How Should One Value an Insurtech?

Research evidence excerpt

How Should One Value an Insurtech?

I N D U S T R Y N O T E

J u n e 2 2 , 2 0 2 6

InsurTech

CONCLUSION Paul Newsome, CFA, CPCU

Insurtechs span a wide range of business models, such as carriers, MGAs, brokers, and Managing Director, Piper Sandler & Co.

hybrid platforms, making a one-size-fits-all valuation approach unreliable. We identify two 312 281-3445, paul.newsome@psc.com

common errors: applying the wrong framework for the underlying business model, and Cam Bianchi

assuming a blanket Insurtech premium. Instead, we believe there are several appropriate Research Analyst, Piper Sandler & Co.

612 456-9841, cam.bianchi@psc.comways to value an Insurtech stock, depending on the company’s business model, profitability

stage, and risk profile.

Related Companies: Share Price:

AIZ 259.86

• Our Note Summary: SLDE 16.58

framework should follow the business model, not the Insurtech NP 29.24 ◦Valuation

label. Carriers, brokers, MGAs, and pre-profit platforms each have distinct earnings LMND 58.84

drivers, capital structures, and risk profiles that require different approaches. GSHD 36.88

Grouping companies solely by their level of technology enablement produces ARX 12.99

misleading comparisons. INDUSTRY RISKS

Insurtech insurance carriers, we believe P/E is the appropriate primary ◦For Insurtech: The Insurtech industry is subject to metric. P/E captures both underwriting operations and investment income – the

risks including growth, profitability, underwriting,

two core drivers of carrier economics. AI adaption and cybersecurity

broker- and MGA-like platforms, EBITDA-based metrics best reflect the ◦For

earnings model, in our view. Earnings are generated through commissions, fees,

and acquisition-driven scale rather than underwriting risk retention – similar to