An article in the Insurance Journal said that: “The fallout from COVID-19 has intensified the focus on innovation. When growing your business face-to-face is restricted, you have little choice but to fall back on technology to maintain existing relationships but also to access new markets and grow your customer base,” said Joyce Chan, Hong Kong-based corporate insurance partner. “At the same time, in the face of balance sheet pressure, any innovation that can generate efficiencies and bring down the cost base is welcome.
Technology will continue to be a key feature of the growth agenda in the coming year as re/insurers seek out insurtech providers that can deliver a competitive edge, be it through acquisition, investment or partnership. The pandemic has accelerated the adoption of technology across the insurance industry, underpinning deals of every size, the report continued, noting that examples of insurers taking stakes in insurtech start-ups increased across every geography…There were 407 completed mergers and acquisitions (M&A) worldwide in the insurance sector in 2020, down from 419 the previous year, according to a report published by global law firm Clyde & Co.”
Active companies in the market this week include Reliance Global Group, Inc. (NASDAQ: RELI), Lemonade, Inc. (NYSE: LMND), Goosehead Insurance, Inc. (NASDAQ: GSHD), Root, Inc. (NASDAQ: ROOT), American International Group, Inc. (NYSE: AIG).
“An anticipated pandemic-induced dip in activity in the second half of the year failed to materialize, however, with 206 deals in H2 2020, which was slightly up from 201 in the first six months of the year, according to the report titled “Finding opportunity in adversity.
The Americas remained the most active region for M&A, with 192 deals in 2020, up 6% on 2019. It saw a spike in the second half of the year with 102 transactions – the highest number for five years – up from 90 in the first six months. Insurance transaction activity worldwide belied expectations in 2020. Dealmakers in the insurance industry, like many others, paused for reflection in the first half of the year, but not for long,” commented Ivor Edwards, head of Clyde & Co’s European Corporate Insurance Group.
Reliance Global Group, Inc. (NASDAQ: RELI) BREAKING NEWS: Reliance Global Group Reports 63% Increase in Revenue for 2020 and Provides Year-End Business Update – Reliance Global Group, Inc. which combines AI and cloud-based technologies with the personalized experience of a traditional insurance agency, today provided a business update and reported financial results for the year-ended December 31, 2020.
Ezra Beyman, CEO of Reliance Global Group, commented, “2020 was a transformative year for the Company. First, we continued our acquisition strategy with the purchase and successful integration of UIS Agency, LLC, a regional insurance agency serving the commercial transportation industry.
We now operate through seven wholly owned agencies with plans to continue our M&A strategy. Specifically, we are targeting growing and profitable businesses that we can buy at attractive multiples and with the ability to leverage both technology and economies of scale to gain significant efficiencies.”
“In early 2020, we made a strategic investment in Nsure.com and, more recently, we launched our own platform, 5minuteinsure.com. The goal of 5minuteinsure.com is to tap into the growing number of online shoppers. Utilizing artificial intelligence, in many cases we can provide competitive insurance quotes online within five minutes, with minimal data input by the customer. 5minuteinsure.com combines the best of a traditional insurance agency, including the option for direct agent interaction with the ability to bind a policy either online or offline. I am especially pleased to report that 5MinuteInsure.com, through our affiliated Reliance Insurtech division, has received access to sales capabilities through licenses granted to Reliance Insurtech to sell home and auto insurance in 43 states, with near-term plans to add additional states and carriers, as well as expand into additional types of insurance. We believe this state-of-the-art Insurtech platform has the potential to truly disrupt the industry.”
“We continue to enhance our infrastructure and expand our internal resources. Heading into 2021, we are accelerating our sales and marketing initiatives targeting large enterprises and employee organizations. We have also hired senior insurance industry executives to assist in both the rollout of our online offering, as well as accelerate our acquisition strategy. In addition, we significantly enhanced our balance sheet through the recent public offering for gross proceeds of $12.4 million concurrent with our listing on the Nasdaq. The combination of these events provides us a much stronger platform to execute our organic growth and acquisition strategies.”
