakes of around 35%.
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A minority view gaining currency is that 2016-19 will not be the only problem.
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Given a number of complexities, the landing zone on a take-out price is small.
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Putting together two “show me” stories risks investor skepticism.
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The firm may be a victim of its own success and size but a challenging macro landscape is also presenting obstacles for levered brokers as The Squeeze 2.0 looms.
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Organic growth will slow from historically elevated levels and the increased cost of debt will take its toll.
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If the Floridian goes through with a listing, it will be a true test of whether the public markets believe that the state’s fragmented insurance market is fixed, or on its way to being so.
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The US market’s messaging around E&S growth means the sector will likely face ever-greater scrutiny in 2024.
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Carriers will be taking more risk net this year – which may arrest the speed of decline in cyber pricing.
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January 1, 2024 was a “spotty” renewal, with the most over-subscribed deals being those bought by the major global cedants with good track records, whereas others did not attract as much attention.
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NFP will need to be brought close enough to realize the benefits, but not so close its talent feels smothered.
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Sources suggest that Aon has been proactive in weighing acquisitions since Q4, with a US mid-market platform the obvious gap.
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The reforms are working for claims filed after December 2022, but attorneys are still litigating claims filed prior to the legislation.
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For some time now, property has been doing the heavy lifting around growth and rate rises in E&S.
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The loss threats come as the space is going through a softening cycle, with 2%-2.5% rates and a few sources noting cases of 1.7%-1.8%.
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Its confederation of insurance subsidiaries will have to operate with fewer strategic advantages than they do today.
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AM Best’s decision to remove second-largest front Clear Blue from under review is a small positive development for the fronting sector, but caution is still needed.
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Insurers should reserve as conservatively as possible, maximize their product set, and decide if they are buyers or sellers.
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Sources agree that there are others that could follow a similar playbook, but there are three key considerations to keep in mind when pursuing a strategic-on-InsurTech transaction.
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Trading at just 0.6x book, the firm is a cheap option for an insurer which is looking to enter E&S, or is underweight in the sector.
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The broker has not been acquisitive since the deal to create the group in 2015, and has divested a number of its units in that time.
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The low multiple shapes the decision set of the management team, negatively impacts staff, and creates potential opportunities for rivals.
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APCIA's annual meeting last year took place during the post-Hurricane Ian stand-off, but despite the greater calm and certainty surrounding the run-up to this year’s January 1 renewal, there are several key themes to debate at the event.
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The pendulum that swung towards a focus on growth for the past few years is now swinging towards profitability and increased partnership.
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At a point when cyber rates are falling and capacity is plentiful in high excess layers, the mutual plans have the wider cyber market somewhat perplexed.
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At least one carrier struck a note of caution during Q3 earnings about the ongoing rapid growth story in surplus lines.
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The 3x3 plan takes the things about the firm over the last decade that have been distinctive and intensifies them.
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Will this year be a repeat of a shift from “growth at all costs” to “flight to quality”, or will we see the InsurTech space bounce back in the direction of 2021 optimism?
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A number of players suggested that the cost components of first-party claims were up between 30%-50% on that seen during Ransomware Wave One.
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Inside P&C has independently confirmed that the bank is working on a full sale of its insurance operation amid a challenging banking environment.
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Broker consolidation, angst about loss trends in long-tail lines and the confidence of the E&S market were key themes in Colorado Springs.
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Now that the tides have turned from a “growth-only” to a “profitability first” mindset, companies are letting go of the additional hires and focusing on insurance fundamentals and insurance expertise.
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Performance overall has been good, but there have been insurance M&A missteps and its share price has lagged.
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Reinsurers seem unwilling to concede on ground won, but insurers continue to feel the pain in an elevated cat environment.
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It is more dependent on property, and its longevity is uncertain.
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The market has passed a watershed around the apportionment of losses for attritional cat events between insurers and reinsurers.
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Industry loss estimates range from $3bn to $10bn, but loss figures will become clearer in the days to come.
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In a recent report titled “TFC: Primed for activist”, Wells Fargo notes investor discontent and lists pressing issues to be addressed at Truist.
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The consequences of Vesttoo will hurt the fronting companies, but the changes are less important than the role it plays in uncovering what was already there.
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The question of how to finance the private brokers no longer begins and ends with a PE flip.
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Areas of focus should include hiring external talent, securing capital for M&A, speeding up US growth, and answering the reinsurance question.
