By Michael Loney and Keira Wingate
Oct 6 - (The Insurer) - Neptune Insurance was well received last week after it became the sixth insurance industry company to go public in the U.S. this year, and others will soon follow the flood MGA’s lead.
St. Petersburg, Florida-based Neptune priced its initial public offering for the sale of 18.4 million shares at $20 each.
That raised $368.4 million before the underwriters’ option to purchase additional stock, and $423.7 million after it.
Neptune’s stock ended its first day of trading on the New York Stock Exchange up 24%, increasing a further 12.9% the following day. On Friday, its third day of trading, the share price closed at $30.40, up 6.9% for the day and 52% higher than the offering price.
The five other insurance industry companies to go public this year – Aspen, American Integrity, Ategrity, Slide and Accelerant – all closed up from their offering prices on their market debuts, although to varying degrees, but have had contrasting fortunes since then.
As of the end of Friday, Bermudian (re)insurer Aspen (which Sompo has since agreed to acquire in a $3.5 billion deal) was up 22.4% and Florida carrier American Integrity was up 42.1% from the offering prices of their IPOs, which were both on May 8.
E&S specialist Ategrity was up 4.1% from its June 11 offering price, but Florida carrier Slide was down 7.4% from its starting price on June 18.
Accelerant has fared worse, closing Friday trading down 29.0% from its $21 July 24 offering price.
Its stock dropped around 25% in one week in August, seemingly on investor concerns over the risk exchange’s reliance on a single hybrid fronting carrier and the complexity of its business model.
Discussing the mixed performance, Andy Mertz, head of equity capital markets at Citizens, said the companies’ post-IPO performance “is still good, however, not as robust as the classes of 2023 and 2024.”
This year marks the busiest run of IPOs in years for the sector, following a 2023 class featuring Skyward Specialty, Fidelis Insurance and Hamilton, and 2024 debuts from Bowhead Specialty and TWFG.
Speaking two days before Neptune’s debut, Mertz said the insurance vertical "continues to attract attention from the buyside", noting that all five of the IPOs at that point "priced well (midpoint or better) and traded well out of the gate", with day-one moves averaging about 20% from offer.
Mertz said that as of September 26, three of the five were trading above issue, with the group up an average of 15%.
EXZEO AND ETHOS UP NEXT
Other insurance industry companies are preparing to float.
HCI’s technology subsidiary Exzeo and life insurtech Ethos Technology both registered for IPOs with the SEC in late September.
Mertz said Citizens is tracking "more than 10" insurance-related companies that may tap the public market.
A report released by boutique M&A advisory and reinsurance broking firm Stonybrook Capital last month also highlighted other potential IPO candidates, including Acrisure, Ascot, Canopius, Convex, Core Specialty, Howden and Kin.
The arrival of Neptune and Ethos indicates that this year's IPOs are no longer limited to traditional property and casualty insurers.
In August, Robert Hartwig, a professor of finance and insurance at the University of South Carolina, framed the insurance wave as part of a broader revival in IPOs across industries, rather than a purely sector-specific surge, while cautioning that P&C indexes have underperformed the S&P 500 – a potential headwind if underwriting tailwinds fade.