No, this isn’t about the California wildfires. It’s about the Root IPO. Confused? Don’t worry, keep reading. I explain it all. So I was going to write a detailed page by page guide to the Root S-1 like I did for Lemonade, but two things got in the way. First, Continue Reading
The Insuretech Tortoise vs. The Insuretech Hare
I know what you’re all thinking. Here comes another version of all the reasons the overhyped insuretech names aren’t going to make it. Not so fast (said the tortoise)! Today, I will make the case for how the seemingly misguided strategy of the hare may be the better path to Continue Reading
Making Lemons Out of Lemonade
So the Lemonade IPO has doubled and I’m not surprised. In fact, I called it. Wait, you say, when did I write that? In a half written post that didn’t get out in time because I didn’t find out until too late that the deal was coming yesterday instead of Continue Reading
The Future of Personal Lines Distribution
I’ve written before about the perils of innovation in insurance. There is a flip side to that as well, which is if one of your competitors innovates, don’t dismiss their breakthrough and let them build up a big lead. You need to match their innovation immediately. Two recent market developments Continue Reading
On ESG, Corporate Purpose, and CEO Self Interest
I’m going to warn everyone upfront this entry may be considered controversial. Some of you won’t like it. I doubt I will get invited to sit on any boards after this (though I would suggest my arguments below are precisely why I should). It is going to border on political, Continue Reading
GE “Whistleblower”: Who Is the Real Fraud?
OK, disclaimer first. I have no interest in GE, either financially, reputationally, or in any other way. I have no axes to grind or allies to appease. I am writing solely because I think GE is being treated incredibly unfairly by the so-called “whistleblower”. I understand Harry Markopolos was right Continue Reading
The Safest Trade In America
Last week, I wrote about one of the worst possible risk-reward decisions. This week, I will make my case for one of the best. Now, before we start, some disclosures. I may own some of the stocks I talk about. You shouldn’t take what follows as a recommendation to buy Continue Reading
The Path of Pricing: Bullish For All the Wrong Reasons
This is an update to my earlier discussion of P&C pricing to reflect the new data points we received during earnings this week. The good news is pricing will continue to get better. The bad news is it will get better because losses continue to get worse. The net impact Continue Reading
Why Successful Insurance Innovation Fails To Create Value
Short story: All the value goes to the consumer I previously wrote about my skepticism surrounding insuretech’s ability to succeed. Today, I will focus on why innovation won’t succeed for incumbents either. Let’s agree on some definitions first. A successful innovation is one that improves the competitive position and financial Continue Reading
A Better Way To Think About Excess Capital
Summary:Acquisitions should be measured not just vs. WACC but vs. the opportunity cost of finding a better deal laterWACC is a flawed concept as it doesn’t address the cost of financial distress which increases with more leverage We live in a world of low interest rates and thus low borrowing Continue Reading