The Securities and Exchange Commission is preparing to sue Robinhood Markets’ crypto unit, ramping up its crackdown on digital-currency trading to target one of the most popular U.S. brokerage firms, the company said Monday.

Robinhood disclosed that its crypto unit received a so-called “Wells Notice” from SEC staff over the weekend, which said the staff had made a “preliminary determination” to recommend an enforcement action against the unit, called Robinhood Crypto, over alleged violations of securities laws.

Insurance giant Prudential is shutting down Assurance IQ, five years after spending $2.35 billion to acquire the under-the-radar tech startup based in the Seattle region. “As we look to the future, we believe that directly investing in our core businesses and capabilities will help us become a higher growth, more capital efficient company,” Caroline Feeney, head of Prudential’s U.S. businesses, wrote in an email to employees obtained by GeekWire. “After a careful review of our businesses and strategic initiatives, we have made the difficult decision to wind down our Assurance business.” Prudential noted in its first quarter earnings report on Tuesday that it “decided to exit” the Assurance business. The company confirmed the shutdown in a statement to GeekWire. Assurance uses technology to match consumers with insurance plans that are purchased online or through an agent. Its acquisition to Prudential was one of the largest in Seattle tech history, and the largest insurance tech exit in history, according to Financial Technology Partners. The startup, founded in 2016 by Michael Rowell and Michael Paulus, never raised any outside capital and quietly reached unicorn status as a $1 billion company. At the time of the deal, Prudential said Assurance’s “rapid-growth model offers compelling economic advantages with low fixed costs and low capital requirements that produce high margins and high degree of scalability.” “Assurance accelerates the strategy and growth potential of Prudential’s financial wellness businesses, bringing us closer to more people across the entire socio-economic spectrum to better serve the full picture of their needs,” Prudential CEO Charles Lowrey said in 2019. But just a few years later there were signs of trouble. A story by The Wall Street Journal in 2022, “How Prudential’s Big Tech Bet Went Sour,” cited missed financial targets and government inquiries over regulatory matters. Many insurance technology companies struggled amid the broader tech downturn that started in 2022. Prudential stopped reporting Assurance financial data in January 2023, in part because “its financial results and operations are not considered significant,” the company said at the time. Assurance reported adjusted operating income of $29 million in the fourth quarter of 2022, compared to a net operating loss of $10 million a year prior. Prudential took goodwill impairment charges, used when a company’s value decreases following an acquisition, of $177 million, $903 million and $1.06 billion in the fourth quarters of 2023, 2022 and 2021, respectively. Assurance had around 1,700 employees as of December 2022 and now has 1,000 employees, in addition to contract workers who help customers find insurance plans. Update: A filing with the Washington state Employment Security Department shows 112 workers in Seattle being laid off, starting July 3. In an email to employees on Tuesday, Assurance CEO Allison Arzeno wrote that “I realize this news comes as a shock and creates uncertainty.” She said a majority of the company’s employees will be laid off. “Together, we built something special here,” wrote Arzeno, who took over as CEO in 2020. “Our work made a difference. We helped hundreds of thousands of people navigate complex insurance tradeoffs and secure coverage that improved and protected their personal and financial well-being.” Prudential reported first quarter net income of $1.1 billion, down from $1.46 billion in the year-ago period. Asked about M&A deals on the company’s earnings call with analysts Wednesday, Lowrey said Prudential “anticipated a different outcome when we purchased Assurance.” “As we look forward we will focus on acquisitions of more established businesses that present opportunities to expand our capabilities and scale in our existing market-leading businesses,” he said. The company’s stock is up nearly 30% in the past 12 months. It has a market capitalization above $39 billion. Read the full memo from Feeney below. “As we look to the future, we believe that directly investing in our core businesses and capabilities will help us become a higher growth, more capital efficient company. After a careful review of our businesses and strategic initiatives, we have made the difficult decision to wind down our Assurance business. Assurance was acquired by Prudential in 2019 to expand the company’s direct-to-consumer access to the U.S. mass market. Since then, the team has made meaningful progress in realizing Assurance’s vision to help people improve and protect their personal and financial well-being, while navigating a challenging business environment for the broader insurtech industry. However, as we sharpen our focus as an enterprise on growth, it is critical that we prioritize core businesses and capabilities where we have a competitive advantage. Business decisions like this are never easy, and we are working with the Assurance leadership team to support our employees, customers, and partners throughout this process. I want to thank all of our employees and other partners at Assurance for their dedication over the past five years. And more broadly to our teams across the U.S., thank you for always keeping our customers, clients, and each other top of mind.”