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Adoption of telematics is the first step, but the next step is analyzing the data and using it to make better drivers via retraining, rewards and incentives.
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The carrier could be the first tech-enabled underwriting business to test public investor appetite since the heady days of 2020.
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A recent report from Howden shows ransomware activity is up 48% year-on-year.
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The first signs of limit expansion, growing appetite in the admitted market, and retail brokers' impatience with wholesalers are all evident.
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The group’s returns have been driven by Two Sigma, but the total return model is perceived as toxic.
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Right now firms pursuing this strategy are winning, although there are some potential slow-burn issues to watch.
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It’s unclear how long some insurers will be able to sustain the cost of doing business in Florida, whether the question is making it through another quarter, another hurricane season or another renewal.
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The pivot from the industry’s arch decentralizer underscores the opportunities brokers are chasing in a deteriorating operating environment.
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The group exited an off-strategy business at an attractive valuation – now it must give a clearer indication of where it is going.
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Strong rhetoric from Munich Re means the US market will sooner or later have to take a position on cyber war wordings.
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The company has been weakened somewhat, and the base case now is a return to grinding out new CEO Scott Egan’s refined strategy.
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When a Grade A franchise like Hub refis at this kind of valuation, the read across to other assets is highly negative.
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Senior departures, the Corebridge stock price and the arrival of Dan Loeb all throw up additional obstacles.
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The billionaire’s mooted take-private will hinder CEO Egan’s efforts to steady the ship.
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Cutting a multi-billion carrier in two looks likely to be the preserve of a select group.
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While there were sparks of cheerfulness among attendees, a careful reading of the room showed that rationalism is superseding optimism.
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Sources suggest that Aon has been proactive in weighing acquisitions since Q4, with a US mid-market platform the obvious gap.
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The fronting carrier’s reinsurance write-down is the first crack in the segment’s impressive edifice – it won’t be the last.
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For years, Florida attorneys have utilized one-way attorney fees and assignment of benefits to bleed the insurance market of thousands of dollars.
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The new CEO is perpetuating what has worked in his predecessor’s strategy and refining certain elements.
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American insurance broker Hub International is working with investment bank Morgan Stanley to sell a minority stake in itself in a $25 billion deal.
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Macro forces are set to challenge the structural advantages which have boosted the MGA sector in recent years.
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The $500mn puts PCF in a position to pay substantial earnout liabilities, but also means it must find a way to get growth to outpace the coupon.
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Management of the insurance broking business should seek to seize the opportunities of independence with both hands.
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The move fits the broader strategy around dampening volatility, but sourcing capacity in the US domestic market will be tough.
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As we stand today, the InsurTech consolidation prophecy has not come to pass, even after a period of tanked valuations and dwindled access to capital.
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If January’s trends are any indication, the next step for Florida’s plaintiff attorneys will be to redirect their efforts to another piece of the market.
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A canvass of Florida executives by Inside P&C suggests glimmers of an improved claims environment ahead.
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Increased cost of capital is cooling tuck-in M&A, encouraging a pivot to organic growth and forcing greater creativity around financing.
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The proposed change could disrupt M&A at brokers, shift the calculus in favor of team lifts and dial up C-suite focus on becoming an employer of choice.
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The firm’s strategy to consolidate trading relationships faces fundamental, cyclical and company-specific challenges.
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Larger, better performing, more diversified and more E&S-heavy insurers will be better able to prosper in a more volatile environment.
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Long-term, structural challenges in the class have now been laid bare following the contraction in the treaty market.
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The bank is running a process to seek a minority stake sale of its broking arm, and is in talks with Stone Point and CD&R.
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2022 marked a reversal from last year’s unprecedented levels of global investment in InsurTech as the macroeconomic scenario flipped and investors put lossmaking companies under a magnifying glass.
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Several structural factors, including the pricing cycle, make insurers more insulated from US activist states.
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Consistent underwriting performance, the completion of the exit from life, acquisitions, organic growth and succession planning will all be focuses.
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Private equity is cautious around even the hard market opportunity in cat.
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The intention to potentially sell Attune illustrates Coalition’s desire to refocus its story on cyber – where valuations have held best in harsh market conditions for InsurTechs.
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Normalized cat returns of 25%-30% do not seem to be persuading reinsurers to dial up risk.
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Tighter debt markets and a weakening growth outlook is now putting pressure on private broker multiples.
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Universal P&C, the FHCF, Axis, Berkshire and Nephila are among the firms that will be in focus as the loss develops.