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Why Floods Are The $63B Blind Spot in Insurance
The Flood Insurance Gap is $63B globally, and Liberty Blume’s Lands in Lloyd’s Market with it`s first M&A Bet.
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Good morning, ! This week we’re unpacking how aging demographics are redefining life insurance, why AI is now insurers’ biggest tech investment, and how a record $63B in uninsured flood losses is exposing climate-era market failures.
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DATA DIVE
Flood Risk Is a Billionaire’s Blind Spot
Flooding isn’t just costly — it’s chronically underinsured. Between 2000–2024, flood events caused $1.9 trillion in damages, with 268 billion-dollar events, second only to tropical cyclones. Yet only 25% of 2024’s $84B in flood losses were insured. Translation: a $63B gap that’s filled by taxpayers, businesses, and homeowners — not policies. Residential flood coverage is growing fast (up 424% by 2032), but still lags the scale of the threat. This isn’t just an underwriting opportunity — it’s a climate-induced market failure.
TREND OF THE WEEK
Birthrates Down, Premiums Up
The elderly dependency ratio is doubling—and insurers are in its splash zone. With OECD countries racing toward a scary 1:1 retiree-to-worker ratio by 2100, the life insurance sector faces a structural overhaul. Longer life expectancy isn't just a healthcare story—it’s an actuarial time bomb. Traditional mortality models? Outdated. Pension math? Crumbling. What’s in demand: annuities, hybrid life-health products, and longevity-risk hedging tools. The kicker? Markets like Japan and China are aging fast but lack insurance maturity—meaning growth potential is enormous. Life insurance is being rebranded—from death benefit to retirement backbone. (More)
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MARKET MOVERS
INSURTECH CORNER
Insurers Go All-In on AI
Insurers are no longer dabbling — they’re deploying.
More than $3.3B has been funneled into Artificial Intelligence, making it the industry’s biggest tech bet. Right behind: Cybersecurity ($2.8B) and Analytics ($2.3B), as carriers double down on automation, threat detection, and data-driven underwriting. The Cloud Security surge to $2.1B reflects the shift toward remote operations — and regulators are watching. Even outside core infra, insurers are positioning for the next wave: Biotech ($1B) and Carbon Capture ($832M) show alignment with climate and health modeling. Add in Blockchain and Big Data, and the message is clear: this isn’t about modernization — it’s about survival. Underwriting is now a software business. (More)
DEAL OF THE WEEK
Deal of the Week: Liberty Blume’s First M&A Bet Lands in Lloyd’s Market
Liberty Blume, the tech-enabled business solutions firm with $100M+ in annual revenue, made its M&A debut by acquiring specialist brokerage PHL Insurance Brokers Ltd, a Lloyd’s of London player known for its niche focus in financial lines, P&C, and tailored wholesale/retail placements.
This isn’t a casual bolt-on. It’s the first signal flare in a broader M&A roadmap. Liberty Blume, which already spans 900 employees across the UK, Ireland, and the Netherlands, is positioning insurance—via its Financial Solutions arm—as a growth lever alongside its Business and Procurement Solutions divisions. PHL’s integration immediately boosts Blume’s underwriting depth and geographic reach.
For the market, it’s another case of convergence: cross-sector players muscling into insurance distribution, blending operational efficiency with specialist insurance. For incumbents, the message is clear—tech-first aggregators aren’t just building SaaS anymore; they’re buying distribution.
Why it matters: As Liberty Blume scales via insurance M&A, expect more pressure on traditional brokers to modernize or consolidate—and for the Lloyd’s ecosystem to keep serving as a fertile entry point for tech-forward newcomers. (More)
TOGETHER WITH PACASO
Former Zillow exec targets $1.3T market
The wealthiest companies tend to target the biggest markets. For example, NVIDIA skyrocketed nearly 200% higher in the last year with the $214B AI market’s tailwind.
That’s why investors are so excited about Pacaso.
Created by a former Zillow exec, Pacaso brings co-ownership to a $1.3 trillion real estate market. And by handing keys to 2,000+ happy homeowners, they’ve made $110M+ in gross profit to date. They even reserved the Nasdaq ticker PCSO.
No wonder the same VCs behind Uber, Venmo, and eBay also invested in Pacaso. And for just $2.90/share, you can join them as an early-stage Pacaso investor today.
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MACROECONOMICS
Transatlantic Tariffs, American Optics
What happens when two trading giants “agree” to disagree? A 15% flat tariff now hits nearly all EU goods bound for the US, up from an average of 5% — a compromise from Trump's threatened 30%, but hardly a win-win. The $236B U.S. trade deficit with the EU provided political cover; Germany's €34B auto exports and Ireland’s pharma are now collateral damage. Steel and aluminum remain at 50% tariffs, and pharma + semiconductors sit in legal purgatory. US optics? Dominant. EU outlook? Resigned. No lawsuits filed, but Berlin’s already on the line with Brussels. (More)
TWEET OF THE WEEK
OIR is seeing steady signs of auto insurance rates dropping in Florida!
Florida’s top five auto insurance groups—amounting to 78% of the market—are reporting average rate changes of -6.5% and some as high as -11.5%.
OIR will continue to use every tool at its disposal to bring
— Florida Office of Insurance Regulation (@FLOIR_comm)
12:12 PM • Jul 29, 2025
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