Claims automation provides a path towards digitisation for insurers - Bobsguide

The recent shake-out in NASDAQ-listed tech stocks spared few – not least insuretech disrupters such as Lemonade, Root and Hippo, who saw their market valuations slump an eye watering 85-90% from their peaks at one point. It wasn't difficult to see why, given aggressive and ongoing interest rate moves by the Fed and loss ratios (measuring claims incurred as a proportion of premiums sold) heading in the wrong direction. This in turn led to a substantial negative impact on earnings. Indeed, data from Capital IQ showed Root, Lemonade and Hippo collectively wracked up $1.1bn in net losses in 2021 vs. $474m two years earlier. Yet, if the travails of Lemonade, Root and Hippo offer a salutary lesson in frothy market valuations, they've also left the door open for traditional insurance providers to recapture (using third party software providers) lost market share.