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April 29, 2021

Strategy Watch

Go-to-market strategy: Insurtech brands in front of established carriers

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What is happening: Alongside the acquisitions of insurtechs, carriers are also diversifying their offerings by creating new insurtech brands to sell their products. This isn’t a new strategy, but it seems to be growing and doing well as carriers like Hartford are expanding the offerings of their insurtech brands. 

Why it’s important: One of the trends that is likely to drive insurance growth is the increase in niche products; rebranding is one way that established insurers can get in on that growth. These niche brands are going to continue flourishing as customers look for tailored products. 

Read: Putty by The Hartford to offer two new products

New Research

Mergers and acquisitions: Smaller deals that add new products or capabilities outperform the industry average for insurers.

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What they’re saying: “We found that the primary goal for six out of every ten (mergers or acquisitions) has been to increase scale. … but in fact, insurers in both the life and the P&C sectors generated superior excess TSR by focusing on smaller acquisitions and on goals other than building scale.“

Implications: This highlights the importance of product differentiation, and the value these customers are seeing from product innovation. Expect the carriers that are able to deliver innovative new products quickly and consistently to win the most. 

Read: A better approach to M&A in North American insurance

Fun Data

The downside of insuring cars in Nevada

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What: Clearsurance’s recent study of the 10 worst states for auto-related fraud shows over 346 fraudulent claims per 1M drivers in Nevada. Florida deserves an honorable mention with over 7.2k fraud cases, more than double that of the runner-up, Ohio. 

Our thoughts: It will be interesting to figure out what these states have in common outside of not being known for good skiing.  

Read: 10 Worst States for Auto-Related Fraud [2021 Study]

Cool stuff

Farmer in the UK is growing furniture

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What: Each chair takes about 6 years to grow and is sold on a commissioned basis, if you want one, you can order it today and get it in about 10 years. 

Thought: As a complete antithesis of on-demand insurance, perhaps grown chair coverage is something Root Insurance could expand into? 

Read: Full Grown

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