At least one company asked state regulators for permission to raise rates by 93.4%, according to data obtained from the New Jersey Department of Banking and Insurance (DOBI).

Insurance companies are asking for the increases because of a combination of inflation, increasing home replacement value, higher building costs and “increased frequency of catastrophic events” such as severe weather events. It’s a national problem, said Dawn Thomas, the agency’s spokeswoman.

She said the agency has received “significantly” more rate increase requests in recent years.

Under state law, property and casualty insurers are permitted to file requests with the department to amend their rates or rating systems, Thomas said.

“The Department takes seriously its responsibility to regulate the insurance industry in a manner that promotes consumer protection and the stability of the industry,” she said. “All rate changes must be reasonable, adequate and not unfairly discriminatory.”

If the request is “unreasonable, inadequate or unfairly discriminatory,” it will not be approved, she said, noting that it blocked $68 million in homeowner premium increases since 2023.

But for the more than 120 hikes that were approved since 2023, homeowners’ pocketbooks are hurting.

The highest hike request came from Clear Blue Insurance, which is licensed to offer policies in all states except Alaska. After requesting a hike of 93.9%, it was granted a 20% increase. The company did not respond to requests for comment.

The second highest request was for a 34% increase from Palisades Property & Casualty, which is part of Plymouth Rock Assurance. It received a 14% jump. Next was Kingstone Insurance, which asked for a 28.4% hike and received permission to raise rates by 18.7%.

The pain probably isn’t over yet. More homeowner insurance companies have filed requests to hike their rates, including a dozen that asked for double-digit hikes.

The highest pending request is for Allstate New Jersey Property & Casualty, which asked for a 36.9% increase. MIC General requested a 36% hike and Palisades Property & Casualty is seeking a 30.3% increase.

If Allstate Corp.’s customers “quit getting sued every time they have an accident” the company could ease back on some rate increases, according to Chairman, Chief Executive Officer and President Tom Wilson. Medical treatments, medical consumption, inflation and higher legal costs on increased attorney involvement are all pushing claims severity higher and ultimately increasing rates, Property-Liability President Mario Rizzo added during the multiline insurer's first-quarter earnings conference call. Personal automobile physical damage claims are also still rising on higher parts and labor costs, but the rate of increase is moderating on factors such as lower used car prices, said Rizzo. Auto claims frequency was down in the quarter, helped by favorable weather, but it was more than offset by higher claims severity, he said. Allstate fully reopened to personal auto business in California in February, feeling comfortable with business there after a rate hike was approved. Regulators in New York and New Jersey also approved rate hikes, but it’s not enough to lift underwriting restrictions, said Rizzo. In New York, he said Allstate is in discussions with regulators. In New Jersey, a second rate hike, for 13.95%, was approved to take effect in the second half of the year but still more is needed, said Rizzo. Wilson said the company will continue to raise rates in additional geographies due to higher severity. Allstate has worked the past several years to reduce expenses and will keep doing so to remain competitive, he said. “It’s difficult to determine where one’s competitive position is, given how rapidly rates are moving,” across the industry, he said. State Farm increased its market share in recent years but has run “very large underwriting losses,” said Wilson. “That won’t be us.” Allstate seeks growth by significantly increasing advertising, unwinding underwriting restrictions in states accounting for about 75% of its auto brand premium and expanding new products across channels, according to Rizzo. While Allstate brand auto policies in force declined 5.2% from the prior-year quarter, National General auto policies in force rose 12.6% as its nonstandard business grew and the company continued to roll out a new middle-market standard and preferred product called Custom360. The company can adjust pricing more quickly in its nonstandard auto business, Rizzo pointed out, because of high turnover in the line. A new connected auto product is available direct in nine states and is being expanded to the agent channel this year, with more states and an expansion to homeowners planned in coming years, Rizzo said. Allstate brand auto net written premiums rose 8.4% from the prior-year quarter on a 13.4% increase in average gross written premium on rate increases, partially offset by the decrease in policies in force. Allstate brand new auto business was up 7% from a year earlier, Rizzo said, on a combination of advertising, direct sales and more productivity by Allstate agents.

