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November 19, 2021

Industry Trends

Liberty launches new digital agency as it transitions towards an independent agency focus

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What: Liberty is launching a new digital agency called Comparion and pulling 2,200 exclusive agents to the new company. Focused on auto, home, and small commercial insurance, Comparion will offer Liberty coverages alongside coverages from more than 50 other carriers. 

Quote: “Personal insurance buyers and small business owners want expert advice and broad choice in insurance coverage and price, and Liberty Mutual is better positioned to provide these by transitioning our exclusive agent operation to an agency model,” said president, Exclusive Agency Distribution, Global Retail Markets US, Chris Capone.

Why it matters: Many national carriers are transitioning away from the captive agent model and creating their own independent agencies, with Liberty as the latest example. As previously discussed, there are two competing trajectories in insurance: disintermediation and connection. Big carriers shifting focus to the independent agent model is a sign that connection might be winning out over disintermediation. This is a great sign for independent agencies.  

Read: Liberty Mutual Is Moving Its 2,200 Exclusive Agents to Its New Digital Agency

Insurtech Watch

Metromile acquisition enhances Lemonade’s telematics and car insurance capabilities

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What: The insurtech Lemonade, with roots as a renters insurance company, has expanded into homeowners, pet, life, and now auto. With Metromile, Lemonade is looking to take advantage of the proprietary data and learning algorithms that Metromile has developed. 

Why it matters: Lemonade started growing quickly by offering simple renters insurance, and has since focused on expanding its coverages to suit the expanding needs of their customers. Its early focus on simplifying the claims process paid significant dividends in generating good press and word-of-mouth referrals. Now Lemonade is quickly becoming the one-stop-shop for consumer insurance. The acquisition of Metromile gives Lemonade access to the data and algorithms Metromile has built over its 10 year existence. Metromile’s loss ratio is currently in the 65-70% range, which is higher than we expected given the acquisition numbers.  

Read: Lemonade’s Acquisition Of Metromile: The Race For Digital Insurance Supremacy Just Took A New Turn

Insurance Opportunity

Lloyd’s CEO believes climate change is insurance’s biggest opportunity

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What: Lloyd’s CEO, John Neal, claimed during his talk at COP26 that climate change is a huge opportunity for insurance. With the advantage of quality weather data and the 12 month renewal cycle, insurers have a “chance to show businesses, communities and even governments how we can help.”  

Why it matters: One of the key ways insurance is innovating to meet climate challenge is through parametric insurance, a coverage that offers pre-specified payouts based on trigger events (wind speed, rainfall, foot traffic, etc.). Parametric insurance is specifically useful when addressing climate-related perils because it has the ability to programmatically handle claims, making them simple and fast to process. Parametric insurance is already in effect today and is primarily used in developing countries. 

Read: Climate biggest single opportunity for insurance: Lloyd’s CEO

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