In a recent episode of The Connected Podcast, the spotlight is on the U.S. insurance industry's outlook for 2025 as analyzed by PwC. The industry is poised for a transformative year, fueled by a surge in mergers and acquisitions, especially in brokerage and MGA deals. This activity is spurred by a more favorable policy environment under a new administration and private equity firms aiming for gains. Remarkably, PwC highlights 307 insurance deals from May to mid-November 2024, more than doubling the previous six-month total.
Gallagher Re provides insights into the insurtech sector, noting a 7% increase in the number of deals, despite Q1 2024 funding dipping below $1 billion for the first time in four years. Although average valuations and deal sizes have decreased, leading to a "survival of the fittest" scenario, this environment fosters an agile and innovative insurtech sector poised for growth beyond 2025.
Meanwhile, Howden reports a surprising decrease in risk-adjusted property-catastrophe reinsurance rates by 8% on average, despite significant catastrophe losses. This counterintuitive trend is supported by increased demand, driven by higher exposures and asset values, and strong supply from both traditional and alternative markets.
Overall, the podcast segment paints a picture of an industry on the cusp of dynamic changes and innovations, promising a transformative landscape as it heads into 2025. In another segment, developments in the insurance industry take a dramatic turn with the unexpected death of UnitedHealthcare CEO Brian Thompson. This event has catalyzed discussions about widespread frustration with insurance practices, with bullet casings found at the scene bearing phrases like "delay," "deny," and "depose," underscoring public discontent akin to Jay Feinman's critique of the industry.
Contrasting this turmoil, the podcast also highlights positive strides within the industry. Roamly is expanding its reinsurance partnerships with SiriusPoint and Apollo, showcasing its robust Enterprise Platform and digital innovations in actuarial and underwriting processes. This move signals a broader trend towards digitalization and efficiency.
Additionally, Jones, a leader in AI-driven insurance verification, closed a $15 million Series B funding round. With backing led by NewSpring Capital, Jones aims to revolutionize the real estate and construction sectors by streamlining insurance documentation processes using AI. Their innovative AI Agents promise to enhance decision-making and reduce manual tasks, setting Jones at the forefront of technological advancements in managing insurance risks.
The podcast also covers key developments, such as USAA's phasing out of Noblr's standalone "Pay as You Drive" program as it integrates telematics-based insurance into a broader "Usage-Based Program." Noblr's expansion to 15 states has been stymied by system incompatibilities, forcing policyholders to reapply under USAA's plans, with new Noblr policies ending in Colorado by January 2025.
California's Senate Bill 1120— "Physicians Make Decisions Act"—aims to address the issue of high insurance claim denials, ensuring AI algorithms cannot solely dictate coverage denials, thereby preserving human oversight. The episode also explores the transformative potential of generative AI in the insurance industry, balancing automation with human connectivity amidst rising cyber threats.
In this segment of The Connected Podcast, the discussion centers on the evolving challenges within the Canadian insurance industry, primarily driven by rising construction costs and an increase in natural disasters. Over the past five years, there has been a d