Allstate Corp. applicable net income soared in the first quarter to $1.19 billion, rebounding from a $346 million net loss a year earlier.

Allstate brand homeowners implemented average 11.7% rate increases in 15 locations in the quarter. National General implemented homeowners rate increases averaged 14% across 12 locations. The carrier sees additional growth opportunities in the independent agent channel in homeowners, said Rizzo.

Allstate is pursuing the sale of its health and benefits businesses rather than invest in more complementary distribution, a broader set of products and capabilities such as management of a health network, Wilson said earlier. The businesses generate about $240 million of adjusted net income annually.

The potential sale is progressing as expected, with “robust interest from a large group of quality potential buyers, both strategic and financial,” Chief Financial Officer Jess Merten said during the first-quarter earnings call. “Diligence on a large, complex business takes some time, so does selecting the right potential buyers to stay involved in the process,” he said. “We believe this is a great business” but someone else can do more with it, said Wilson, adding Allstate anticipates selling the health and benefits business in 2024. While the divestiture will free up additional capital, Wilson continued to stress that Allstate is already “very well capitalized.”    

As claims poured in from Hurricane Ida, executives of Lighthouse Insurance Co. scrambled to land an infusion of cash from investors, both to assuage concerns from regulators and in hopes of keeping the firm afloat. Now, the people who poured more than $60 million into the company just before it went belly-up are suing the firm and its executives, alleging a complex web of fraud involving a family trust, affiliated companies and a Florida bank. The allegations, made in a lawsuit filed by New York-based hedge-fund managers who claim Lighthouse bilked them, shed new light on the questionable business practices of one of the 12 insurers in Louisiana that failed after Ida. The Times-Picayune | The Advocate detailed Lighthouse’s poor financial condition in a series of stories that found most of the companies that failed had also sent hundreds of millions of dollars to less-regulated affiliates, even as the main companies grew quickly and took on extreme levels of risk that put them in a precarious position. The failures have forced tens of thousands of Louisianans to try to get their claims paid by the state-backed guaranty association, which is funded by taxpayers. Many of their policyholders landed on the rolls of Louisiana Citizens, the state insurer of last resort, forcing them to pay higher premiums. Fortinbras, the New York investment adviser for HT Investments, and Silver Rock, a Cayman Islands partnership, filed the lawsuit in Florida court last week, naming as defendants former Lighthouse CEO Patrick White; his father, Lawrence White; and their family trust. The suit centers on the several months leading up to Lighthouse’s collapse in 2022. In the summer of 2021, the lawsuit said, a contractor reported that a check from Lighthouse bounced, and the Louisiana Department of Insurance put the company into a confidential state-supervised supervision proceeding. To satisfy regulators, Lighthouse, working closely with a reinsurance broker called TigerRisk, approached the investors about injecting capital into the firm to put it on a more solid footing. But the investors allege that Lighthouse, and TigerRisk, which is not named as a defendant, misled them by not disclosing the scrutiny by regulators, and by misrepresenting the amount of claims it expected to pay out to victims of Hurricane Ida, which hit in August. The deal with the investors closed in December, at which point the firm was already at “imminent risk of liquidation due to financial distress,” the lawsuit says. The state put the firm in receivership in April and eventually liquidated it. “Patrick White and his agents painted a false picture that prevented plaintiffs from adequately assessing their risk,” the suit said. “In truth, Patrick White and his agents knew or had reason to believe that the losses suffered by the (companies) from Hurricane Ida claims had already exceeded, and would far exceed, the $265 million projected losses” that the plaintiffs were warned of. The investors have already sued One Florida Bank, which has ties to the White family and Lighthouse, alleging the executives used the capital infusion to repay debts to the bank even as the insurer was going under. Former Lighthouse CEO Patrick White declined to comment. In an earlier statement to the Insurance Journal about the dispute with One Florida Bank, he said “many carriers, the state itself, and the industry as a whole, had the early estimates wrong.” “Fortinbras was aware that the hurricane had occurred and even hired experts of their own to review the numbers throughout the due diligence process,” White said. “The outcome is unfortunate for all.” Lighthouse was one of many smaller, regional insurers that wrote policies in