“In 2020, revenue increased 63%, reflecting our continued growth and execution of our business model. Importantly, we incurred significant company expenses in 2020 related to preparations for our Nasdaq listing, while at the same time, we invested heavily in our infrastructure and operations to support our continued expansion. As a result, we believe we have built a highly scalable operation with the potential for high recurring revenue and operating margins.”
Other recent developments in the insurance industry this week include:
Lemonade, Inc. (NYSE: LMND) the insurance company powered by artificial intelligence and behavioral economics, recently announced it has more than one million customers. Lemonade hit this milestone about 1,500 days after its initial launch, some 15-45 years faster than industry leaders such as State Farm, Allstate, GEICO, and USAA.
“We’re proud to hit the one million customer mark so early in the life of the company,” said Shai Wininger, Lemonade co-founder and COO. “With every new customer, our system grows smarter, our underwriting gets better, and our prices become more accurate and fair. At Lemonade, one million customers translates into billions of data points, which feed our AI at an ever-growing speed. Quantity generates quality.”
Goosehead Insurance, Inc. (NASDAQ: GSHD), a rapidly growing independent personal lines insurance agency, recently announced results for the fourth quarter and full year ended December 31, 2020. Beginning with the fourth quarter and full year 2019, the Company began reporting results under accounting standard ASC 606. See Goosehead’s Annual Report on Form 10-K for the year ended December 31, 2019 for a discussion of the changes from year ended December 31, 2018 to the year ended December 31, 2019.
Fourth Quarter and Full Year 2020 Highlights Were: Revenues grew organically 48% to $34.7 million in the fourth quarter of 2020; full year 2020 revenues of $117.0 million grew 51% compared to 2019; Fourth quarter Core Revenues of $25.7 million increased 46%; full year 2020 Core Revenues of $95.1 million increased 41%; Fourth quarter net income of $5.3 million; net income attributable to Goosehead Insurance, Inc. of $2.8 million or $0.15 per basic share and $0.14 per diluted share; Fourth quarter and full year Adjusted EPS of $0.19 per share and $0.68, respectively; Full year Adjusted EBITDA of $27.8 million increased 59%; Total written premiums placed for the fourth quarter and full year 2020 increased 45% to $285 million and $1.074 billion, respectively; Policies in force grew 48% from the prior-year period to 713,000; Corporate sales headcount of 364 was up 47% year-over-year; and Total franchises increased 55% compared to the prior year period to 1,468; total operating franchises grew 45% compared to the prior-year period to 891
Root, Inc. (NASDAQ: ROOT), the parent company of Root Insurance Company, recently announced financial results for the quarter and fiscal year ended December 31, 2020. Root’s fourth quarter and fiscal year 2020 financial results and management commentary can be found by accessing the shareholder letter posted to the company’s investor relations website at ir.joinroot.com.
Root, Inc. is the parent company of Root Insurance Company. Root is a technology company revolutionizing personal insurance with a pricing model based upon fairness and a modern customer experience. Root’s modern, mobile-first customer experience is designed to make insurance simple.
AIG Life & Retirement, a division of American International Group, Inc. (NYSE: AIG) and a leading provider of annuities, recently announced a new protected lifetime income benefit for The Power Series of Index Annuities. Available exclusively through independent marketing organizations (IMOs), the new Lifetime Income Choice benefit guarantees income growth and creates added levels of choice and flexibility, including the opportunity to receive more income earlier in retirement.
Lifetime Income Choice offers two options—Max Income and Level Income—to help consumers tailor their income strategy to their individual lifestyle. The Max Income option maximizes income during the early, more active years of retirement, when spending tends to be highest, while Level Income provides a consistent and steady income for life. For enhanced protection in changing markets, both options guarantee income growth every year prior to activating their lifetime income benefit.
Source: PR Newswire
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