SECTOR PERFORMANCE UPDATE
Insurtech leads all sectors in Q2-2024; Market shows strong appetite for insurance IPOs
The S&P 500 rose 3.9% in the second quarter of 2024, building upon its 10.2% gain in 1Q24. Of the four sub-sectors tracked by Mercer Capital, only Insurtech outperformed the market index in the second quarter.
The market capitalization weighted index of P&C underwriters declined 2.4% in 2Q24 but remains up 31.2% over the last twelve months. Among the larger firms in the index, Progressive and Chubb saw flat performance while Allstate and Travelers were down 7.2% and 11.2%, respectively.
The public broker index was down 2.4% in the second quarter following a 12.3% rise in 1Q24. Baldwin Insurance Group, the smallest of the group with a market capitalization of ~$2.4 billion, was up 22.6% for the quarter and is up 47.7% on the year.
The Insurtech index continued its rally with a gain of 7.1% in 2Q24 and a return of 54.5% over the last twelve months. The direct-to-consumer distribution platform SelectQuote was the top performer in the second quarter with a return of 38.0%.
The Life & Health index, which includes both traditional life insurers and managed care companies, rose 1.7% in the second quarter and is up 10.4% over the last twelve months.
The IPOs of specialty underwriter Bowhead Specialty (NYSE:BOW) and insurance brokerage The Woodlands Financial Group (NASDAQ:TWFG) were favorably received in the markets. BOW’s offering priced at $17/share (above $14-$16 range), opened at $23/sh, and ended the quarter at ~$25/sh. Following the quarter-end, TWFG also priced at $17 (above $14-16 range) and is trading at ~$23/sh (through July 29).