Insurance, technology stocks beyond insurtechs in 2021: HSCM index
The price of 18 US insurtech stocks that have gone public over the past decade has risen as a group in 2020. So far, however, large non-insurance tech companies and traditional insurance stocks have both outperformed insurtech by 2021.
Hudson Structured Capital Management released its relative results during the week of April 18, when it simultaneously launched a new stock market index created and managed by HSCM - the HSCM Public Insurtech Index or HPIX - to measure the performance of the industry. insurance in the public market.
“We believe this is the first and only index available to the public,” wrote Adrian Jones, director of HSCM and partner of the HSCM Insurtech group, in the LinkedIn post.
According to an announcement posted on the HSCM website, HPIX plans to track price movements of the listed common stock portfolio over the past 10 years by insurance companies in the United States claiming to be a `` new differentiated business model ''. thanks to technology. "
The description of the company "is taken at face value in the construction of the index," HSCM said.
The index is calculated by Solactive AG, the index calculation agent. It is available online, on Bloomberg as an HPIX INDEX ticker, and on Reuters Instrument Code .HPIX.
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Currently, the index tracks sock prices for 18 companies, including property / accident operators Kinsale Capital Group, Lemonade, Metromile, Palomar Holding and Root, distributors such as EverQuote and Goosehead Insurance, as well as software companies. Duck Creek and Guidewire.
Companies must not only have a new business model differentiated by technology, but also a number of other criteria. For example, the company must be an operating company, not a Special Purpose Acquisition Company (SPAC), and have a total market capitalization of more than $ 500 million. Companies that are mostly reinsurers are not included in the index.
To be included, a business must derive at least a portion of its annual group revenue from insurance activities, including data services, software, IT systems, marketing, lead generation, price comparison, direct or digital distribution, agency management, agency / brokerage, insurance, insurance companies, risk management, claims management, loss prevention and associated products or services.
In terms of performance, the HPIX is up 75% in 2020. But after rising steadily from 175 to 203 on February 12, 2021, the index has since fallen into a range of 150 to 160 in March and April.
While the HPIX has fallen 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, has increased by 9% over the same period. . However, the announcement noted 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 HPIX's decline this year, traditional insurance stocks have risen this year, HSCM noted.
HSCM stressed that the HPIX companies "should not be considered the final list, nor the supporting companies included," and noted that new companies could 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.