south Louisiana and other hurricane-prone places and that grew rapidly in the years after Hurricane Katrina. Jim Donelon, Louisiana’s former insurance commissioner, wooed such small firms with state grants and encouraged policyholders to do business with them. Donelon himself took out a policy with one of the new arrivals. The raft of failures in 2022 and 2023 raised questions about whether Louisiana had allowed the companies to grow too quickly without proper oversight. The Times-Picayune analysis found 11 of the companies used a model where it farmed out all the work, and a significant share of the premium dollars, to less-regulated affiliates, making it difficult to know if the companies were spending wisely. The state Department of Insurance has since beefed up its review of companies’ reinsurance and concentration of policies in risky areas. And a bill that would bolster reporting requirements for less-regulated affiliates is making its way through the Legislature. The LDI is suing one of the failed companies, Americas Insurance Company, alleging it misled regulators about its debt load. Another, Southern Fidelity, is under fire from Florida regulators for using company cash to buy a sprawling hunting lodge that its executive used as a personal residence. The investors suing Lighthouse allege the company’s executives misled them to raise capital to avoid a collapse that could endanger the White family’s assets. And they say Lighthouse told them the company’s losses from Ida were significantly lower than they actually were. And the suit claims Lawrence White, a former owner of the parent company, deleted key documents, and that the White family used investors’ money to make improper transfers to an affiliated reinsurer.

The Lone Star Summit, a groundbreaking event uniting the four Texas Master Agencies of SIAA - The Agent Alliance, concluded its first gathering on May 1, 2024, at the picturesque Hyatt Regency Hill Country Resort and Spa. Representing a milestone in the insurance industry, this unprecedented collaboration brought together independent insurance agents from across Texas, representing more than $1.1 Billion in total written premium, for three days of intensive workshops, strategic discussions, and networking opportunities. From April 29 to May 1, nearly 400 attendees immersed themselves in tailored sessions aimed at expanding their businesses, enhancing market value, and navigating the evolving insurance landscape. The summit provided actionable insights for agency growth, fostering an environment where like-minded professionals and industry leaders could connect, share ideas, and uncover opportunities. The event kicked off with the Lone Star Scramble Charity Golf Tournament, a spirited day on the links that raised funds for four local non-profits selected by each of SIAA's four Texas master agencies. Additionally, the event hosted a Travelers Insurance sponsored SHE Golfs clinic, created to empower women in the industry to feel comfortable and confident on the golf course, furthering the spirit of inclusion and philanthropy. Keynote speaker Joan Woodward, Executive Vice President of Public Policy at Travelers, delivered an insightful presentation on economic, policy, and political outlooks, setting the tone for the conference's engaging sessions. The summit featured a diverse lineup of speakers, panels and workshops, covering topics ranging from commercial lines strategies and agency perpetuation to digital marketing and innovation in insurance. Attendees had the opportunity to participate in roundtable discussions with strategic partners, fostering collaboration and exploring new opportunities within the industry. A highlight of the event was the recognition of Myrna Estrada, Senior Vice President and Field Executive of Liberty Mutual Insurance, with the inaugural Lone Star Community Star Award, celebrating her outstanding contributions to the industry and the Texas community. "We are thrilled with the success of the first Lone Star Summit," said Ian Exelbert, SIAA’s Central/West Regional President. "This event represents a pivotal moment for growth and innovation in the Texas insurance landscape. We are grateful to all our attendees, speakers, sponsors, and partners for their contributions in making this event a resounding success." The Lone Star Summit concluded with an awards ceremony honoring outstanding achievements and a vision for the future of Texas independent agents. Attendees departed with renewed inspiration, valuable insights, and a strengthened sense of community. About SIAA – The Agent Alliance SIAA – The Agent Alliance is the leading national insurance agency network, with approximately 5,200 members collectively writing more than $14 Billion in total written premium. For more information about SIAA, visit siaa.com. The master agencies affiliated with SIAA in the great state of Texas are: Texas Agency Alliance (TAA), Abilene, siaatx.com CoVerica Agency Alliance, (CoVerica), Dallas, covericaaa.com Insurance Agents Alliance of Texas (IAAT), Mineola, iaatx.com South Texas Agency Alliance (STAA), Katy, staa.com      

