What's Gaya's view on recent downturns in insurtech; company-specific or larger industry trend?

I definitely saw how they plummeted, in terms of stock. What I can bet on, is that they have very smart people in their rooms. They’ve hired lead scientists from all the competitors that you can think of. We can speak about who, they hired the best of the best from Geico, Progressive, from everywhere. Same thing for Lemonade. I would say that when you're IPOing and you're going into that public route, you have an incentive to grow and to show exponential growth, and you might not be thinking about what kind of book of business you have. Then, things will catch up and then you realize you have kind of traded off sustainability to growth.

Now, does it mean that they can never be sustainable? I think they can. I think they surely can, especially because they have leading actuaries working for them, people who have priced and built products for the other companies that are more traditional. I think they have a competitive advantage at having great marketing engines, knowing how to target and how to be very efficient with their marketing dollars, which other incumbents do not have. Now the question is, can we see over the next two years, them building a very sustainable vertical business? My feeling is that they can. 

But in terms of the other reason why all of this plummeted, most of these insurtech MGAs, when they started, they went to shop for capacity from reinsurers. Back then, from 2015-2020, interest rates were very low. All these reinsurers were perceiving them as interesting experiments and were open about testing things out. The attitude was "let's try to expand and find some yield here and there". But now, as rates are up again, the market conditions are changing such that reinsurers, and in general, the markets are judging insurtechs based on underwriting and profitability versus just acquisition strategy and go-to-market strategy.

If they continue existing or consolidated in whatever shape or form, I feel they will surely improve their vertical services, claims, or whatever kind of book of business they go after. They will be closely profitable to the incumbents or a bit more, because of how light their organizations might be in comparison to the incumbents. I wouldn't dismiss them and say that it's the end of the story. I think they are just getting started.