IPO Corner: Inside The InsureTech Revolution

Often in this segment, we talk a lot about forward-thinking technologies and imaginative ventures on the forefront of industry… and we hope you enjoy it. But, today, we’d like to bring things back down to earth a little bit and talk more about a subject that touches every single American, whether they are knee high to a grasshopper or tall and strapping, and that’s insurance. From life and health insurance, to flood, fire, and even insurance for our devices, it’s a fact of life.

Insurance has had a weird year… and is experiencing a discomfort shared by pretty much every other space right now. But there’s a reason for this discomfort, and it’s more than just normal growing pains. This particular discomfort is that which comes from being forced to rethink tried and true strategies to ensure continued competitive edge… and insurance, like other sectors, must make sure they are operating with purpose at pace with societal change.

Forced Innovation

Trends we’re seeing come down the pike include “as-a-service” solutions to meet morphing demographics, rethinking models designed for workplaces amid the shifting landscape there, a shift to value realization over rapid infrastructure build-out, and ESG competitive differentiators that have become nearly mandatory for survival. We can see these changes reflected in product lines, such as usage-based insurance rollouts for Uber drivers and other ride-share services like it.

In this scenario, where companies usually lump Uber drivers into a pool with other private insurance holders, this model offers coverage tailored to ride-share and uses technology to analyze driver-specific, usage-based data to calculate premiums, as well as dish out perks and rewards for good driving. The technology used is called vehicle telematics, which uses GPS and cell signals to monitor miles traveled, speed, braking, accelerating, phone usage during motion, and other metrics.

Technology like this, and reimagined concepts around insurance, such as the usage-based model, are here to stay, and we can expect to see more where that came from. We no longer live in a linear world where a few cookie-cutter products administered in “traditional” ways are going to cut it. With the quick rate of change in society, paired with other factors, this means that insurance, like all spaces, must meet the customer where they are to stay competitive.

Deals To Watch

Today we’ll be having a look at Corebridge Financial and Skyward Specialty Insurance Group.

Corebridge (CRBG) is the Houston-based life and retirement division of American International Group (AIG) and is one of the largest providers of retirement and insurance solutions in the U.S., with over $350 billion in assets under management. In September, Corebridge went public with a $1.68 billion IPO, selling 80 million shares at $21 per share and bringing the firm’s value to $13.6 billion.

It’s gone okay, believe it or not. The stock hasn’t rallied hard, but it’s been a rough year for IPOs . . . any progress is meaningful. Proceeds were allocated to AIG, as no new capital was slatted to be raised at the time. AIG first announced the separation of its life and retirement united two years ago, reflecting a wider trend of companies to dig down into single products for sharper focus. Lead underwriters included JPMorgan, Morgan Stanley, Bank of America, Citigroup, and others. American International Group, Inc. (AIG) is a leading global insurance provider serving customers in 70 countries and jurisdictions.

Skyward Specialty Insurance is based in Houston, Texas and provides both admitted and non-admitted commercial P&C insurance services. Primary offerings include general, excess, and professional liability, commercial auto, group accident and health, property, surety, and workers comp. The company is headed up by a man who knows what he’s doing, Andrew Robinson, who has already helped lead two insurance technology companies, as Co-CEO of Groundspeed Analytics and as Chairman of Clara Analytics.

The company has filed for a $100 million IPO. Management has expressed intent to use the funds to grow the business and for general corporate purposes. Listed bookrunners include Barclays, Keefe, Bruyette & Woods, and others. Skyward notes the large market opportunity for providing specialty insurance services within the U.S., which is only expected to grow as asset values grow. No date or anticipated share prices have been announced at this time.

So, what’s the overall message for the insurance space? Tighten your belt and roll up your sleeves, it’s time to trim the excess and focus on realizing value and meeting customers where they are. Insurers in all branches of the space will need to get creative, and comfortable with discomfort, in order to push forward. Thanks for joining us and be sure to come back next week. We’re always on top of the latest in the IPO space and can’t wait to bring you more.