Chubb, the insurer of the collapsed Francis Scott Key Bridge in Baltimore, is preparing to make a $350 million payout to Maryland, paying the full amount of the coverage quickly rather than waiting for the rebuilding to begin. The check, which is the upper limit of the state’s coverage for the structure, would be the first large payout in what will likely be a yearslong wrangle over who bears the $1 billion-plus estimated cost of the bridge’s collapse. The collision, when a giant cargo ship plowed into and destroyed the bridge in the early hours of March 26, killed six people and effectively shut down Baltimore’s busy port.

Chubb, along with the state and the families of the victims of the crash, will likely sue the shipowner and others to recoup losses from the crash.

The insurer is expected to authorize the $350 million payment within weeks, according to Henry Daar, head of property claims North America for WTW, the bridge’s broker.

“I am confident that Chubb will pay the full limits of liability,” Daar said.

Claims under the state’s policy are bound to exceed the $350 million limit, he said.

Damage to the bridge alone could reach $1.2 billion, analysts at investment bank Barclays Capital estimated last month. The policy also provides some business-interruption coverage for the port, which is losing around $88 million a year in tolls, according to Daar.

Insurers can respond to claims that will blow through a policy’s limits either by writing a check for the full amount upfront, or by paying in dribs and drabs, as the work is done. That pay-as-you-go approach can rack up payments to loss adjusters and other professionals.

“I give Chubb kudos for recognizing that this is clearly going to be a full-limits loss,” Daar said. “They could spend millions and millions of dollars in fees for accountants and adjusters over the next few years, or they could pay the claim.”

Chubb’s exposure to the loss is significantly less than the headline $350 million total, in part because it sold some of the risk to reinsurers, according to a person familiar with the matter.

The insurer is expected to support Maryland in suing the owner and manager of the ship that hit the bridge, the 984-foot Dali, to try to recover losses.

The Singapore-flagged Dali has coverage through a specialized protection and indemnity insurer, the Britannia P&I club. It is one of a dozen P&I clubs that between them buy reinsurance covering up to $3.1 billion a ship.

A courtroom battle has kicked off that will ultimately determine how much of this multibillion-dollar pot of cash can be tapped. The outcome rests in part on whether the Dali was seaworthy.

Grace Ocean, the Dali’s Singaporean owner, and Synergy Marine, its manager, last month filed in Baltimore federal court seeking to limit their liability. The companies invoked a centuries-old law that caps exposure to the value of the ship and its freight pending, or the amount paid to carry the goods. In the case of the Dali, that would put a ceiling on payouts of around $44 million, the legal filing said.

If the court approved the move to limit liability, the estimated total insured loss would fall significantly from the current range of $2 billion to $3 billion, “probably to less than $1 billion,” according to Marcos Alvarez, global head of insurance at ratings firm Morningstar DBRS.

