The stock prices of 18 US insurtechs that have gone public over the past decade have skyrocketed as a group in 2020. But so far in 2021, large tech companies excluding insurance and stocks traditional insurance have both outperformed insurtechs.
Hudson Structured Capital Management reported the relative results the week of April 18 by simultaneously unveiling a new stock index created and administered by HSCM – the HSCM Public Insurtech Index, or HPIX – to measure the performance of the insurtech sector in public markets.
“We believe this is the first and only publicly available index of its kind,” wrote Adrian Jones, Managing Director of HSCM and Partner of HSCM’s Insurtech Group, in a LinkedIn post.
According to an announcement posted on the HSCM website, the HPIX intends to track the price movements of a portfolio of common equity securities listed over the past 10 years by companies in the insurance industry in the States. United who describe themselves as having “new business models differentiated by technology.” “
Company descriptions “are taken literally in the construction of the index,” HSCM said.
The index is calculated by Solactive AG, an index calculator. It is available online, on Bloomberg under the ticker name HPIX INDEX and on the Reuters instrument code .HPIX.
Currently, the index tracks sock prices from 18 companies, including property / damage carriers Kinsale Capital Group, Lemonade, Metromile, Palomar Holding and Root, distributors that include EverQuote and Goosehead Insurance, as well as software vendors. Duck Creek and Guidewire.
Besides having new business models set apart by technology, companies must meet other criteria. For example, the company must be an operating company, not a Special Purpose Acquisition Company (SPAC), and have a total market capitalization greater than $ 500 million. Companies that are primarily reinsurers are not included in the index.
To be included, a business must derive at least its annual group-wide revenue from insurance activities, including data services, software, IT systems, marketing, lead generation , price comparison, direct or digital distribution, agency management, agent / broker, underwriting, insurer, risk management, claims management, loss prevention and related products or services.
In terms of performance, the HPIX climbed 75% in 2020. But after continuing to drop from 175 to 203 on February 12, 2021, the index has since fallen into the 150-160 range in March and April. .
While the HPIX was down about 8% since the start of the year on April 27, the Solactive United States Technology 100 (“Tech 100”), an index of the 100 largest technology companies traded on the Nasdaq, increased 9% over the same period. The announcement notes, however, that the stock prices of small and young companies may be more volatile than the stock prices of large companies in the same industry.
Unlike this year’s HPIX drop, traditional insurance stocks have risen this year, HSCM noted.
The HSCM stressed that HPIX companies “should not be taken as a final list, nor as an endorsement of which companies are included,” noting that new companies can be added or removed at the start of each quarter.
The HPIX is weighted by total market capitalization, and each company’s weight is capped at 15%, HSCM said.
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