Earlier this month Carrier Management did an awesome summary of Buffet's thoughts about the listed full-stack insurtech: “We are not an insurance company. We’re a tech company,” he said, seemingly paraphrasing the remarks of an unnamed InsurTech executive. “Well, they’re an insurance company…A dozen people or so have raised a lot of money. They just don’t pay any attention to the fact that [they] sell insurance… In the end, they wrote insurance and overwhelmingly lost a lot of money since then”
In the past few weeks, these Insurtechs have published their Q1 financials. Let's take a look at how it is going.
- Loss ratio: 90% gross loss ratio in Q1 '22 (in line with the 90% loss ratio which led to a 167% COR for 2021)
- Burned cash: $59M in Q1 '22
- Short interest: 33.5% of float (MarketBeat data at May 15th)
- Market cap: $1.42B at May 27th (-46% YTD)
- Loss ratio: 76% gross loss ratio in Q1 '22 (significantly improved from 138% loss ratio which led to 178% COR for 2021)
- Burned cash: about $59M in Q1 '22
- Short interest: 1.6% of float (MarketBeat data at May 15th)
- Market cap: $0.80B at May 27th (-50% YTD)
- Loss ratio: 93% gross loss ratio in Q1 '22 (slightly improved from the 97% loss ratio which led to a 157% COR for 2021)
- Burned cash: about $57M in Q1 '22
- Short interest: 4,8% of shares (MarketBeat data at May 15th)
- Market cap: $0.36B at May 27th (-57% YTD)
Despite the facts and figures, fascinating stories show impressive resilience. After the publication of these financials, I did a LinkedIn poll to assess my network's current mood about these stocks.
The poster child of the insurtech passionate stays on top of the ranking!
I'm a firm believer that insurtech solutions will make the insurance sector stronger, therefore more capable of achieving its strategic goal of protecting people's lives. I hope the next wave of insurtech players will have more robust insurance fundamentals than the first wave and will not pretend that insurance ignorance is a competitive advantage.
I've been lucky over the past four years to work with Andrea Battista on Archimede SPAC, and - after the acquisition of Net Insurance - as a board member of the listed combined entity, which has overperformed the plan we designed initially. A concrete experience where insurtech solutions have been integrated into the insurance value chain in order to perform better the insurance job (to assess, manage and transfer risks). Lessons learned: tech & underwriting discipline!
We have seen hundreds of insurtech articles with click-baiting headlines claiming an incoming disruption in the insurance sector for the last seven years. Now they are shifting to the underwriting discipline -> https://techcrunch.com/2022/05/13/to-win-insurtech-2-0-focus-on-underwriting-before-growth/
Talking about past disruption expectations and current mood, the thoughts exchanged with Bill Harris, Chief Revenue Officer at Insuretech Connect add some more color.
Matteo: ITC is at its seventh edition; you have observed the entire first Insurtech wave. What is your critical review of these seven years. How are changed the thoughts from the industry leaders you have talked with for organizing the event?
Bill: When we launched ITC back in 2016, it was all about disruption, and we asked “Will insurtechs replace traditional carriers?” It’s evolved into a more symbiotic relationship. Now, carriers understand insurtechs can help enhance their offering, and especially how to be more customer centric. When we began 7 years ago, investment was everywhere, the first million was easy to get. We are now seeing a trend where it may be harder to get the early seed/Series A investments, but the investment amounts in later rounds are much bigger. To us it indicates that the VCs and CVCs know exactly what they are looking for and are not scared to invest massive rounds in companies that can really scale.
It's been interesting to observe insurtechs that have become carriers and gone public. A few on our team might say that it’s been more interesting to see the likes of Trov, Bold Penguin, and SingLife be acquired by carriers. Also, we are delighted to see how insurtechs such as Flock or Zego are evolving and expanding their lines of business. ITC is a platform where you come to see new and emerging insurtechs, plus new product launches from innovators that we’ve seen evolve over the past 7 years.
Matteo: InsurTech Fact & Figures is the headline of this newsletter. Could you share the evolution of some KPIs about ITC over the years?
Bill: Since 2016, there have been nearly 30k attendees to ITC, over 100k meetings booked through our app (and likely hundreds of thousands more organically), delegates have joined us from over 70 countries worldwide, and over 400 hours of content has been produced. In 2021, out of 5500 delegates from roughly 550 companies, our audience included 1,500 insurers and brokers, 700 insurtechs representing over $18B in funding, and 350+ investors. We witnessed the emotional power from meeting face-to-face. We’re well on track to have our biggest show ever in 2022, and eager to connect with our international delegates who we missed seeing during the past 2 pandemic years.
Matteo: What people should expect from ITC 2022?
Bill: We’ve developed a meaningful formula for ITC, so we will continue with a focus on making connections and showcasing the top thought leaders. We recently announced that McKinsey & Company is joining us at the presenting sponsor at ITCVegas, which is a great honor for us.
One innovation to our content is that we will host 14 distinct tracks across 7 stages to make it easier to plan your time. GroupTech Connect (FINEOS) and BrokerTech Connect (BrokerTech Ventures) will be back, and we will debut Capacity Connect with Stere.io. We’ll have an exciting expo hall with 300+ exhibitors, the Innovation Alley with 100 insurtech startups, the demo stage, and the unparalleled 1:1 networking.
PS the closing party is also a spectacular way to “connect” at ITC September 20-22 at Mandalay Bay, Las Vegas -- we look forward to seeing you again Matteo!
I'll be in Vegas (trying to beat my old record of 74 meetings in two days), and - as always done in the past years - I'll host the second plenary session of the North American IoT Insurance Observatory the day before the main ITC event. Where I'm inviting the executives of all the almost 70 organizations members of the IoT Insurance Observatory to discuss their journey in using IoT data in the insurance industry and the lessons learned for a profitable adoption.
Article originally published on Linkedin here.