The legal move to limit liability will be strongly contested. Baltimore’s mayor and city council last month opposed any cap on the shipowner’s or manager’s liability, accusing them of negligence. “The Dali left port…despite its clearly unseaworthy condition,” the mayor and council said in a court filing.

A spokesman for the shipowner and the manager said it would be “inappropriate to comment” out of respect for the continuing investigations into the crash and any future legal proceedings.

The Federal Bureau of Investigation has opened a criminal probe into the crash, including whether the Dali’s crew failed to report any problems with the vessel before it left port, The Wall Street Journal previously reported. The National Transportation Safety Board is also investigating the disaster.

The question of the ship’s seaworthiness—or otherwise—could also be a significant factor in an expected future fight between the vessel’s owner and the owners of its cargo. The ship’s owner started a so-called “general average” process in April that would share certain costs with cargo owners, including salvage and retrieving containers stranded on the ship,

The decision to start the process “indicates that the owners expect the salvage operations to result in high extraordinary costs for which they expect contribution from all salvaged parties,” the container line Mediterranean Shipping said last month in an advisory statement to customers who own freight stuck on the ship.

Cargo owners are likely to contribute to the costs now, in the interests of recovering their containers, but could seek to recover the payments later, by arguing the collision was the fault of the ship’s owner, marine lawyers said.

A huge operation is under way to remove the bridge wreckage stuck on the ship and at the bottom of the Patapsco River. The first containership since the crash left the port last weekend. A fleet including 36 barges, 27 tugboats and 22 floating cranes has so far removed more than 3,000 of an estimated 50,000 tons of wreckage from the site, according to a recent official update.

   

ACORD, the standards-setting body for the global insurance industry, today released the first-of-its-kind study Carrier Mergers & Acquisitions: Major Transaction Value Analysis. The study, which examined the largest M&A transactions over the last decade by insurers in Property & Casualty, Life, and Reinsurance, sought to answer key questions about motivations behind M&A activity, long-term value creation, and barriers and enablers in achieving success. The study, presented in London today by Bill Pieroni, President and CEO of ACORD, screened nearly 15,000 transactions, focusing on publicly disclosed transactions valued at $1 billion or greater. The deals analyzed in-depth represented a total value of nearly $290 billion, accounting for more than one-third of the value of all carrier M&A transactions worldwide. Transaction size Among other factors, ACORD assessed the M&A transactions by deal size and shareholder value at risk (SVAR) to understand how these contributed to long-term outcomes. Dividing the transactions into quartiles by deal size revealed a “Goldilocks principle” at work — in the long run, mid-sized deals performed better than the largest or smallest transactions studied. The second-smallest quartile — comprised of transactions averaging about $1.4 billion — was the only cohort that outperformed the relevant index over the period studied. The larger and smaller quartiles both underperformed the market. “While the largest deals may garner headlines and high hopes, they typically are not the most likely ones to create value in the long term. A transaction that is too large may simply be too big for the acquirer to successfully digest,” said Pieroni. “One that is too small, on the other hand, may not draw sufficient attention and oversight. Insurers must carefully consider their ability to manage existing operations without disruption, while effectively integrating the benefits they hoped to achieve by the transaction.” Segmenting the M&A transactions by SVAR showed similar results, revealing a “sweet spot” for long-term value creation when moderate amounts of shareholder value were at risk. Buyer motivations ACORD analysis also supported the identification four major buyer motivations for carriers:

• Scale and Scope: Amortize fixed costs and improve resource access by increasing absolute size, and/or expanding scope across strategic and tactical dimensions.
• Core Expansion: Increase share across areas in which the insurer already executes, such as products, geographies, channels, and customer segments.
• Capability Acquisition: Optimize the risk, cost, and time associated with developing new or enhanced internal capabilities.
• Diversification: Expand portfolio by acquiring new revenue and earning sources.

“The variations in long-term performance were interesting, and sometimes surprising,” Pieroni continued. “The outcomes of these deals differed widely across lines of business, even when motivated by the same rationales.” In total, P&C carriers experienced higher-than-average returns after M&A transactions in all four motivation categories, with 70% of the P&C deals creating value throughout the analysis period. Diversification was by far the most successful motivation among P&C insurers — driving average TSR appreciation roughly twice as high as other motivations— but was less successful in other lines of business. Life insurers faced difficulties regardless of the rationale behind the deal, with just 36% of all life M&A transactions creating value. Reinsurers experienced mixed results, creating value in just half of acquisitions overall, with high performance limited mostly to deals motivated by core expansion. ACORD’s Carrier Mergers & Acquisitions study will be presented at ACORD Industry First on May 21st. To register for this virtual event, please visit www.acord.org/industryfirst.

Premium growth for AM Best’s medical professional liability (MPL) composite moderated to 3.6% in 2023, but overall financial results were buoyed by favorable net investment income, according to a new AM Best report. The premium growth was spurred by price firming following a prolonged period of soft market conditions and challenging industry dynamics that dampened demand. The new Best’s Market Segment Report on the U.S. MPL segment noted that improved underwriting results stalled last year, driven in part by rising loss adjustment and other underwriting expenses. MPL insurers continue to face many of the same headwinds that they have in recent prior years, including a potential rise in claims costs due to social inflation and erosion of tort reforms, as well as the growing complexity of medical care. MPL carriers also continue to work to mitigate ongoing challenges such as escalating burnout rates, staffing shortages, and further growth of alternative care providers, all of which could have a negative impact on claims frequency. “These headwinds, coupled with changes in tort reform, social inflation and continued rising claims severity could impede the segment’s progress,” said Sharon Marks, director, AM Best. “But these issues are also expected to help focus and maintain the MPL segment’s attention on premium adequacy, underwriting discipline, and prudent reserving.” AM Best revised its outlook on the U.S. MPL insurance segment to stable from negative in November 2023, citing improved rate adequacy, the diminishing impact of pandemic-related exposures, persistently redundant loss reserves, higher reinvestment rates, and improved overall returns.

In its Q1 2024 results, AIG has reported net income attributable to its common shareholders of $1.2 billion, marking a massive improvement compared to the $23 million recorded in the prior year quarter. the increase in net income was primarily driven by net realized gains on Fortitude Re funds withheld embedded derivative, compared to net realized losses in the prior year quarter. The firm’s adjusted after-tax income (AATI) in the opening quarter was $1.2 billion, flat compared to Q1 of 2023, reflecting higher underwriting income million and net investment income in General Insurance and improved results in AIG’s Other Operations. However, this was mostly offset by a 20% decrease in Corebridge’s earnings included in AATI due to the reduction in AIG ownership over the last year. Meanwhile, AIG’s total net investment income for Q1 2024 was $3.9 billion, an increase of 11% from $3.5 billion in the prior year quarter. The firm explained that this was primarily driven by higher income from fixed maturity securities and loans due to higher reinvestment rates, partially offset by lower alternative investment returns and lower income on Fortitude Re funds withheld assets. Looking at the General Insurance segment more closely, Q1 2024 net premiums written were $4.5 billion, marking a decline of 35% from the prior year quarter on a reported basis, but an increase on a comparable basis, with 1% growth in Commercial Lines and Personal Insurance relatively flat. At the same time, Q1 2024 underwriting income increased $94 million from Q1 of 2023 to $596 million and included $106 million of total catastrophe-related charges, representing 1.9 loss ratio points, compared to $264 million, representing 4.2 loss ratio points, in the prior year quarter. Thus, the combined ratio for the opening quarter improved by 2.1 points from 2023 to 89.8%, largely driven by a 1.9 point decrease in the loss ratio to 58.0%. AIG Chairman & Chief Executive Officer Peter Zaffino, commented, “AIG began 2024 with very strong momentum in delivering on our strategic and operational progress while achieving exceptional financial results, reflecting the foundational capabilities we have cultivated over the last several years. “In addition to outstanding profitability, this quarter was highlighted by the significant capital management actions we completed, placing AIG in a position of strength ahead of Corebridge Financial’s deconsolidation from AIG.” Zaffino continued, “General Insurance had another quarter of impressive Commercial Lines profitability benefiting from continued strong underwriting performance and low levels of catastrophe losses as we continue to manage volatility in our results. “Throughout 2024, we expect to continue to build on our momentum as we execute AIG Next, deconsolidate Corebridge and deliver underwriting excellence and profitable growth, further enhancing value to AIG shareholders and positioning AIG for the future.”

Neptune Flood, the nation's largest private flood insurance company, today announced its acquisition of Charles River Data, a renowned Boston-based data science consulting group. This strategic move aims to bolster Neptune Flood's already cutting-edge Triton underwriting system through advanced data science, machine learning, and artificial intelligence capabilities. Charles River Data contributes a prestigious background rooted in big tech and academia, enhancing Neptune's ability to analyze and underwrite flood risk with even greater precision and speed. "The integration of Charles River Data's expertise will enable us to expand our analytical capabilities, ensuring faster and more accurate flood risk assessments for our customers," said Trevor Burgess, CEO of Neptune Flood. "This acquisition aligns perfectly with our commitment to leveraging the best technology to revolutionize insurance." Matt Duffy, Chief Risk Officer at Neptune Flood, emphasized the synergy between the two companies. "Joining forces with Charles River Data empowers us to enhance our Triton system with new layers of predictive analytics, machine learning, and generative AI, further solidifying our position at the forefront of the insurance technology industry," said Duffy. Mike Dezube, CEO of Charles River Data, expressed enthusiasm about the opportunities this acquisition presents. "We are thrilled to join Neptune and contribute to a platform that is transforming an industry through data and AI. Our expertise in data science aligns seamlessly with Neptune's vision of accuracy and efficiency in underwriting flood risk, and together, we will bring the industry forward setting new standards as we go". Mike spent eight years as a data scientist at Google before co-founding Charles River Data with Gleb Drobkov, most recently a consultant at BCG X. Mike will join as Neptune's Chief Data Science Officer and Gleb as Neptune's Chief Strategy Officer. This acquisition marks a significant milestone in Neptune Flood's growth strategy, following a series of technological innovations aimed at improving customer experience and operational efficiency. The company's commitment to investing in cutting-edge technology has positioned it as a leader in the flood insurance sector, capable of responding to the evolving needs of its customers. About Neptune Flood: Neptune Flood is a technology-driven insurance company specializing in providing affordable, comprehensive flood coverage. Using an advanced AI-driven platform, Triton, Neptune leverages data analytics and machine learning to process over 30,000 quotes per day and offer efficient underwriting solutions and superior customer service, making flood insurance accessible for all. About Charles River Data: Based in Boston, Charles River Data is a leading data science consulting group with deep expertise in big tech and academia. The company specializes in developing sophisticated analytical tools and models that enable businesses to harness the power of data for strategic decision-making.    

Insurtech Lemonade Inc. narrowed its first-quarter net loss to $47.3 million from $65.8 million a year earlier as artificial intelligence enabled its “relentless pursuit of automation at every stage,” the company said in a shareholder letter. The number of employees declined 11% year-on-year as in-force premium increased 22% to $794.2 million, which “speak volumes for the widespread impact of technology throughout the company,” Lemonade said. Net earned premium increased to $84.4 million from $68.2 million a year earlier.

Net loss and loss adjustment expenses rose to $65.9 million from $63.6 million.

The company reported 2.1 million customers, up 13% from the prior-year quarter. Last year Lemonade Co-Founder and Co-Chief Executive Officer Daniel Schreiber said a new partnership with venture firm General Catalyst would cover up to 80% of customer acquisition costs under a time-shifting “synthetic agents” program intended to increase growth without depleting cash, much as quota share reinsurance does. Lemonade offers renters, homeowners, pet, car and life insurance. It operates in the United States, United Kingdom, Germany, the Netherlands and France.